Two Austin companies filed to go public this month amid a flurry of funding rounds and big moves by local venture capital firms.
Each month, we round up startup fundings that we've covered, in addition to mergers, acquisitions and venture capital firm activity, to give readers a broader look at our fast-moving startup ecosystem. We also compile a list of top tech hires from the past month, which you can check out here.
Meanwhile, you can stay on top of this type of local startup news each day by subscribing to the Beat newsletter.
Now, let's check the local deal flow, acquisitions and VC firm activity from June 2021.
Funding rounds
Austin medtech company Babson Diagnostics said June 29 it has raised $31M in series B funding to help commercialize its diagnostic blood testing tech. The new round was led by New York-based investor Emerald Development Managers, with participation from Siemens and other existing investors such as Prism Ventures and Lago Consulting Group. The company, incubated at Siemens Healthineers AG before spinning out as its own company in 2017, provides blood testing with about one-tenth of the amount of blood usually required when drawn intravenously, and it has already been tested in a retail setting.
Outdoorsy Inc. has introduced its own insurance-technology business and will be scaling it using $120M of fresh capital. The Austin-based, on-demand recreational vehicle rental startup said June 28 it had closed the equity and debt financing round. New York City-based Moore Strategic Ventures led a $90M private placement equity round, which also included investors ADAR1 Partners, Monashee Capital, SiriusPoint Ltd. (NYSE: SPNT) and Convivialite Ventures. Existing investors Altos Ventures, iAngels and Greenspring Associates also participated. California-headquartered Pacific Western Bank provided the $30 million debt facility.
Austin-based digital news service Zenger News announced June 22 it has closed a $10M seed round. Investors included Jean-Guillaume de Tocqueville, a Paris-based lineal descendant of Alexis de Tocqueville, and Andre M. Johnson, former spokesman for the Al Sharpton presidential campaign, and former Washington Post reporter. The company, which offers B2B news content in English and Spanish, plans to use the money to expand its automatic advertising software and onboard new news outlets globally.
ConverseNow, an AI voice platform for restaurants, filed paperwork June 21 indicating it has raised $14.9M in equity funding. The startup, founded in 2018 by Vinay Shukla and Rahul Aggarwal, developed an AI assistant called Jarvis that automates and personalizes restaurant orders and upsells at drive thrus and self-service kiosks. Shukla and Aggarwal previously launched Endeavor Software, which was acquired in 2016.
Austin medical device and pharmaceutical sales and revenue platform MedScout announced it closed an $800K pre-seed round led by local VC firm LiveOak Venture Partners. Also in on the round were Storable co-founders Chuck Gordon and Mario Feghali, as well as angel investor Luke Fernandez. The company, founded earlier this year and led by co-founders Skylar Talley and Casey Shattuck, developed a platform to help source and track deals for sales teams focused on the medical market. The new funding will help MedCoust add new features to the platform and expand its mobile app.
Brinqa Inc., an Austin cybersecurity company founded in 2009 by President Hilda Perez, announced June 8 the close of its first-ever funding. New York City private equity firm Insight Partners has invested $110M to acquire a minority stake in the cyber-risk management business. Brinqa builds software that can help customers reduce response time to emerging threats and compliance costs.
Austin startup Pensa Systems is gearing up to expand its data and shelf monitoring platform for retail stores after announcing June 8 that it has raised an $11M series A funding round. The investment was led by locally based ATX Venture Partners, as well as a new corporate backer – Circle K Ventures, the venture arm of gas and convenience store chain Circle K. The funding, which brings the company’s total to $28M, follows a newly initiated pilot project at several Circle K locations in Central Texas.
Overhaul Group Inc., an Austin-based supply-chain visibility software company, has closed a $35M series B funding that co-founder and CEO Barry Conlon said will fuel “at least” the hiring of another 50 people. Overhaul’s software provides supply-chain managers and shippers real-time information about cargo in transit. Co-founded in 2016 by Conlon, the company currently employs about 135 globally, roughly 80 of whom are based in Austin. Overhaul now seeks to fill about 20 open positions in the Texas capital, the CEO said.
The Mentor Method, which uses a proprietary algorithm to match corporate mentors and mentees, hit that milestone this week by raising a $1.4M seed round led by several high-profile investors, including Tim Draper's Draper Associates, Elsewhere Partners founder Chris Pacitti and Backstage Capital, founded by Arlan Hamilton. Others in on the deal included Alumni Ventures Group, MATH Venture Partners and Sorenson Impact Fund.
The state's medical cannabis laws expanded slightly this year to include all cancer and PTSD patients, and it increased the allowed amount of THC in the medicine to increase from 0.5% to 1%. And, just a week or so after that bill passed, local medical cannabis startup Texas Original Compassionate Cultivation announced it landed a $21M series B funding round led by AFI Capital Partners, a growth equity fund dedicated to cannabis investments. As part of the deal, AFI Managing Director Nico Richardson has joined TOCC's board.
A newly formed venture fund created by Bay Area business and payments platform Coupa Software has made an investment in Austin-based supply chain startup SourceDay. Coupa Ventures and SourceDay did not disclose the amount of the investment, noting only that it comes from Coupa's newly announced $50M venture fund, which targets business spend management. The fund also invested in Indiana-based Zylo.
Austin sales software startup DealHub.io said it has close a $20M series B funding round led by Israel Growth Partners. New York-based Cornerstone Venture Partners also invested in the round. The company, led by co-founder and CEO Eyal Elbahary, was founded in 2014. Its centerpiece software product, called RevAmp, helps sales teams maintain personalized dialogue with buyers and integrates with major sales platforms, such as Salesforce. The company currently has about 17 open positions listed on its website, mostly based in its Israel office.
Austin mobile security startup Hypori said it has closed a $20M series A to branch out into new markets, including fintech and health care. Bay Area firm GreatPoint Ventures led the new round. Hypori, founded in 2012 and led by CEO Jared N. Shepard, previously raised $13.9M, according to Crunchbase. That includes a $6.7M series A-1 round in 2015. Hypori develops security solutions for smartphones and other devices that employees bring from home but also use on the job. As part of the new funding round, GreatPoint Ventures Managing Director Ray Lane is joining Hypori's board.
Mergers, acquisitions and IPOs
Austin legal-technology startup Disco said it's planning to go public in a move that would punctuate a period of fast growth that was slowed only temporarily by the pandemic. The company's S-1 filing, made June 25 under the legal name CS Disco Inc., showed it plans to list under the ticker abbreviation "LAW." The filing showed it plans to raise $100M from the initial public offering, which is likely a placeholder figure that will be adjusted as the company nears its first day of trading. The company hasn't set prices for shares yet — or a date for its public debut.
F45 Training, a booming fitness franchise backed by Hollywood star and entrepreneur Mark Wahlberg is gearing up for an initial public offering, according to a June 21 federal filing, and its doing so as an Austin-based company. F45 lists Austin as its current corporate headquarters in the filing, a relatively new designation for the company that was started in California. The initial paperwork filed by F45 Training Holdings Inc. says the company plans to raise $100M, which is likely a placeholder number that will be updated later in the offering process. It hasn't yet set pricing for its shares. It plans to be listed under "FXLV" on the New York Stock Exchange. The company couldn't be reached immediately for comment.
Austin executive content and networking company Board.org, formerly known as Gas Pedal, has been acquired by Washington, D.C.-based policy and market intelligence company FiscalNote for an undisclosed amount. Board.org was founded in 2007 by Andy Sernovitz. It brings together executives and senior decision-makers for conversations and insights from peers, without intrusion from vendors trying to pitch solutions. The company, which has 44 employees who will be retained in the acquisition, operates several such channels, including SocialMedia.org, SocialMedia.org Health, Talent Marketing Board, CSR Board, Data Board and DEI Board. FiscalNote says it plans to expand on those, and Board.org anticipates new hires to fuel growth. Sernovitz will continue managing the platforms.
Mobile Tech RX, an Austin-based startup that built a technology platform for paintless dent repair and automotive reconditioning businesses, is being acquired by Repairify Inc., a portfolio company of private equity firm Kinderhook Industries LLC. The company, co-founded by Daimen Simmons and CEO Eric Garves, was bootstrapped until 2019, when it secured a $4.2M investment from Austin's Silverton Partners.
Austin-based healthtech company Iodine Software announced that it has acquired ChartWise Medical Systems, a clinical documentation improvement software company. Financial terms were not disclosed. It's the second acquisition of the year for Iodine, which uses artificial intelligence to improve revenue at health care institutions. The acquisition of ChartWise expands Iodine's services to more than 800 hospitals and health systems, according to the announcement.
Elligo Health Research, an Austin company using electronic health records to help provide access to clinical research, has scooped up Pittsburgh-based Root Health, which makes a virtual assistant for clinical research. Terms of the deal weren't disclosed. Elligo, led by CEO John Potthoff, also announced it hired Miranda Mann Porter as its COO. She was previously with Syneos Health. Elligo has raised about $36M since its founding in 2016, according to Crunchbase. Root Health, meanwhile, has raised about $50K, Crunchbase shows.
A Cloud Guru, an Austin-based cloud skills development platform, is being acquired by Utah-based Pluralsight, Inc., for an undisclosed amount. Founded by brothers Sam and Ryan Kroonenburg in 2015, A Cloud Guru went on to raise more than $42M in funding, including a $33M round in 2019. And, in July last year, we reported that the company had hit $80M in annual recurring revenue and had an office in Austin with about 150 people and about 370 employees overall across all its offices. That milestone followed the startup's acquisition in December 2019 of Fort Worth-based IT training platform Linux Academy. Terms of that deal weren't revealed, but the deal came in connection with a $257M equity funding, which followed its prior rounds. Pluralsight, meanwhile, has a workforce development platform, and it was acquired for $3.5B by Austin-based Vista Equity Partners at the end of 2020.
Aunt Bertha, a B-Corp that helps connect people to social services, announced June 2 it has raised an additional $27M in funding led by private equity firm Warburg Pincus. Several of the company's prior investors also added to the round. Those include Pershing Square Foundation, Techstars Ventures, Noro-Moseley Partners, Digitalis Ventures and The Social Entrepreneurs’ Fund. It has now raised about $49.2M total.
Venture capital firm activity
Austin-based venture capital firm Ensemble VC on June 24 made a federal filing showing it plans to raise up to $75M for new venture fund called Ensemble VC II, LP. The firm is led by founder and Managing Partner Collin West, who previously worked with several funds, including being a founding partner at Kauffman Fellows VC Fund. He also has a Guinness World Record for leading a rowing team across the Arctic Ocean for 41 days. Founder and Managing Partner Conrad Shang, meanwhile, was previously head of VC portfolio at UTIMCO and also worked at Bain Capital Ventures and Norwest Venture Partners. And founder and Head of Data Science Gopinath Sundaramurthy was head of data science at Kauffman Fellows VC Fund and also worked with IBM Watson.
San Francisco-based growth equity firm Mainsail Partners is opening an Austin office in September. The firm, which has raised more than $1.3B in capital since its founding in 2003, is focused on investing in bootstrapped software companies with recurring annual revenue of $5M or more. It has made roughly 50 investments in bootstrapped companies so far. Mainsail Operating Partner and CFO Bill Salisbury and co-founder and Managing Partner Gavin Turner have already relocated to Austin. The firm says about a dozen more team members will relocate to the Austin office at 500 W 5th Street.
8VC, a prominent venture capital firm that moved its headquarters from the Bay Area to Austin last year, is planning to raise a massive new fund that could lead to dozens of investments in startups, including local companies. The firm, led by Palantir co-founder and recent Austin transplant Joe Lonsdale, submitted a filing with the Security and Exchange Commission on June 14 that shows it intends to raise an $880M venture capital fund. The new fund is called 8VC Opportunities Fund II, L.P. It's not immediately clear how long the firm might take to raise the new fund or what type of investments will be made. The firm couldn't be immediately reached, and venture firms often decline to discuss fundraising efforts until the money is fully raised. 8VC, which announced its move from the Bay Area to Austin last November, has filed paperwork for several funds in recent months. The Opportunities Fund is separate from its flagship fund, for which it calls 8VC Fund. That fund is now in its third iteration, and the company last year filed paperwork showing it would raise $640M for that investment vehicle. The firm this week also filed to raise $640M for 8VC Fund IV, L.P.
