After a record year of VC investments last year, 2019 has been off to a hot start on a national and local level. The theme continues to be larger rounds — but fewer overall deals.
New data in the PitchBook-NVCA Venture Monitor says that with $32.6 billion invested in 1Q, 2019 is on pace to rival 2018’s record investment total. In Austin, at-home health test startup EverlyWell led the way with a $50 million round and A Cloud Guru landed a $33 million investment.
Plus, PostUp and Job.AI were two of April's top acquisitions. And we've outlined a few lineup changes and new funds -- including a potential $150 million fund for Next Coast Ventures -- in our venture capital activity section at the bottom.
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Now, let’s get to the details.
Fundings
Austin-based egg company Vital Farms reported raising $15 million in new funding. As the ABJ reported, Matthew O’Hayer founded the company, which sells pasture-raised eggs to grocery stores, in 2010 and it has since become one of the largest providers of this type of egg in the country.
Wee Golf, an Austin-based startup that has a mobile app full of games to help parents and kids interact while golfing, has reported raising about $300,000 in new equity funding. The startup, led by Jason Black, a golfer and serial founder (Boundless Networks, HotLink), in 2017 reported raising about $275,000 in equity funding from two unnamed investors. Wee Golf, founded in 2015, also previously raised $325,000 in equity funding.
EverlyWell, an Austin health tech startup that makes a variety of at-home test kits, announced it has closed a $50 million funding round. The round was led by Goodwater Capital, and with Highland Capital Partners joined in the round, as well. Others included Next Coast Ventures, NextGen Venture Partners and SoGal Ventures.
If you haven’t heard the term “aparthotel” yet, you’d be forgiven. But Austin startup Locale is on a journey to make that more of a household name. The company, which blends boutique hotel vibes with the utility and privacy of apartment living, announced it has raised a $2.5 million seed round led by Amplo and Susa Ventures. Locale was founded in 2016 by CEO Nitesh Gandhi.
Slingshot Aerospace closed a $5 million seed round led by ATX Venture Partners. It also included funding from a new investor — Rise of the Rest Seed Fund, which was created by AOL co-founder Steve Case’s venture firm Revolution. The company, founded in 2016, has raised a total of $9.1 million so far, which has included investments from Okapi Capital, Stage Venture Partners, Sway Ventures and Techstars Ventures.
Imandra, an Austin startup using AI to ensure algorithms are safe and fair, reported raising $4.8 million in equity funding. The company, which is led by Denis Ignatovich and Grant Passmore, and has offices in Austin, London and Edinburgh, showed the funding round came from 25 investors. It’s not clear who all invested, but the company lists LiveOak Venture Partners General Partner Krishna Srinivasan as a member of its board.
Always invest in what you believe in. That would seem to apply to Astrotech Corporation, which said it sold equity of about $2 million to add working capital. Its CEO and Chairman Thomas B. Pickens III purchased about $1 million worth of shares of its Series D stock. Another Astrotech shareholder purchased about $1 million as well from the Series C stock.
Atmosphere, an ambient television content business that spun out of Chive Media Group, has raised a $10 million Series A round led by S3 Ventures. Capstar Capital also joined the round. Atmosphere grew out of Chive when the company launched its video business. Now, TechCrunch reports, Chive TV is among the channels Atmosphere offers.
A Cloud Guru, founded by brothers Sam and Ryan Kroonenburg in 2015, announced it raised $33 million in growth equity funding to add to its team and develop new products and content. The investment was led by Summit Partners. AirTree Ventures and prior investor Elephant Venture Capital also backed the round. The company, which is based in the U.K. and has its North American headquarters in Austin, had previously reported raising about $9 million in a round led by Boston’s Elephant Venture Capital.
KERV Interactive, an Austin company making interactive video technologies, announced it has raised $11 million in funding from private equity group Vestech Partners. The company, which uses machine learning to recognize items in videos, has had its tech used in branding campaigns by eBay, HP, LG and Lamborghini.
Mergers & Acquisitions
Job.ai, an Austin speech analytics and natural language startup that draws insights from conference calls, announced it has been acquired by Evolve IP, a cloud computing company based in Wayne, Pa. Jog.ai was founded in 2016 by Ed Ireson and Sam Gaddis, and it has received funding from Deep Space Ventures and Capital Factory, according to Crunchbase.
Rocksauce Studios, an Austin app and design firm, has been acquired by local digital strategy company EX Squared Solutions, which is under the Builder Homesite Inc. umbrella, the ABJ reported. No financial details provided. The studio plans to add staff in UX, design, product and project management.
SolarWinds, an Austin-based publicly traded IT services company, has gone through IPOs, buyouts and has acquired more than a dozen companies. In April, it made one of its largest deals yet. It announced it is acquiring a Raleigh, N.C.-area IT service desk solution company called Samanage for $350 million. The deal was expected to close in the second quarter.
Credit card giant Mastercard Inc. scooped up Austin financial-technology company Vyze Inc. for an undisclosed sum. The deal gives Mastercard access to tech that can facilitate big-ticket purchases, the ABJ reported. Vyze’s software connects lenders and retailers to offer consumers several options to finance their purchase at the point of sale. Vyze previously raised $13.1 million in an August 2017 Series C funding round led by Austin Ventures. At the time, the startup had raised $48 million since its 2008 launch.
Upland Software, a publicly traded enterprise workplace management software company, announced today that it is acquiring Austin email software company PostUp for $35 million. The deal is poised to add $11 million in annual revenue to Upland’s balance sheets, which will now brings it to $205 million in annual revenue run rate. PostUp’s email software help marketers provide personalized, engaging emails that help build lasting relationships. It works with NBC, HBO, Sony and several other big companies.
Austin’s ESO, which makes software for emergency responders, announced it is acquiring Dallas-based employee schedule management and payroll software startup eCore Software. Adding its software allows ESO, which was founded in 2004, to broaden its set of offerings for fire departments and emergency medical services. eCore Software, meanwhile, will keep its office in Dallas. The company, founded in 1998, doesn’t appear to have reported raising any venture capital.
Affinegy, an Austin-based startup making cloud-based connected device management for broadband providers, has been acquired by St. Louis-based National Information Solutions Cooperative — or NISC. No financial details provided. Affinegy was founded in 2003 by Art Lancaster and Melissa Simpler, and it raised $1.2 million, according to Crunchbase.
CBANC, a locally based professional network for banking professionals, is acquiring Austin-based mortgage settlement services software company Lendwell. No financial details provided. As part of the deal, Lendwell founders Gabe Flores and Mike DeBonis are joining CBANC as GM and SVP of engineering, respectively.
VC & PE Firm Activity
Arlington, Va.-based HUNGRY, an online marketplace connecting independent chefs with the catering market, announced an $8 million Series A funding that included former Whole Foods co-CEO Walter Robb. The round was led by Sands Capital Ventures and Motley Fool Ventures. Other big names on the list include musician Usher, Honest Tea founder Seth Goldman and “Top Chef” producer Tom Colicchio. HUNGRY Currently operates in Washington, D.C., and Philadelphia.
Austin-based Made In, which sells pots, pans and other home cookwares direct to consumers, closed a $5 million seed funding round. The investment was led by Brian Spaly, founder of Bonobos and Trunk Club, and Ezra Galston of Starting Line Ventures. Made In was founded by Jake Kalick and Chip Malt with an aim to provide professional-level cookware to home chefs at a lower cost than competitors. It has raised a total of $8.3 million so far.
One of Austin’s most active venture capital firms announced it has closed on its second fund, giving it fuel for new investments with startups in Austin and other Texas metros. LiveOak Venture Partners said its newly closed $105 million fund has already been used in six investments, including Eventador, Osano and Rollick in Austin and AmplifAI in Dallas. LiveOak Venture Partners was founded in 2013 by Venu Shamapant, along with Krishna Srinivasan and Ben Scott. The three met while they were working together at Austin Ventures in 2000.
Austin VC firm Silverton Partners is leading a $2 million round of funding for Dallas-based conversational AI startup Novo Labs. Novo is focused mostly on bringing voice-enabled services to large restaurant chains. As part of the new funding, Silverton Partners’ Roger Chen will join Novo’s board, the Dallas Business Journal reports.
Clayton Christopher, an Austin entrepreneur and venture capitalist, is limiting his role in the future of Cavu Venture Partners. The ABJ reports Christopher is not part of the food and beverage investment firm’s third round and that he is no longer listed as a managing partner. Instead, he’ll focus on his role as advisor to several food and beverage startups funded from the firm’s first two funds — and spend more time with family. He also recently co-founded CPG nonprofit Naturally Austin with Dan Graham, founder of Notley Ventures.
Next Coast Ventures, an Austin venture capital firm, recently filed SEC paperwork showing it intends to raise a $150 million fund. It’s going by the title Next Coast Ventures II, L.P. The firm declined to comment on its fundraising, so I don’t have a lot of detail. But, as of the filing, it hadn’t yet declared raising any of the funds yet. Next Coast’s first fund, which launched in 2017, registered at about $88 million. The firm, formed by Tom Ball and Mike Smerklo in 2015, has been highly active in investing in local startups, including continued backing of EverlyWell, which reported a $50 million haul earlier in April (see the entire portfolio).
