Upland Software continued its acquisition tear. Liveoak Technologies and Novi Software both pulled in $7 million rounds. And at least two out-of-town venture capital firms announced they have their eyes on Austin startups.
It was a busy month of May for funding, acquisitions and venture capital activity. And we've got you covered with a roundup of all the deals in the area from the past month.
Please note: We report on funding rounds, acquisitions and other transactions in our daily newsletter, The Beat. You can sign up to get that here.
Now, let’s get to the details.
Fundings
Indio Technologies, a Bay Area InsureTech company working to streamline the business insurance application process, announced that it closed a $20 million Series B. Silicon Valley VC firm Menlo Ventures led the round, with participation from 8VC. In addition to the funding, Indio also revealed that it has brought on Mark Costigan, previously an early stage employee at Google, as VP of finance, and Scott Bordenave, formerly with Yammer and Microsoft, as its head of talent acquisition. While Indio is headquartered in the Bay Area, it has an Austin office and has recently signed a new lease to upgrade to a bigger space at 1300 Guadalupe and will allow for the company to add over 50 new employees in Austin in the next 12-24 months.
Chicago-based private equity firm Madison Dearborn Partners has made an investment in Austin-based Lightspeed Systems, a provider of EdTech solutions. Terms of the deal were not disclosed. According to a release, the company will use the capital to drive forward its growth strategy as adoption of its market-leading technology continues to increase.
Three-year-old health care records startup Elligo Health Research raised $20 million in a Series C round led by Piper Jaffray Cos., the ABJ reported. That brings its total to more than $41 million. The startup helps accelerate new drug development by helping find patients for clinical trials.
Austin startup Tankee, which makes a kid-friendly platform for online video gaming, reported raising about $475,000 in new equity and other securities. The startup, led by Gerald Youngblood, took home first place in the Entertainment and Content category of SXSW Pitch earlier this year.
Safeguard Global, an Austin-based tech outsourcing company, has landed a growth equity investment from Silicon Valley-based private equity firm Accel-KKR. No details on the size of the investment, but Safeguard says it will use the money to advance its payroll and employment services and expand its footprint globally.
Liveoak Technologies, an Austin startup that integrates a variety of software used to complete financial transactions in the digital space, reported raising about $7 million in new equity funding. The SEC filing comes a couple months after the company announced it appointed Tim Ramza as its new CEO. He was previously CIO at John Hancock/Manulife and president of Manulife Ventures. He took over for co-founder and CEO Andy Ambrose, who is now president and head of business development and partnership initiatives.
Richard’s Rainwater, a company that is filtering and bottling rainwater in Dripping Springs, reported raising almost $1 million in new equity funding. Earlier this year, it reported raising $1 million in equity funding from one investor. The company was founded by Richard Heinichen, and it appears to be the first company to legally bottle and sell rainwater in this format.
Novi Labs, a 5-year-old software startup that uses artificial intelligence to help plan oil and gas wells and maximize returns, announced raised $7 million in Series A funding and named a new CEO, Scott Sherwood, who was perviously CEO of Packet Design. The funding comes from Cottonwood Venture Partners, a Houston-based firm that has invested in several other oil and gas tech startups, including Austin-based MineralSoft, and Bill Wood Ventures, which is led by the former Austin Ventures and Silverton Partners general partner.
Coder Technologies, an Austin-based cloud-based development platform, reported raising $10.2 million in new equity funding. It wasn’t immediately clear who participated in the round. The company was co-founded by John Andrew Entwistle, Kyle Carberry and Ammar Bandukwala. The startup raised a $4.5 million seed round last fall led by Uncork Capital and Redpoint Ventures. About a week after that filing, Coder added $1.2 million to the round.
Upswing, an Austin edtech startup, has developed an app that is specially designed for non-traditional and diverse students. And, after being awarded with a grant by the Bill and Melinda Gates Foundation last year, the company now has additional runway to expand its offerings and help 50,000 college students graduate by 2020. To support that effort, Upswing announced Monday it has raised a $2 million round of funding from Impact America Fund, Rethink Education, Lumina Foundation and Strada. It has previously raised $3 million, dating back to a seed round in 2014.
Interplay Learning closed a $5.5 million series A funding round, the educational technology company announced. Austin-based S3 Ventures led the round and S3 Ventures Partner Charlie Plauche will join Interplay Learning’s board. Also participating were Shasta Ventures, Sierra Ventures, Holt Ventures, Wild Basin Investments and Shelter Capital Partners. CEO Doug Donovan co-founded the company in 2010. It creates digital training courses that can be accessed by desktop computer, laptop or VR headset, and is currently selling to companies working in heating, ventilation and air conditioning, or HVAC.
Austin’s Aerin Medical, which helps patients with nasal airway disorders, closed a $50 million term loan agreement with CRG, a healthcare investment firm. The money, which comes in two installments, will be used to retire existing debt and accelerate sales and marketing.
RunLab, which analyzes video of runners and walkers to improve strides, won the $10,000 Entrepreneurial Opportunity Contest put on by BBVA Compass and the Austin Business Journal. The startup is led by founder and CEO Kimberly Davis.
Kettle & Fire, a bone broth-based foods company in Austin, reported raising $2.3 million in new equity funding. The raise follows a Kickstarter campaign that blew past its $20,000 goal by more than $100,000. The company was launched by brothers Justin and Nick Mares in 2013. Their bone broths are already in Whole Foods and HEB, to name a few.
101 Commerce, an Austin startup that is acquiring and investing in Amazon FBA businesses, reported raising $2.5 million in new equity funding and other securities. That follows a $12.7 million Series A last June, which was led by Next Coast Ventures, with participation from 3L Capital, HomeAway founder Brian Sharples and RetailMeNotfounder Cotter Cunningham. 101 Commerce was founded by Richard Jalichandra, who was previously CEO of BodyBuilding.com, iSocket, MapMyFitness and Technorati.
Local biopharma startup TFF Pharmaceuticals, Inc., which is working on an inhalation drug products for chronic respiratory diseases, closed an $8.17 million Series A round. It plans to use the investment to bolster research and development of its dry powder inhaleable drugs. The company already has 30 patents and applications, and it is licensed exclusively from the University of Texas at Austin.
Austin startup Backtracks, which has a platform that tracks behavioral and performance metrics to help podcast creators and the advertisers who may want to partner with them find new ways to target listeners, closed a $2.1 million seed round led by Moonshots Capital, which has offices in Austin and Los Angeles. And Moonshots wasn’t the only Austin venture capital firm in on the round. Joining it were Capital Factory, Sputnik ATX, Next Coast Ventures and Bull Creek Capital — as well as Montreal-based BNSG Capital.
Mergers, Acquisitions and IPOs
Kahoot, an Austin edtech startup, announced it is acquiring Norway-based DragonBox, a math learning app, for about $18 million in cash and shares, TechCrunch reported. Kahoot was founded by CEO Asmund Furuseth, and he told the publication that the company’s value is now near $400 million. DragonBox had raised about $500,000 since 2012.
Locally based supply chain and logistics company E2open is acquiring New Jersey-based trade management software company Amber Road. It’s an all-cash deal valued at $425 million, which is facilitated by an E2open subsidiary buying outstanding shares at $13.05 each. The deal is expected to close in by the end of Q3. The move gives the combined company end-to-end, cloud-based supply chain management.
Upland Software‘s public offering initially raised around $138.6 million, the ABJ reported [subscriber content]. It follows a big acquisition last week, which put the company’s market cap above $1 billion for the first time (at least for a moment). The ABJ reports that Upland, founded in 2013 and led by Jack McDonald, has one of the best stock track records among Austin companies.
Resideo, a home energy, security and technology company that moved its HQ to Austin last year, has acquired Whisker Labs’ energy efficiency tech and the team that built it. The tech, which creates a model of a home to predicting heating and cooling needs, will help broaden Resideo’s offering of smart thermostats and sensors. No financial details were provided. This is the second acquisition for Resideo since it spun out of Honeywell last year.
Upland Software‘s public offering earlier in May raised around $138.6 million. And it’s continuing its rapid-pace acquisition activity to capitalize on that. The booming software company announced it has acquired Kapost, a Boulder-based marketing software company that does business as Daily Inches, Inc., for $45 million cash, the ABJ reported.
BOXX Technologies, an Austin startup that makes high-performance computers, is joining with three data storage divisions under California-based Pacific Alliance Capital. Financial details weren’t provided, but the combined entities said they will report to Dallas-based private equity firm Craftsman Capital Partners.
Venture Capital Firm Activity
New York VC firm 2048 Ventures announced it just closed its first fund at $27 million, and it says Austin is among the locations it has its eyes on. The firm, founded by former NYC Techstars managing director Alex Iskold and former Redbooks CEO Paul Sethi, is focused on first-time founders — or those who have a first-timer mindset — mostly in B2B enterprise, SaaS, security, hardware and fintech. “We are ready to be the first check in your company, whether you are located here in NYC, or Toronto or Atlanta, Seattle or Nashville, Austin or Boston, or anywhere in between,” they wrote.
Houston-based venture capital firm Carnite Ventures plans to bring more Austin startups into its portfolio through its new investment with California-based Seraph Group. Carnite’s investments have been largely in Houston and Florida. But it says Seraph’s focus on Austin means Carnite plans to be active in the 512.
The University of Texas System Board of Regents has committed $20 million to a partnership with Army Futures Command, which is helping the Army identify and adopt new innovations. It has already put in $30 million previously.
Chicago Ventures, a Windy City-based VC firm, is seeking up to $75 million for its third fund, according to an SEC filing. While Chicago Ventures is headquartered in Chicago and focused mostly on startups operating in the city, they have a number of Austin investments in their portfolio, including infinite io and data.world. It’s always a good thing when a venture firm that’s accustomed to investing in ATX reloads.
An Austin venture capital firm with a long history of investing in Texas health care and life sciences startups has secured a new $250 million fund that will help fuel 20-plus investments. Santé Ventures, which was founded in 2006 and has made 33 investment since, makes its first investments, typically as a lead or co-leader, in startups anywhere between a Series Seed and a Series B round.
