September brought a lot of deals and even more mergers and acquisitions to the Austin tech startup scene.
Among the biggest developments was news that Mithril Capital Management, which was co-founded by one of the more successful and controversial venture capitalists around — Peter Thiel — and Ajay Royan, a former Clarium Capital managing director, is coming to Austin. Mithril operates an $850 million fund.
Meanwhile, real estate startup Bungalo emerged with $250 million in funding and a commitment to fund up to $1 billion in total. BuildASign is being acquired at a $280 million valuation. Spredfast merged with a San Francisco company. And Dell Technologies, Bumble, Yeti and SolarWinds are all considering IPOs.
That’s just a glimpse at all the activity from last month. Below, we’ll find all the local tech startup funding announcements, mergers, acquisitions and venture capital fund activity from September 2018.
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Fundings
Vapor IO, an Austin-based edge computing startup, has raised an undisclosed amount of funding in a round led by Berkshire Partners, CRN reported. Current investor Crown Castle was also in on the round. The new cash will help it expand its data center services, which are strategically located as close to users and mobile towers as possible. Thus far, most of its testing and operations have been in the Chicago area. The company was founded in 2015 by Cole Crawford.
ICON Technology, an Austin startup that’s 3D printing homes, reported raising $6.8 million in equity funding. The startup was founded by TreeHouse co-founder Jason Ballard and Vest Printers co-founder Alex Le Roux, and it is one of several startups developed out of Saturn Five, the local startup studio launched by Evan Loomis and Max Anderson. Loomis is on ICON’s board of directors.
Pani, an Austin startup making smart home products to help measure, monitor and recycle water, has raised a $1 million seed round led by former Facebook EVP of Global Partnerships Blake Chandlee. The product breaks down water usage to identify which fixtures are using the most water — and then get customized feedback to reduce use. Its products will start shipping to consumers early next year. Pani was founded by Allen Tsai, who previously founded Azul Mobile and Ekata Systems. Tsai was inspired to start the company after a volunteer trip to Nepal to build water wells in a remote village.
FirstClose, an Austin mortgage tech startup that helps speed up closing times on home purchases, has landed a “multi-million dollar investment” from Dallas-based Cypress Growth Capital. The company didn’t disclose the exact amount. FirstClose was founded in 2000 by CEO Tedd Smith and CRO Tim Smith.
Bungalo, an Austin online home-buying platform, emerged from stealth mode today with $250 million in funding and a commitment for $1 billion in additional backing. The huge money comes from Austin’s Amherst Holdings, and, as reported by the ABJ, it aims to be the next big thing in shifting real estate transactions to the web. COO Greg Stewart told the ABJ that the new money will help the company buy and renovate about 155 homes in Dallas and Tampa.
Good Money Group, a startup consumerizing cryptocurrency, reported raising $22 million in debt and other options. The filing indicates an Austin presence, although its listed director, Gunnar Lovelace, is the co-founder of Los Angeles-based Thrive Market. In an interview last May with Family Office Insights, he said: “We have been self-funding until this point and already have $39 million committed, after only having formally shared the deal two weeks ago.”
Workday Ventures, the investment arm of the financial management giant, Workday, has led a $12 million strategic funding round for collaborative data startup data.world. The Associated Press and OurCrowd also contributed to the round, bringing the Austin startup’s total funding to $45.3 million since its 2016 launch. But this round may have as much to do with the connections Workday provides as it does with the money, which will help data.world hire salespeople, data librarians and engineers. That’s because Workday, a company with a $31 billion market cap, will be walking data.world’s team into meetings with Fortune 500 companies that want to create a data-driven culture within their massive ecosystems, co-founder and CEO Brett Hurt said.
MTPV Power Corp, an Austin company that makes clean energy by converting heat into electricity using semiconductor chips, reported raising nearly $18 million in new equity funding. No word on who participated in the round, but the company’s prior investors include Spinnaker Capital, Lake Bridge Capital, Applied Materials and several others. The company was founded by Bob DiMatteo.
Clear Data Networks, an Austin-based cloud platform for the health care industry, reported raising $15 million in new equity funding. It wasn’t immediately clear who led this round, but it comes more than a year after the company closed a $12 million round from investors including Norwest Venture Partners, Excel Venture Management, Heritage Group, HLM Venture Partners, Flare Capital Partners and Merck Global Health Innovation Fund.
CarServ, an Austin startup that uses machine learning to optimize workflow at auto repair shops, won the top prize at Salesforce‘s Dreampitch competition earlier this week. The company, led by Mars Mundy, made its pitch to Salesforce President and CPO Bret Taylor on a 40-floor elevator ride in San Francisco. The company won $250,000.
Mergers, Acquisitions and IPOs
Spredfast, which makes software for managing social media, merged with San Francisco-based Lithium Technologies. Spredfast will keep its Austin office and Lithium’s San Francisco office will become headquarters of the combined company. Meanwhile, Lithium Technologies CEO Pete Hess will lead the combined companies. Spredfast Chairman and CEO Rod Favaron will be part of a transition team, but the companies didn’t say whether he’d have an ongoing role after that. Lithium, which has a software platform for digital customer engagement, was founded in 2001. It was acquired by Austin-based Vista Equity Partners in 2017. In total, Spredfast had raised $138.1 million, according to Crunchbase. That includes a $50 million infusion of equity funding in June last year from Riverwood Capital, a Silicon Valley private equity firm. Other Spredfast investors include Austin Ventures, Interwest Partners (Bay Area), OpenView Venture Partners (Boston) and Lead Edge Capital (New York).
Trendline Interactive, an Austin email marketing agency, has taken an undisclosed investment from Chicago’s Growth Catalyst Partners. And, with the funding, it is acquiring Inbox Pros, an Atlanta-based email marketing company. Trendline was founded by Morgan Stewartand Andrew Kordek in 2010. The company’s clients include AARP, WebMD and USA Today.
The MOD Studio and Intelechy Group are merging and becoming MODintelechy, a full-service creative marketing agency. The newly combined company will be headquartered in Austin with satellite offices in Chicago and Denver.
Personify, an Austin-based software company specializing in helping nonprofits engage with their fans and members, has been acquired by Pamlico Capital, a Charlotte private equity firm. Pamlico is buying the company from Rubicon Technology Partners, which had owned Personify. Financial details not included.
Encast, an Austin startup that helps businesses track social good achievements, is merging with Philadelphia-based Soceana, a complementary giving platform that uses digital currency. Encast, led by CEO and co-founder Leo Ramirez, Jr., is a Capital Factory accelerator company that previously raised an angel round of funding totaling $2.2 million in 2016 and is now backed by Brian Acton, co-founder of WhatsApp, who is leading the company’s current $1 million seed round.
Groove3, an Austin music tech company founded in 2003, is being acquired by Milwaukee-based music publisher Hal Leonard Corp, the Milwaukee Journal Sentinel reported. No financial details provided. Groove3 makes tutorials for complex music software, such as Logic Pro X and Ableton Live. Grove3’s staff and its founders, Asa Doyle and Antony Livoti, will remain in Austin.
CityBase, a Chicago startup that provides online payment technology and other digital services to governments, has been acquired for $160 million by GTY Technology Holdings, a special purpose acquisition company based in Austin. CityBase, founded in 2012, makes a software platform for government agencies that allows residents to search and pay for things like parking violations, property taxes and more online. The startup has raised more than $13 million to date, from backers like Method Capital and Jeff Taylor, the former CEO and chairman of Cole Taylor Bank. GTY, founded by former Accenture and EMC executives, raised more than $550 million in 2016 to identify and acquire promising tech companies.
Drillinginfo, an Austin-based data analytics company for the oil and gas industry, has acquired Denver-based Oildex, a payment management company that had been owned by Accel-KKR and is also focused on the energy industry. Terms of the deal remain private. The ABJ reports [subscriber content] this is the third Denver area acquisition for Drillinginfo.
Bumble is actively pursing an IPO, founder and CEO Whitney Wolfe Herd said on CNBC. “This is what we feel is best for our users, best for our global growth and we feel that this will help us take our mission to every corner of the planet.” She said Bumble is profitable and that it has annual run rate of $200 million, without having launched an ad-based business model. She also said Match Group, which owns Tinder, is somewhat of a monopoly in the U.S. public market, a not so subtle jab at the company that sued her and that she then countersued. Both companies are call each other’s lawsuits baseless.
SolarWinds, a network management software company, which initially went public in 2009 before being purchased by Silver Lake and Thoma Bravo, is once again looking at an IPO. The company filed paperwork last Friday indicating it will aim to raise $500 million in an IPO on the New York Stock Exchange, the ABJ reported [subscriber content]. The company, founded in 1999 and led by CEO Kevin Thompson, would be listed under the ticker “SWI.”
Dell Technologies is planning to talk with several banks that might ultimately help underwrite an IPO, according to a report in the Wall Street Journal. The WSJ reported last month that going with a traditional IPO, as opposed to Dell’s plan to acquire a controlling stake in VMware, could be seen as a way for Dell to pressure reluctant investors to back the deal it initially pitched. But, if the company follows through, it’d be one of the biggest U.S. companies to IPO, the WSJ reported. It would also seem to fly in the face of Michael Dell’s prior comments about how taking his company private was a smart move that has allowed the company to build for the future instead of trying to please the public markets.
HID Global, an Austin-based identity management software company, announced it has acquired Crossmatch, a Florida-based biometric authentication company. Crossmatch, which had been owned by private equity firm Frisco Partners, was founded in 1996 and has 270 employees across its offices. HID Global, meanwhile, employs more than 3,000 people worldwide.
BuildASign is onto its next chapter: The company is being sold in a deal that values it at $280 million. Cimpress N.V.(Nasdaq: CMPR), a Dutch investment firm specializing in mass-customization businesses, says it has agreed to acquire BuildASign from PWP Growth Equity. The deal is expected to close in October. Cimpress says it will share more details, including integration plans, during its earnings call on Oct. 31. Cimpress owns Vistaprint and several other printing businesses, and the firm says adding BuildASign into its fold will let those companies benefit from each other’s offerings in the low-cost canvas print market. Vistaprint recently opened a new manufacturing facility in south Dallas.
Rollick, an Austin startup that connects dealers with consumers for RVs and other outdoor equipment, is planning to acquire the St. Louis-area’s AVALA Marketing Group by the end of the weekend. The acquisition gives Rollick additional marketing solutions to connect quality buyers with dealers. As part of the deal, Rollick is changing its name from Rollick Outdoor to simply Rollick, Inc. and AVALA becomes AVALA In.c, a Rollick Company.
Yeti Coolers, which considered an IPO a couple years ago, is back with a federal filing indicating it will raise up to $100 million through an IPO. Still, some observers suspect the final number will be closer to $300 million. The company would list, naturally, as YETI on the New York Stock Exchange. The company was founded by brothers Roy and Ryan Seiders.
Venture Capital Funds and Other Activity
Brand Foundry Ventures, a venture capital firm focused on early stage consumer-facing startups, has filed plans to raise $100 million in new funds. The firm, with offices in Austin and New York, is led by its founder, Andrew Mitchell, who was previously an angel investor and co-founder of Aspen Industries. Its portfolio includes Austin’s Rosso & Flynn, a farm-to-table butcher, as well as growing brands like Allbirds and Barnraiser.
Mithril Capital Management, which was co-founded by one of the more successful and controversial venture capitalists around — Peter Thiel — and Ajay Royan, a former Clarium Capital managing director, is coming to Austin. It’s big news because they operate an $850 million fund. Why Austin? Well, Royan tells TechCrunch that it’s all about cost of living and culture. He told the publication that everyone has been friendly in Austin and he gets to wear his cowboy boots.
