Austin's startup ecosystem continues to evolve. And one of the hallmarks of that change is the increasing number of local startups achieving billion-dollar valuations — AKA unicorn status.
In April, insurtech startup The Zebra joined a growing local group of privately held companies valued at more than $1 billion when it secured a $125 million series D funding round. Meanwhile, Arrive Logistics raised a $300 million round. The company declined to disclose its valuation, but that level of funding likely brought its valuation north of a billion, as well.
Those were among more than 30 funding rounds reported by the Austin Business Journal and Austin Inno last month.
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 April 2021.
Funding rounds
HopGrade Inc. reported April 9 it raised about $5 million of an $8 million total offering, according to an SEC filing. Co-founded by CEO Chris Peifer in 2014 in Greenwich, Conn., the software startup provides a platform that connects neighbors and helps them help and get to know each other. The company reported in August raising $4.5 million.
Ballogy, an Austin startup with an analytics app to remotely help basketball players improve their game, announced April 1 it secured a $6 million series A funding round. Investors included pro golfer William Martindale, Foot Locker board member Gil Marmol, former NCAA COO James Isch, former Milwaukee Brewers CEO Ulice Payne Jr., the Orlando Magic's Gary Harris, former pro baseball player Rocky Turner, Siebert Bradford Shank & Co. co-founder Napoleon Brandford III, along with Jones & Spross PLLC and FiveRivers Technologies. That brought the company's total funding to $9.5 million. In March, the company was named as the official performance analytics app of the National Association of Intercollegiate Athletics.
Semtive Inc. reported April 2 it had raised $5.6 million from three investors, according to a regulatory filing. The clean energy business has developed a "vertical axis wind turbine designed to work at very low wind-speeds making it ideal for commercial and residential use in urban and suburban areas," according to the LinkedIn page of CEO Ignacio Juarez, who co-founded the company in 2009.
Let's Disco Inc., which does business as Disco Skincare, announced April 9 it had closed a $5 million seed round that included investors such as Austin-based venture capital firm Midnight Venture Partners, Tecovas founder Paul Hedrick and Richards Rainwater founder Taylor O'Neil. Benjamin Smith founded the men's skincare startup in 2019. Disco Skincare debuted on Amazon in March and is available at Nordstrom, among other places. It later reported on April 20 it had raised about $1.7 million from seven investors, according to an SEC filing.
A startup being spun out of the University of Texas has scored an undisclosed investment from Shell Ventures. Celadyne Technologies, led by CEO Gary Ong, produces materials that improve hydrogen fuel cells and make them usable for long-haul trucks, drones and industrial scale processes. UT reports that the investment stems from the startup's participation in the Rocky Mountain Institute's startup accelerator Third Derivative and its membership in the first cohort of Shell's H2Refuel Accelerator.
HopZero Inc. reported April 7 it had raised roughly $3 million of a roughly $4.2 million total offering, according to an SEC filing. Mark Norman is CEO of the cybersecurity startup founded by Bill Alderson in 2017, according to Crunchbase.
Waste Repurposing International Inc., which does business as Smarter Sorting, reported April 8 raising $4.1 million from 18 investors, according to an SEC filing. Smarter Sorting helps businesses recycle chemicals by culling data on the chemicals that go into retail products such as cleaning solutions. The company was founded in 2015 by CEO Chris Ripley and Charlie Vallely. Smarter Sorting reported raising $325,000 in January.
ThreatWarrior Inc. filed two Form D documents April 7 with the SEC that reported the same information: The company raised $2.25 million from 21 investors. Bruce Coughlin is CEO of the cybersecurity startup, which was founded in 2018, according to Crunchbase.
Mantra Labs Inc. announced April 1 it had closed a $1.5 million seed round. Investors included Tiff's Treats co-founder and CEO Leon Chen. The sixth company of serial entrepreneur Paul Janowitz, Mantra Labs was created by the CEO during the summer of 2019. Janowitz brought its consumer packaged goods into the market in July. Its signature products are powdered drinks for optimal energy, hydration and sleep, formulated using the science of chrono-nutrition.
Atmosphere — an Austin company that sells streaming video feeds to bars, restaurants, office waiting rooms and other businesses — raised $25 million in a round led by Chicago-based Valor Equity Partners. CEO Leo Resig said the money will go to hiring and expanding Atmosphere's distribution. Leo Resig and brother John Resig founded Rarefied Atmosphere Inc., which spun out from their other company, Chive Media Group Inc., in 2019.
Cipherloc Corp., which is focused on encryption technology, reported April 19 it had raised about $10 million in equity and securities options from 108 investors, according to a filing with the U.S. Securities and Exchange Commission.
InsuranceZebra Inc., which does business as The Zebra, announced April 12 it had raised about $125 million. The series D funding round gave the insurance-comparison startup a valuation of more than $1 billion. New and former investors participated in The Zebra's latest round, including Florida-based Weatherford Capital, a family-owned investment firm, and Accel, a California-headquartered venture capital firm. Other investors include Austin-based venture capital firm Silverton Partners, Ballast Point Ventures, Daher Capital, Floodgate Fund and KDT.
Canteen Spirits announced April 16 that it had raised $31 million in debt and equity funding in a round led by ATX Global Co-invest, which is part of ATX Venture Partners. Canteen launched in 2019. Its canned cocktails have reached shelves in all 50 states, as well as via alcohol delivery app Drizly, and it reports selling 517,000 cases in 2020. The startup also previously secured a long list of noteworthy angel investors, including Brooklyn Decker and Andy Roddick, as well as country singer Maren Morris and Ryan Hurd.
Austin health-tech startup DocStation raised a $3.1 million seed round led by 8VC, a firm led by Joe Lonsdale that last year moved from the Bay Area to the Texas capital. The startup, founded by Samm Anderegg and Josh Matz, partners with health plans to better utilize pharmacies by administering clinical programs that help close gaps in health care. The startup launched its first program in 2018. Also in on DocStation's funding round were UnityPoint Health Ventures, Cartmell Ventures, Free Solo Ventures, Wanxiang Healthcare, Omega Pharmacy Group and Techstars.
Intrigue Corp. announced April 13 it had closed a $2 million seed round led by Austin venture capital firm LiveOak Venture Partners. CEO Jonathan Cran in November founded the cybersecurity startup, according to his LinkedIn page. Using an open source core, Intrigue has developed a platform that provides asset and risk visibility. “You can’t secure what you can’t see, and with increased dynamism of IT environments from agile, cloud, and now work-from-home, there’s a lot more that security teams are likely unaware of," said Creighton Hicks, LiveOak Venture partner, in a statement. "Intrigue gives enterprises awareness of their entire public-facing footprint so they can monitor it and secure it.”
NFN8 Media LLC reported April 12 in an amended SEC filing that it had raised $600,000 of a planned $5 million total offering. The business uses specialized computer systems to mine cryptocurrency, then sells and leases back those mining systems "to grow without dilution or debt, while creating monthly cash flow for those who want to get involved in the blockchain space," according to an Oct. 20 announcement. Josh Moore is CEO. The company incorporated as a legal entity in 2010, according to records from the Texas comptroller's office.
Virtuix Holdings Inc. reported April 16 that it had raised about $278,000 from seven investors of a planned total offering of roughly $2.2 million, according to a regulatory filing. CEO Jan Goetgeluk founded the company, which makes an omnidirectional treadmill used in virtual reality gaming called the Omni, in 2013. The company reported raising $2 million in September.
RazorMetrics Inc. reported April 21 it had raised $6.1 million in equity and security options from 32 investors, according to a regulatory filing. Tom Dorsett, who founded the company in 2018, is CEO, according to the filing. The startup uses machine learning to help self-funded employers and health plans to spend less on prescription medications.
Leo AR, an Austin company that helps consumers make videos with augmented reality, closed a $3 million seed round. The round was led by Great Oaks Ventures, IVP's Dennis Phelps, Betaworks, Deutsch Telekom, Quake Capital and angel investors. The startup, led by Dana Loberg and Sahin Boydas, recently moved to Austin from Silicon Valley. It operates legally as MojiLaLa Inc. The new funding came just a week after it announced a partnership with Portugal communications and entertainment group NOS. The company says it is one of the first female-founded consumer facing AR apps.
Forward Food Inc. reported April 21 in two SEC filings it had raised about $2.2 million. Co-founded by Kettle & Fire Inc. co-founder Justin Mares, the company appears to be in stealth mode. Kettle & Fire makes grass-fed shelf-stable beef bone broth. Mares is listed on the filings as Forward Food president. One filing reported raising about $1.4 million in simple agreements for future equity from 24 investors. The other filing reported raising $800,000 in simple agreements for future equity from six investors. Ryan Hanson and Marshall Milliken also are listed as executives.
Virdee, a virtual concierge company based in Austin that operates legally as Symles LLC, added roughly $2 million in seed funding, expanding a previously announced round with investment from Austin's Silverton Partners and LiveOak Venture Partners, as well as Miami-based DJR Advisors. The company announced Sept. 29 it had closed a $2 million seed round. The Austin-based software-as-a-service startup helps hotels and commercial real estate properties accelerate contactless guest interaction. The company’s software helps automate the front-of-house workflow, allowing property owners to quickly adjust to pandemic regulations, while also reducing cost and boosting profitability for operators. Branigan Mulcahy and Chief Technologist Nadav Cornberg co-founded the company in 2020.
Arrive Logistics Inc., a freight brokerage using technology to connect shippers with companies that need to move stuff, reported raising more than $300 million in a round led by New York City-based private equity firm ATL Partners. An exact funding amount was not provided but ATL is now the largest minority owner of Arrive. Also investing were Baupost Group, British Columbia Investment Management Corporation and Temasek. Founded in 2014 by CEO Matt Pyatt and President Eric Dunigan, Arrive Logistics ended last year with more than 1,000 employees and revenue of $810 million.
RapidDeploy Inc., which makes software for 9-1-1 dispatchers, raised $29 million in a series B round led by Morpheus Ventures, a Los Angeles-based venture capital firm. Other investors in the round included GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners, Clearvision Ventures and Tau Ventures. The company, which moved its headquarters to Austin from South Africa in 2019, has now raised a total of $43 million. It currently has 107 U.S. employees and 95 in South Africa.
SigmaSense LLC reported April 30 raising nearly $8.3 million in debt, according to a filing with the U.S. Securities and Exchange Commission. The company develops sophisticated touch-screen devices that, for example, can tell if a glass of water sitting on the surface of the device needs a refill. SigmaSense announced last September a $22 million series A round led by Foxconn Technology Group, the Taiwan-based original equipment manufacturer known for making iPhones and other consumer electronics. SigmaSense was founded in 2015 and is led by CEO Rick Seger.
Cedar Park-based Virtual Combine LLC reported April 27 in an SEC filing raising nearly $2.8 million in incremental cash, adding to a round first disclosed in 2019. Thirteen investors participated in the equity securities sale, according to the filing. The company has developed an app that allows youth sports players to track their athletic accomplishments, according to its website. It is led by founder and CEO Doug Lambert.
ClosedLoop.ai won the $1.6 million Artificial Intelligence Health Outcomes Challenge, held by the Centers for Medicare & Medicaid Services. ClosedLoop has developed predictive software that can identify risk factors among patients. The Austin company was one of more than 300 of companies competing for the prize, beating out the likes of IBM Corp., Merck and Accenture, according to an April 30 announcement. ClosedLoop is led by CEO Andrew Eye. Last fall it raised an $11 million series A round.
Strap Technologies Inc., an Austin company making hardware and software for the blind and visually impaired, raised $1.3 million in a round led by Platform Capital, and Platform Chairman Dr. Akintoye Akindele will join the startup's board. Led by founder and CEO Diego Roel, Strap has also raised money from International Accelerator and angel investors. Strap's chest-worn device helps people by scanning surroundings and communicating back to users. The company, which also has offices in Guadalajara, Mexico, has already landed more than 6,000 pre-orders for its device, which will ship out in Q4. The devices currently have a promotional price of $500.
Austin's Cobra Legal Solutions, which provides ediscovery services and contract management, has landed a new investment from Austin-based Blue Sage Capital. It didn't disclose the amount. Cobra, which is based in Austin and led by CEO Candice Corby, says it has more than tripled in size over three years. The news release noted Cobra's global workforce is 63% female and 89% diverse.
Mergers, acquisitions and IPOs
FTC Solar Inc. began trading April 28 on the Nasdaq. The IPO was poised to generate net proceeds of more than $253 million, as long as underwriters purchase their overallotment of shares, for FTC, which makes devices that move solar panels to track the sun through the sky, boosting output. FTC (Nasdaq: FTCI) said it was selling 19.8 million shares of common stock for $13 apiece. Its shares have since been trading between $12.53 and $15.46.
Local fintech company Q2 Holdings Inc. announced it acquired ClickSwitch Holdings Inc., a Minneapolis-based company that facilitates the digital switching of bank accounts to the financial institution of one's choosing. Financial terms were not disclosed. Founded in 2014 by CEO Cale Johnston, ClickSwitch boasts more than 450 customers. Q2 employed 1,751 at the end of last year, according to its February annual report, and generated $402.8 million in revenue 2020, up from $315.5 million in 2019.
Rock Solid Technology, a civic engagement software company with roots in Austin and Puerto Rico, announced it acquired PrimeGov, a virtual public meeting participation and agenda platform. The companies also reported that Tom Spengler, PrimeGov’s executive chairman, will become the CEO of the combined organization. Rock Solid was founded in 1994. It landed a private equity funding round from Austin's Strattam Capital in 2018 and its CRM is used by governments in San Antonio, Columbus and Knoxville, among others. Terms of the deal weren't announced.
Luminex Corp. — an Austin-based company making biological testing equipment that can screen for many diseases, including Covid-19 — is being bought by Italian diagnostics company DiaSorin SpA for about $1.8 billion. DiaSorin agreed to pay $37 a share in cash, a roughly 12% premium compared with Luminex’s closing price of $32.95 on April 9. That also represents a premium of 23% compared with the closing price on Feb. 24, before rumors of a possible deal began to circulate. Luminex, founded in 1995, makes a wide range of testing equipment.
SXSW is selling a 50% stake to Penske Media Corp., publisher of magazines such as Variety and Rolling Stone, the Wall Street Journal reported. That would be the largest stake in the company behind the world-famous music, film and technology festival, according to the Journal, although the SXSW founders would continue to run the event. SXSW CEO and co-founder Roland Swenson confirmed the deal in a statement to WSJ, calling it "a true lifeline for us."
Telemedicine company TeleMed2U is acquiring a fellow local startup, Medzino. Terms of the deal weren't disclosed. TeleMed2U CEO AJ Patel will be CEO of the combined companies, and Medzino CEO Sarmad Malik will become CMO. Medzino will keep operating with its brand name. Before the deal, Medzino had raised a total of $650K since its founding in 2019, according to Crunchbase. It also operates in Germany and the U.K. TeleMed2U, meanwhile, has raised a series A round, although it was clear what the amount was. Last year, the company, which has offices in California and Austin, acquired Specialty Clinic of Austin.
VC firm activity
SpaceFund, a Houston- and Austin-based venture capital firm, said it has the first $9 million of a planned $20 million funding committed. The firm, founded by Rick Tumlinson, launched in 2019. It has invested in 13 space-oriented startups thus far, including SpaceX and Voyager Space Holdings.
Austin private equity firm Peak Rock Capital LLC said it has closed its third fund with $2 billion in commitments. The firm, which has invested in Shipley Do-Nuts, Halo Foods and a variety of other businesses, closed its previous fund at $1.3 billion back in 2017. It says it targets middle-market companies, especially for corporate carve-outs.
iFly.vc, a Bay Area seed stage fund established in 2016, says it will become an Austin-based fund. In a blog post, Han Shen, founding partner at the firm, said the firm has already connected with several local founders and investors. He also noted Austin is relatively central in terms of flights. The firm last year reported raising $23 million for its second fund. Its site notes it makes average investments of $2 million, but ranges from $1 million to $5 million. Its portfolio includes e-commerce marketplace Border Lab, grocery delivery startup Weee! and seven other companies. It lists Oculus, Motive Drilling Technologies and Lucid among its past investments.
