If January felt like a hectic month in startup land, that's because it was. The Austin startup scene logged about 20 funding deals and eight significant acquisitions to kick the year off.
Literati's $40M round was among the biggest moves of the month, although Everlywell secured $75M in additional money after its huge $175M round last year. Meanwhile, a few companies that have recently moved their HQs or established North American HQs in Austin also reported big influxes of new money.
Plus, we also included several moves in the VC ecosystem this month, including Palo Alto-based firm Sapphire Ventures opening an Austin office.
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Now, let's check the local deal flow, acquisitions and VC firm activity from the first month of 2021.
Funding rounds
AI Clearing raised $2M to use AI to analyze images and data taken from above by satellites, drones and other monitors. The new funding was led by Estonia-based Tera Ventures, with participation from Poland-based Inovo Venture Partners and Innovation Nest. The startup is led by co-founders Michael Mazur and Adam Wisniewski.
JobSiteCheck, a local startup that started as a Covid-19 safety protocol for construction sites, has pivoted slightly to provide worker health, productivity and project efficiency offerings, the ABJ reported. The company, which added new leaders earlier this year, also raised $600K of a planned $750K round, with investments from prominent local angels, including Dan Graham, Brett Hurt, Andrew Busey, Saurabh Khetrapal, Kevin Dasch and Jim Young. In June, the company added CEO Josh Rickel and President Tala Matchett to replace Orion Jensen and Nick Swerdfeger, who launched the company last spring.
Electra Beverages, a sports beverage startup with roots in Austin and Dallas, went on ABC's "Shark Tank" show and landed a deal with Barbara Corcoran. It's a $100K investment, along with a $250K line of credit in exchange for a 30% stake. The startup, founded by Dallas-based Fran Harris, a former WNBA player, entered the investing show looking for a $350K investment.
M-Files Corp., a software company making data- and content-organization tools, has raised $80M. And though the company's global headquarters is in Finland, it clearly intends to spend a good chunk of that money in the Texas capital, where CEO Antti Nivala lives. M-Files has plans to add more than a dozen jobs locally and seek new office space this year, Nivala said.
Kronologic, an AI-powered scheduling platform, reported raising a little over $2.6M in new equity funding. That follows a $3.5M seed round the startup reported last spring that was led by Silverton Partners, with Next Coast Ventures and Geekdom Fund pitching in. Kronologic was founded in 2018 by Trey Allison, Aaron Bollinger and Ben Parker.
Molecula, a data virtualization startup, closed a $17.6M series A funding round, led by Ohio-based venture capital firm Drive Capital. Andy Jenks, a partner at Drive Capital, has joined the company’s board of directors as part of the deal. Additional money came from Total Technology Ventures LLC, an Atlanta-based financial technology investing firm that in December closed its fifth fund worth $127M. Chicago-headquartered venture capital firm Tensility also participated in the round, as did existing investors such as Atlanta-based venture capital firm Seraph Group; Austin-headquartered seed-investing firm Lontra Ventures; Austin-based venture capital firm Velar Capital; Austin's Tom Meredith, former CFO of Dell and a partner at private equity firm Brightstar Capital Partners; Andrew Busey, Supply Drop Online Inc. co-founder and CEO; Jason Dorsey, co-founder and president of Austin-based Center for Generational Kinetics; and Amy and John Porter, the founding partner of Skylark Private Equity Partners, a private equity firm headquartered here. Molecula now has raised a total of $23.6M to date, the company said.
Sustainment, a software platform that helps connect suppliers and customers, raised a $2.1M funding round led by Colorado-based Blackhorn Ventures. Locally based University of Texas alumni venture group Congress Avenue Ventures also got in on the round, along with angel investors. The company's software is already used by the U.S. Department of Defense and state government clients, including the Oklahoma Department of Commerce. The company plans to spend the funds on software and AI development. Sustainment is led by CEO Bret Boyd, who is also a U.S. Army veteran and co-founder and partner at Grayline Group, as well as a former VP at Stratfor and TrackingPoint.
Digital health startup Everlywell raised $75M in additional funding in a subsequent funding to its $175M round last year. The new funding was led by HealthQuest Capital. As part of the move, Dr. Garheng Kong, founder at HealthQuest, will join Everlywell's board.
Quali, an Israel-based company with its North American HQ in Austin, announced it raised a $54M funding round led by Israel-based investment firms Greenfield Partners and Jerusalem Venture Partners. That adds to the roughly $60M the company had raised since its founding by Alex Ackerman and Moshe Moskovitch in 2004. In 2008, Ackerman stepped down from his role as CEO and the company named Lior Koriat as its CEO.
Canada-headquartered e-commerce software company Bold Innovation Group Ltd., which does business as Bold Commerce, has hired an Austin-based chief operating officer and is hiring dozens in the Texas capital after closing a $27M series B funding round. The round was led by Toronto-based investment firm Omers Ventures Management Inc. Partner Laura Lenz has joined the company’s board as part of the deal. Existing investors Whitecap Venture Partners and Round 13 Capital, both based in Toronto, also participated. Bold Commerce has raised $44M in equity funding during the past two years. It was bootstrapped until raising $16.5M in 2019.
Austin edtech startup College Consortium, which has rebranded as Acadeum, reported raising $4M in new equity funding. That follows a $7M round in February last year that was backed by The Lumina Foundation, Rethink Education, Learn Capital, Next Coast Ventures and Socratic Ventures. The startup, led by co-founder and CEO Joshua Pierce, helps colleges and universities share online courses so that students have a better shot at getting the classes they need when they need them.
A sliced condiments startup landed a $200K deal on ABC's "Shark Tank" last month. Slice of Sauce landed the debt funding investment from Alex Rodriguez on the Jan. 15 episode. The funding would convert to 15% equity when the business reaches $1.8M in sales. Slice of Sauce, founded in 2017 by wife and husband team Emily Williams and Cole Williams, uses all vegan ingredients to create slightly dehydrated condiments in slice form. The startup previously was part of the Techstars Austin accelerator.
Loop, an insurtech startup, exited stealth mode with a $3.25M funding round and called Austin its HQ. The B-Corp startup, founded by John Henry and Carey Anne Nadeau, has developed what it calls a fair and transparent type of auto insurance that doesn't rely on credit scores and ZIP code data that can create bias in pricing. The funding, announced Jan. 14, was led by San Francisco-based Freestyle VC, with participation from Blue Fog Capital, Frontinalis Capital Partners, Concrete Rose, Uprising Ventures and Backstage Capital.
Austin-based medtech startup 83bar has landed a new investment from San Diego-based private equity firm HCAP Partners. The amount wasn't disclosed. 83bar provides a platform to manage patient journeys for clinical trials, and it says it has amassed a database of more than 1M patients that can be targeted for future trials. It was founded by CEO Bob Baurys in 2015.
Darwin Homes, a platform that uses AI and local property managers to help make it easier for single-family property investors and owners to makes repairs, secure and vet leases, collect rent and provide detailed reporting raised $15M in series A funding. The round was led by Canvas Ventures, with participation from Camber Creek, Kholsa Ventures, Wave Capital, Pear Ventures and Silicon Valley Bank. Angel investors also pitched in, including Tony Xu, co-founder and CEO of DoorDash; former Uber CEO Ryan Graves and TQ Ventures Partner Andrew Marks. Darwin Homes was founded by CEO Ryan Broderick and COO Zachary Kinloch.
Book club and subscription startup Literati Inc. closed a $40M series B. Aydin Senkut, founder and managing partner of Silicon Valley-based venture capital firm Felicis Ventures, led the investment. Also investing were Dick Costolo, former CEO of Twitter and a co-founder and managing partner at 01 Advisors; 01 Advisors co-founder and Managing Partner Adam Bain; Austin-based venture capital firms Silverton Partners and Springdale Ventures; and Founders Fund, General Catalyst and Shasta Ventures. To date, Literati has raised $55M in funding.
SamCart Inc., which enables businesses to sell products online directly to consumers from their respective landing pages, announced it had closed a $10M series A. The company, co-founded by CEO Brian Moran, moved its HQ from Maryland to Austin in 2019. Its new investment was led by Atlanta-based venture capital firm TTV Capital. San Francisco-headquartered Fin VC and the George Kaiser Family Foundation, an Oklahoma-based nonprofit, also participated. The latest funding brings SamCart’s total capital raised to date to $13M.
Austin-based Removery is charging into the market with $50M in new funding. The new funds will help Removery expand its network of 40 tattoo removal shops, CEO Tom Weber told the ABJ. The company expects to reach 250 locations within the next five years through an aggressive acquisition strategy, targeting expansion in the United States, Canada and Australia. The new money came from Elliott Investment Management LP, a New York-based investment firm.
QSAM Biosciences, a biotech company that just announced it has moved its headquarters from Palm Beach to Austin, announced it closed its recent series B stock offering at $2.5M. The funding, which was placed at $1K per share, was led by California-based Checkmate Capital Group. The company, which makes nuclear medicines for cancer treatment, plans to use the money to start clinical trials for its radiologic cancer therapy product, CycloSam. The company is led by CEO Douglas R. Baum.
Mergers, acquisitions and IPOs
Austin customer engagement company Khoros, which formed a couple years ago when Spredfast and Lithium combined, announced it has acquired Topbox, a customer experience analytics software company with offices in Oregon, Washington, D.C. and Kansas City. Khoros also announced it closed an equity investment from its existing investors, including Vista Equity Partners. Later in January, it acquired Netherlands-based Flow.ai, which makes a conversational AI platform to manage chatbots. Terms of the deal weren't disclosed.
Austin's FlashParking merged with Chicago-based parking startup Arrive as the parking industry looks to rebound from a tumultuous 2020. Terms of the deal were not disclosed. The merger will create an "operating system for the new way to manage mobility," the companies said in a statement. Founded in 2011, FlashParking makes parking management software for parking garages. Last year it raised $60M in a strategic investment from private equity firm L Catterton.
Yonomi, a smart device integration startup that is co-headquartered in Austin and Boulder, was acquired by Dublin-based security company Allegion, which operates about 24 security brands, including biometric devices and mechanical locks. Allegion has been an investor in the startup since 2017. Terms of the acquisition weren't disclosed. Yonomi was founded in 2013 by CTO Joss Scholten, VP of Engineering Garett Madole and CEO Kent Dickson. The company will keep its brand name, and Dickson will become vice president and general manager of the Yonomi business unit at Allegion.
Francisco Partners announced it has completed its acquisition of Austin cybersecurity company Forcepoint from Raytheon Technologies. It also announced it has appointed Manny Rivelo as its new CEO. Rivelo, who is also a board member at Austin-based Outdoorsy, was previously CCO of Arista Networks and CEO of AppViewX.
Austin-based work and portfolio management company Planview is planning to make two acquisitions, just weeks after itself being bought out in a $1.6B deal. Planview is acquiring San Mateo-based Clarizen and Seattle-based Changepoint. Terms of the deals weren't announced.
After months of speculation, Austin-based dating and professional networking app Bumble Inc. filed paperwork to start an initial public offering. It wasn't immediately clear how much the company hopes to raise from the IPO or what its valuation may be. In September, Bloomberg reported the company would seek a valuation of $6B to $8B.
Austin's Upland Software has added to its growing stack of acquisitions. It announced last month it had acquired Second Street Media, a St. Louis-based audience engagement software startup. Upland paid $25.4M cash, along with a $5M holdback payable in a year. Upland said it expects the deal to help it generate $9.4M in additional annual revenue.
Vista Equity Partners-backed Social Solutions Global Inc. announced it acquired Canada-based Athena Software. Financial terms were not disclosed. Austin-headquartered Social Solutions and Athena Software each make software for the nonprofit and social services sector. Combined, the companies will have a client base spanning the United States, Australia, Canada, New Zealand and the United Kingdom, “with further international expansion planned in the future,” the announcement stated. Founded in 2000 in Baltimore, Social Solutions in 2017 moved its headquarters to Austin. Social Solutions in August 2018 snagged a $59M investment from Ballmer Group LLC, the philanthropic organization of former Microsoft CEO Steve Ballmer and his wife, Connie Ballmer.
Other venture activity
Sapphire Ventures, a Palo Alto-based venture capital firm, is opening an office in Austin. Along with that, its partner and CEO, Nino Marakovic, and partner and head of Sapphire Partners, Beezer Clarkson, have relocated to Austin and are leading the opening of the new office. The firm also announced it has opened new offices in London and San Francisco. It is also expanding its office in New York City. Sapphire has more than $4B in assets under management, and its portfolio has included JFrog, Sumo Logic and around 20 other companies that have IPOed. In 2019, the firm secured more than $1.4B in new capital commitments, largely dedicated to expansion- and late-stage tech startups. One of its most recent Austin investments was leading a $50M round for workforce productivity startup ActivTrak.
We noted DivInc's expansion to Houston in the Beat in September. But now we have a lot more detail. The accelerator, which is focused on helping startups led by diverse founders, landed a $250K grant from JPMorgan Chase & Co. Ashley DeWalt is the Houston branch's managing director and Joy Hutton is its program director. DivInc Houston will also offer accelerator companies up to $10K in seed funding with help from a $175K grant from Verizon.
Huston-Tillotson University students will have a chance to develop a nonprofit solution to meet community needs and a shot at a $15K prize donated by Thrivent and Legacy Collective. The Social Enterprise Pitch-Off is open to students in the School of Business and Technology's Biz Ready Program, and they'll have access to mentors from Legacy Collective, as well as guest speakers provided by Notley. Three finalist teams will pitch their solutions at the end of the spring semester, and the winner will be introduced at Austin Philanthropitch, a social impact pitch competition, in September.
