Austin startups and venture capital firms wasted little time in lighting the wick on 2019.
Local tech companies announced funding rounds at a dizzying pace in January. The funding rounds came in all sizes, but, most notably, January will likely be remembered as a time when we saw an incredible hot streak of $20 million-plus announcements and one of the biggest exits in recent memory with TrendKite being acquired by Cision for $225 million.
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Fundings
AlertMedia, an Austin company that provides emergency communication software, plans to enter its next stage of growth with new hires, additional products and international expansion. The startup’s growth is being fueled by a new $25 million growth equity investment from JMI Equity, a software investment company based in Baltimore. AlertMedia was founded in 2013, and it’s led by CEO Brian Cruver. The new investment brings AlertMedia’s total funding to $42 million. Its prior investors include Austin-based Next Coast Ventures, Silverton Partners, ATX Seed Ventures and Capital Factory.
ERC dEX, a platform for trading digital assets on Ethereum, reported adding about $100,000 in securities and SAFE funding (simple agreement for future equity). The addition brings the company to $700,000 raised of a planned round of up to $2 million. ERC dEX was founded in 2017 and is led by CEO David Aktary, a former IBM software engineer.
Infinitum Electric, which makes high-efficiency electric motors, reported raising $1.8 million in a Series A round led by Cottonwood Technology Fund. The startup, founded in 2016, has been focused on the HVAC industry. This new money will be used to launch HVAC motors, as well as fuel R&D for new applications with electrical vehicles and in the oil and gas market. The company, which has now raised a total of $2.7 million, is led by CEO Ben Schuler.
Envirocon Technologies Investments, which makes the Lemi Shine brand of dish soaps and household cleaning products, reported raising $10 million in equity funding. The company is led by CEO Curtis Eggemeyer. Here’s a nice profile on Eggemeyer in the ABJ [subscriber content].
Pensa Systems, which is using AI and drones to manage retail inventories, announced it raised $5 million in new funding. The round was led by Menlo Park-based Signia Venture Partners, with participation from new investor Commerce Ventures and existing backers ZX Ventures (the venture arm of AB InBev (AKA Anheuser-Busch)), ATX Seed Ventures, Capital Factory and Revtech Ventures. The new money will help Pensa do more testing with large retailers. Pensa is led by CEO Richard Schwartz, and, as part of the new funding, Signia Venture Partners partner Ed Cluss will join Pensa’s board.
HopGrade, which makes an app to connect folks in apartment buildings, reported raising $5.8 million in equity funding. The company, founded in 2015, had previously reported raising about $600,000 in debt funding. The startup’s app, hOp, lets a property or apartment complex set up a residents-only marketplace for selling, borrowing and lending things, and it allows merchants to offer locals-only deals to nearby residents.
ArtCraft Entertainment, a video game developer that made Crowfall, reported raising $2.4 million in new equity funding. The company, founded by J. Todd Coleman and Gordon Walton, has raised money in a variety of ways. Its website shows a total of $24.5 million in total funding, with $16.2 million of that in the form of equity funding and $3.1 million in licensing. In September last year, the company announced it had attracted 50,000 backers for its latest Crowfall chapter, Throne War Game.
Austin accounting automation software maker ScaleFactor raised a $30 million Series B funding round and made a few executive hires. The new funding, led by Bessemer Venture Partners, an early stage firm based in Menlo Park, Calif. Prior investors Canaan Partners, Broadhaven Ventures, Firebrand Ventures and several angel investors also returned to back the company again in this round. ScaleFactor, founded in 2014 by Kurt Rathmann, provides back office bookkeeping software that uses advanced analysis to automatically comb spreadsheets, receipts, tax logs and other data sources to generate reports and insights.
Consumer cash-back app Dosh raised a new $40 million round, giving us another indication of Dosh’s big vision and providing another major validation point as the startup enters its next phase. The new funding comes in the form of $20 million in equity funding and $20 million in venture debt. The round was led by Goodwater Capital and Western Technology Investment. Prior investors PayPal, BAM Capital and Anthem Venture Partners also put in on the round. That brings its total funding to nearly $100 million, putting it in the upper echelon of Austin startups in terms of funding. TechCrunch, citing sources close to the company, reported Dosh’s funding came at a $300 million valuation.
Legal tech startup DISCO has only been in Austin for a few months. But, already, it has the distinction of being one of the top legal tech companies in Austin — and the nation. In January, the company announced it raised $83 million in new funding in what it says is one of the largest financing rounds ever for a startup in its sector. The investment round was led by Toronto-based Georgian Partners. Prior investors Bessmer Venture Partners, LiveOak Venture Partners, The Stephens Group and venture debt firm Comerica also pitched in. That brings DISCO to $135 million in total funding, which it says makes it the highest funded enterprise legal tech company.
Essentium, a 3D printing and manufacturing platform, closed a $22.2 million Series A round led by BASF Venture Capital. Also in on the round were Materialise, Genesis Park, and previous seed round investors, according to a news release. The company says its Series A is one of the highest in the history of additive manufacturing. The startup is currently based in College Station, but it has plans to move its corporate HQ to Pflugerville.
Austin-based oil and gas tech startup Seismos has raised $10.5 million in new equity funding. The round was led by Quantum Energy Partners, and Javelin Venture Partners, Osage University Partners, ATP fund, Hicks Oilfield and other existing investors also threw in, according to a news release. We noted the SEC filing in this part of the Beat last month, before we had details on investors. The company, founded in 2013, is led by founder and CEO Panos Adamopoulos, who has previously founded two other startups in China and been an advisor at the Austin Technology Incubator.
SigmaSense, an Austin startup that makes sensor technologies and was previously known as 3AxisData, reported raising about $3.5 million in equity and debt funding. Their products bring new finger and pen touch capabilities to tablets and smartphones. The company is led by CEO Rick Seger.
Elligo Health Research, an Austin company helping physicians find patients for clinical trials, reported raising about $21 million across two SEC filings. One was a $5.2 million filing, the other was for $16.2 million. The company is led by CEO John Potthoff and President Chad Moore. Earlier this month, Elligo Health Research acquired Protenium Clinical Research for an undisclosed amount.
Hive9, an Austin B2B marketing software startup, raised $2.3 million in new funding. The round was led by Trousdale Ventures, which is in Austin and Los Angeles. Prior investors LiveOak Venture Partners and Silverton Partners also participated in the funding. Hive9, which was founded in X, also announced Ginger.io CEO Russell Glass will join its board, and Bruce Brien, who was recently CTO at SiriusDecisions, will be its chief strategy officer.
RigUp, an Austin startup that has created a marketplace for on-demand services and labor in the oil and gas sector, has reportedly raised $60 million in new funding led by Founders Fund, a San Francisco venture capital firm founded by Peter Thiel, Ken Howery and Luke Nosek. Bedrock Capital and Quantum Energy Partners were also in on the round. Axios, which first shared the news, reported that the $60 million round was raised at a $300 million post-money valuation.
Billd, which had been in stealth mode for months, announced today it has raised a $60 million Series A round, which includes debt and equity funding. It wasn’t clear how much falls into each category. The new round was led by LL Funds, a Philadelphia-based investment firm focused on consumer finance solutions.
CherryCircle Software, an Austin startup making process development software for pharmaceutical companies, has raised $2.3 million in Seed funding. The round was led by ATX Seed Ventures, PLH Business Ventures, Hudson Park Capital and angel investors. The company is led by co-founder and CEO Yash Sabharwal and co-founder and CTO Ryan Shillington.
Novo Dia Group may not be a household name — even in the Austin tech community. But it plays a big role for vendors at farmers markets. Despite having its service used by thousands of markets, Novo Dia has reportedly struggled to keep its software business going. The Washington Post reported that San Francisco-based payments company Square provided new funding to Novo Dia to make sure recipients of the Supplemental Nutrition Assistance Program can use their benefits at farmers markets without interruption. The $2 million investment will also help Novo Dia expand its product lineup.
CesiumAstro Inc., an Austin-based space communications company, reported raising $8.5 million in new equity funding. The startup is led by founder and CEO Shey Sabripour, a former Firefly Space Systems CTO and former Lockheed Martin Space Systems engineer and director of spacecraft design. Among customers CesiumAstro lists on its homepage are NASA, the United States Navy, the Missile Defence Agency and the Space and Naval Warfare Systems Command, which is part of the Navy.
Mergers and Acquisitions
Medici Technologies didn’t wait long to plant its first milestone of 2019. The telehealth startup acquired Chiron Health, an Austin health teleconferencing startup, according to the Austin Business Journal [subscriber content]. No financial details provided. Chiron Health was founded by Andrew O’Hara in 2013 and had raised about $7 million, with backers including Axa Strategic Ventures, Capital Factory and FLOODGATE.
Luminex Corporation, which makes a variety of biological tests, announced it closed its previously announced deal to buy MilliporeSigma‘s flow cytometry portfolio for $75 million.
Austin managed cloud services company Hostway is merging with Denver managed cloud firm HOSTING, the companies announced today. The combo gives them 14 data centers in five countries. Emil Sayegh will serve as CEO and president. And investors Littlejohn & Co. and Pamlico will continue to back the organization. Though combined, the companies will keep their separate brands for a while — a new brand will emerge in about a year after the companies integrate.
CMIT Solutions, an Austin IT services company, has been acquired by Dallas-based private equity firm Craftsman Capital. CMIT CEO Jeff Connally and all the company’s employees will remain in Austin in its current office. Terms of the deal weren’t disclosed. The company was founded in 1996 by Georgia Jones.
Drillinginfo, a fast-growing oil and gas software and data company, has acquired Austin-based MineralSoft, which makes software to manage royalties and other mineral interests. MineralSoft has 35 employees and has been backed by Cottonwood Venture Partners, Blue Bear Capital, and Y Combinator. The two companies have been partnered for more than a year. No details on the financials of the acquisition. This is part of a string of acquisitions in recent months, which has included Oildex and Cortex.
Cision, a large PR and earned media company based in Chicago, announced it acquired TrendKite for $225 million. Once the deal is formally closed, TrendKite CEO Erik Huddleston will become Cision’s president. TrendKite’s investors have included Harmony Partners, Silverton Partners, Adams Street Partners, Battery Ventures, Mercury Fund and Noro-Moseley Partners.
VC Firm Activity
Rise of the Rest, the Washington, D.C.,-based venture capital fund created by AOL co-founder Steve Case, made four investments with Austin startups during its first year, VentureBeat reported. That puts Austin on the same pace as Dallas and Minneapolis-St. Paul. The fund made fie investments in Los Angeles, Raleigh-Durham and Chicago. D.C.-area startups had the largest share — 15 percent — of investments.
BrainCheck, a Houston neurocognitive testing platform with offices in Austin, raised a $1.5 million round led by Austin-based True Wealth Ventures, with participation from Tensility Venture Partners, XFactor Ventures, S3 Ventures and angel investors. It has now raised $6M total. The startup launched last July, and it’s led by co-founder and CEO Yael Katz.
Vista Equity Partners, an Austin-based private equity firm, landed a new deal with Cambridge, Mass.-based Quick Base, a coding software startup. The WSJ reports Vista is buying a majority stake, and it valued the deal at more than $1 billion. Vista has been on a tear of acquisitions recently, and the firm has already raised $13 billion of an anticipated $16 billion fund, sources told the WSJ.
Austin’s Tritium Partners will be well-positioned to scoop up a variety of tech companies, local and beyond, now that they’ve secured $465 million in their second fund. The new raise, significantly larger than the $375 million the firm initially targeted, came largely from institutional investors, including retirement systems, pensions plan, foundations and insurance companies, and it took eight months to gather. Tritium looks to acquire majority stakes in startups focused on online marketplaces, financial services and logistics. From its first fund, which closed at $309 million in 2015, Tritium made 10 investments. That includes leading a $50 million round for Austin- and Akron-based RVshare and a recapitalization and growth investment deal with Austin’s RateGenius.
ATX Seed Ventures is off to a hot start in 2019. In January, they led a $2.3 million Seed round for CherryCircle Software. Then in February, Crunchbase had a story on GoCo, a Houston-based HR benefits platform, which raised a $7 million Series A led by ATX Seed Ventures.
