Despite receiving low mores in access to funding on Startup Genome and the Global Entrepreneurship Network’s annual Global Startup Ecosystem Report, more capital and more M&A activity happened in the North Texas tech and startup ecosystem than in previous months.
In September, at least 27 companies raised new funds totaling nearly $264 million. Those numbers were led by a $100 million growth capital round for shaving product brand Shavelogic and a $90 million convertible preferred equity investment for tech-powered financing and used vehicle sales firm Tricolor. The rest was carried by smaller seed and Series A rounds.
M&A activity last month was also hot, with 17 deals involving local companies taking place, along with Lewisville-based blank check company upping its proposed IPO deal size from $50 million to $100 million.
And speaking of IPO’s, September saw P10, a Dallas private investment solutions provider for alternative asset managers file paperwork for it to hit the New York Stock Exchange.
To help you keep track of what’s going on around DFW, NTX Inno put together a roundup of September’s financial activity.
Pro tip: You can check out daily updates on funding, M&A and VC activity in our daily newsletter, The Beat.
Fundings:
After hitting the iOS app store in June with its digital tool to care for those on the autism spectrum, a local startup is looking to expand with a fresh round of funding. Red Oak-based ASD.ai, the developer of mobile app Rootines, announced the closing on a $1 million angel round led by Pittsburgh’s Determined Capital, a firm led by pharmacists and senior VP of special projects for PANTHERx Specialty Pharmacy Tim Davis.
With eyes on fully launching its wedding and event planning marketplace at the beginning of next year, Fêtefully landed a $1.3 million seed round to hire and help build out the platform for its public debut. The latest round was led by Los Angeles VC firm Slauson & Co. with Florida investor Gurtin Ventures and brought Fêtefully's total to about $1.6 million. The announcement comes on the heels of Fêtefully landing $100,000 in non-dilutive funding, along with $220,000 in support tools and services from Google for Startups Black Founders Fund.
First up, TrySecondOpinion, a health care tech startup based in Dallas and Illinois, announced raising a $500,000 "family and friends" round from several angel investors. The company, which connects patients with medical experts to make diagnoses in traditional and alternative medicine, plans to use the funds to build upon its MVP and hire new executives and board members. Created by Anil Sunkara and Anand Bollineni, the company is looking to launch its platform in the U.S. and India in November.
Irving-based cloud software company Veridic Solutions landed a “strategic growth” investment from San Francisco PE firm Housatonic Partners and investment firm Pracinco Management. The financial terms of the deal were not disclosed. As part of the move, Housatonic Managing Director Joe Niehaus will join Veridic's board and tapped Vikas Aditya, former chief strategy and operating officer at AccionLabs, as Veridic's new CEO. The firm said previous Veridic Owner Devender Aerrabolu would remain involved with the company.
Also, without disclosing financial terms, California investment firm HCAP Partners again invested in Addison-based predictive and prescriptive analytics company Lone Star Analysis. The company said the funding is a follow-on to an investment it received from HCAP in 2019. Lone Star said the funding would be used on "strategic growth initiatives" and R&D work on its software.
As part of its plan to invest millions into Black founders, four local startups are counting Google as a new backer. Via its Google for Startups Black Founders Fund, the Alphabet-owned tech giant awarded $100,000 in non-dilutive funding along with up to $220,000 in support tools and services to the North Texas startups. Fêtefully, Safer Management, XR Sports Group and CustomerX.i are among 50 companies that received a collective $5 million.
Dallas advertising and e-commerce insights startup Junction AI got some fresh funding as it joins the PAX Momentum accelerator program. Joining nine other startups in the eight-week B2B-focused program, the startup will receive a $50,000 cash investment, along with $20,000 in in-kind services. PAX focuses on companies that have begun to earn revenue and are looking to scale. It typically invests in companies that are currently in the process of raising a round, PAX Co-founder Matt Hanson told NTX Inno. Junction AI was founded in 2015 by CEO Vance Reavie. Based on SEC filings, the company has raised nearly $900,000.
A Dallas company breaking into the shaving industry grabbed some financial help. Shavelogic Inc. raised $100 million in growth capital from Jefferies, according to a statement. The announcement follows the launch of its “SL5” shaving offering last year. The company dates back more than a decade and has accumulated more than 150 global patents. “Breaking through in an industry like ours takes dedication and teamwork, so having a capital partner like Jefferies is an essential benefit that will help us accelerate market share growth and drive stakeholder value,” said Shavelogic co-founder Duwayne Miller in the statement.
Nanoscope Therapeutics is on a mission to restore sight to those with age-related macular degeneration. And early trials of its therapy show it can do just that. To help fuel its Phase 2b trials, the Bedford-based biotech startup announced landing a $1.5 million Small Business Research Innovation grant from the National Eye Institute as it looks to bring its optogenetic gene therapy to market.
A fintech company led by a former partner of Perot Jain landed $3.5 million in funding. Richardson's CollateralEdge, whose CEO and co-founder is Joe Beard, has attracted a seed investment. According to its website, the company aims to reduce the cost and barriers around bank financing for small- and medium-sized businesses. "The idea for CollateralEdge has been years in the making, and there is no better time than now to support banks with great new tools to make more dreams come true," Beard said in a statement, adding the investment team in the funding was impressive.
CourMed founder and CEO Derrick Miles says his startup is about taking on “smart money.” Now, bootstrapped from the beginning, the company took on what he considers its first “institutional” funding. The McKinney-based health care services delivery startup has landed a $500,000 interest-free, five-year loan from software giant Microsoft – the first investment from the company’s $50 million commitment last year to invest in Black-owned partner companies. And with the money, CourMed has the potential to scale globally.
Serial entrepreneur Ben Lamm's startups are known for their lofty goals, and it's no different with his newest. After reading a research paper by Harvard's Dr. George Church about bringing the woolly mammoth back from extinction a few years ago, he's teaming up with the researcher to do just that. Colossal uses gene-editing technology to create mammoth calves in artificial wombs with a team split between Austin, Dallas, and Boston. The animals with DNA from mammoths and Asian elephants would by 99.96% identical to the long-extinct creatures. The effort is aimed at re-wilding the Arctic as a way a combat climate change. The effort emerged from stealth in September with a $15 million funding round led by Thomas Tull, a billionaire businessman who is CEO of Tulco LLC, former CEO of Legendary Entertainment and a film producer on major Hollywood releases, such as "Inception" and "The Dark Knight."
Dallas-based Evolon Technology, a surveillance software solution for critical infrastructure monitoring, announced closing a $16 million Series A round from backers, including ReignRock Capital Partners, which led a $7 million round for the company in 2018. The company said the funding would help accelerate research and product development. Craig Jeffries and Mel Duran co-founded Evolon (formerly Jemez Technology) in 2001.
Plano-based crypto mining and data center infrastructure company TMGcore reported raising $20 million in debt funding and convertible promissory notes from five investors, per an SEC filing. According to Tech Crunch, the company already has around $70 million in funding, with principals of Pinchal & Company being one of its largest backers. TMGcore was launched in 2018 with a focus on data center hardware and solutions. Its technology, which uses two-phase liquid immersion infrastructure, is being used by Dallas colocation data center operator DartPoints. CEO and Chairman John-David Enright lead TMGcore.
A pivotal client that served as an MVP for a local startup's new focus is now helping to fuel its new growth. Dallas-based Immerss, a company providing digital tools for brands to leverage e-commerce sales, raised a $1.1 million seed funding round from Oak Stream Investors III, a fund of Oak Stream Investors, and Muse Family Enterprises – two local family office investors led by board members of Texas bootmaker Lucchese.
A Dallas company will soon be hitting the shelves of H-E-B stores after being crowned “Texas’ Best” by the grocery store chain. Local bakery Savor Pâtisserie, specializing in the French macaron, took home the grand prize in late August of the eighth iteration of H-E-B’s Quest for the Texas Best competition, winning a grand prize of $25,000 and space on the store's shelves. Savor was launched in 2014 by former Neiman Marcus Business Manager Kelli Watts. After outgrowing a pop-up location at the Shops at Park Lane, the company opened its first storefront Casa Linda Plaza in 2016. It now operates another Dallas location in Snider Plaza and storefronts in Fort Worth and McKinney. Savor is the first North Texas company to take home a prize in the competition since Arlington-based frozen fruit bar maker MaxFrut took home the $20,000 First Place prize in the competition’s inaugural run.
Dallas-based clinical-stage biopharmaceutical company Venturis Therapeutics focuses on vascular disfunction, inked a strategic alliance with Prevail InfoWorks, a Philadelphia-based clinical trial-focused predictive analytics and integration software firm. The partnership will see InfoWorks' tech used to manage and advance Venturis' coronary artery disease trials. As part of the deal, life sciences investment firm Prevail Partners, which counts InfoWorks in its portfolio, said it has agreed to invest a "seven-figure amount" in Venturis when trials begin.
Las Colinas’ Tricolor, a tech-powered financing and used vehicle sales company, raised $90 million from funds managed by financial giant BlackRock, bringing the total amount the company has raised to about $160 million. The convertible preferred equity investment converts to a minority stake. The new funding will help Tricolor expand its AI-powered lending platform into more states. Tricolor and its affiliate, Ganas Auto Group, operate in Texas, California and Nevada, and focus on underserved communities.
Digital Seat Media, a Fort Worth-based tech startup, reported raising $2.1 million in equity from five investors on a $3.4 million offering, per an SEC filing. The company uses QR code tags at sports and entertainment venues to allow fans to access digital programs, on-demand food delivery and promotional material. Digital Seat is looking to deploy its tech in around 50 venues by the end of the year. Most recently, it deployed its tech at TCU's Amon G. Carter Stadium. The company was launched in 2018 by Co-founders Cameron Fowler and Matt Sullivan, based in Austin.
About four years ago, Lyndsey Harper left her practice as an OB/GYN to launch women’s sexual wellness app Rosy, which has helped more than 100,000 women across the country. And Harper is looking to increase that number. The Dallas-based company is in the process of raising a $2 million seed round, of which Harper said Rosy closed on $1.35 million. The effort is being led by Austin early-stage venture capital firm True Wealth Ventures, which Harper said has been a goal investor since she heard general partners Sara Brand and Kerry Rupp speak at Dallas Startup Week in 2018. California investment fund Portfolia is participating in the raise.
The University of Texas at Arlington named the winners of its annual MavPitch Business Competition. Going head-to-head, 13 student-led startups made their pitches, with six companies taking home a collective $85,000. Taking home the top prize of $25,000 was Hashira Studios, a maker of anime-focused apparel. The Second Place prize of $15,000 was split between two companies: Carissa’s Custom Costumes, a convention- and festival-focused clothing business created by Carissa Knitowski, and Soirée, a meal kit delivery service. Third Place awards went to three different companies, along with a $10,000 prize for each. Those companies included Petal, a company providing incentives for purchasing reusable bags, rock climbing equipment maker Pinch Master, and parking solutions company iPark.
M&As:
Residential real estate-focused digital services company Elm Street Technology acquired Austin-based marketing automation software company OutboundEngine. The terms of the deal were not disclosed. With the addition of OutboundEngine, the Frisco-based firm will have about 350 employees. The move marks the fifth acquisition for Elm Street this year and its 10th overall. Elm Street CEO Prem Luthra previously hinted to the DBJ that it could complete up to seven acquisitions this year. OutboundEngine was founded in 2012 in Austin as an email marketing service. The following year, it expanded into social media marketing and welcomed the real estate, insurance and mortgage industries onto its platform. Since then, it's raised tens of millions of dollars in funding, according to its website.
Richardson-based communications management software company VOSS Solutions acquired LayerX Technologies, an Irving-based data analytics and monitoring software firm, in an all-local deal. The move is expected to expand VOSS' unified communications and collaboration automation management expertise. VOSS said it raised $15 million from existing investors, including Verdane and Claret Capital, to fund the acquisition.
Allen-based unified communications solutions provider Cytracom announced acquiring North Carolina’s OmniNet, an SD-WAN and cloud security company, as it looks to enter the security and connectivity markets amid the rise in remote work during the pandemic. The terms of the deal were not disclosed. Its acquisition of OmniNet will enhance Cytracom’s secure connectivity offerings for small- and medium-sized businesses. OmniNet’s technology allows businesses to extend corporate networks into the cloud via SD-WAN routing and prioritization.
In its third deal of the year, Dallas firm Surge Private Equity announced acquiring Contractor Connect, a home improvement-focused networking platform launched in 2014. Financial terms were not disclosed. Surge said it typically invests in businesses with between $2 million and $7.5 million of EBITDA. The transaction closed with debt financing provided by New York-based Modern Bank and Orlando investment firm Assurance Mezzanine Fund. Contractor Connect Founder Joseph Powless will remain on as an owner and partner. The move marks Surge’s 10th platform company.
According to a filing with the Insurance Commissioner of the State Iowa, Bestow, a Dallas-based digital life insurance platform, finalized its acquisition of Iowa-based Centurion Life Insurance Company, a subsidiary carrier of Wells Fargo, in a $2.32 million deal. As part of the deal, Centurion will operate as Bestow Life Insurance Co., the filing states. It also says that Centurion has been in run-off, not writing new lines of taking on new reinsurance obligations for a "number of years," and that the company will cede its insurance and annuity policies and contracts to Bermuda's Somerset Reinsurance Ltd. As Bestow Life Insurance, a wholly-owned subsidiary will continue to have a "significant presence" in Iowa. Previously, Bestow operated as a licensed life insurance carrier in Texas and an agent and third-party administrator of life insurance policies through North American Co. for Life and Health Insurance. With the acquisition, the startup will have licenses in 47 states, along with Washington, D.C. The move accelerates Bestow's previous plans to expand state-by-state and will allow it to develop and launch its products.
Karman Missile & Space, a space flight hardware company, formed last year by Dallas PE firm Trive Capital, along with California's Aerospace Engineering Corp. and AMRO Fabricating Corporation, acquired Systima Technologies, a Washington-based composite and metallic aerospace structures company. The financial terms of the deal were not disclosed. The move marks Karman's fifth acquisition towards its focus on space and hypersonic systems infrastructure. As part of the deal, Systima's leaders will become equity holders and senior leaders at Karman.
Pharmaceutical giant Boehringer Ingelheim scooped up by Arlington’s Abexxa Biologics, a antibody-based biopharmaceutical company. Terms of the deal were not disclosed. Boehringer said the move will allow the company add to its cancer treatment offerings, with Abexxa’s tech that targets cancer proteins inside the cell. Abexxa counts Boehringer as one of its first investors, and is a winner of the company’s Innovation Prize, which helped Abexxa expand its lab operations to Massachusetts. Abexxa was launched in 2015 and is led by CEO and Co-founder Debra Wawro Weidanz. According to Crunchbase, the company has raised a total of about $1.2 million. Abexxa will continue to operate out of Arlington.
Grapevine’s Buchanan Technologies, an IT services and solutions firm, acquired Cybernoor, a California-based Oracle platform solutions company. The terms of the deal were not disclosed. In addition to bolstering its offerings to clients, the Lightview Capital-backed Buchanan said the move would help it expands its India operations.
In the first deal from its recently closed $460 million fund, local health care- and consumer services-focused PE firm Trinity Hunt Partners acquired Massachusetts’ Exclusive Concepts, an e-commerce marketing agency, per The Dallas Morning News. Terms of the deal were not disclosed, although the firm typically invests between $15 million and $50 million. Trinity said it is looking to "rapidly scale" Exclusive. According to The Dallas Business Journal, Trinity plans to use its latest fund to invest in around 12 platform companies in the next three to four years.
Plano fintech company Alkami Technology made its first acquisition as a public firm, scooping up San Diego’s MK Decisioning Systems, a provider of digital account opening, credit card and loan origination services. Alkami paid $20 million at the deal closing, and contingent on certain milestones in 2022 and 2023, there’s an opportunity for MK to earn an additional $25 million. Alkami said the move will enhance its direct portfolio and expects it will be immaterial to its Q3 financial results. As part of the deal, MK CEO Har Rai Khalsa will become VP and general manager of a newly formed digital account opening and loan origination solutions team within Alkami.
After raising a $15 million Series A in August, Richardson-based digital health startup Recuro Health announced it acquired Dallas-based MyLifeIQ, a precision medicine-focused epigenetics platform. The terms of the deal were not disclosed. Recuro said it will fully integrate MyLifeIQ's tech into its integrated digital health solutions platform.
Fort Worth-based engineering design services firm Paragon Innovations was acquired by Berkshire Hathaway company TTI Inc.'s Exponential Technology Group, an electronic components distributor. The terms of the deal were not disclosed. Paragon Founder Michael Wilkinson will continue to lead the business as VP and general manager as part of the move.
After wrapping up its $84 million acquisition of fintech company VendEngine earlier in the month, Plano’s Tyler Technologies, a public sector-focused software service provider, has announced a new deal. The company acquired Detroit-based cloud software platform Arx. The terms of the deal were not disclosed. Arx focuses on providing tools that increase transparency within law enforcement agencies. As part of the deal, Arx staff will become part of Tyler's Public Safety Division, based in Troy, Mich.
Denton-based IT support provider Techvera was acquired by Electric, a New York IT tech provider. Electric said the move would add to its offerings and allow it to provide better customer service. The move follows a $40 million Series C round Electric raised in February.
Solo Stove is growing into an outdoor lifestyle company after making a name with its flagship portable fire pits. The Southlake-based company acquired Chubbies Shorts, Oru Kayak and paddleboard maker ISLE, bringing the four businesses under Solo Brands. The terms of the deals were not disclosed. No location or personnel changes are expected from any of the companies at the time.
Fort Worth’s ECI Software Solutions, a cloud-based business management solutions provider, acquired Pennsylvania-based enterprise resource planning software company Deacom. The terms of the deal were not disclosed. Both companies focus on the manufacturing industry. Deacom has about 210 employees, while ECI has more than 1.6K. ECI, which Leonard Green & Partners acquired last year, has made more than 15 acquisitions.
The Rise Fund, the impact-focused arm of Fort Worth- and San Francisco-based investing giant TPG, inked a deal with Southlake PE firm Gauge Capital to acquire a majority stake in teaching certification platform Teachers of Tomorrow. The terms of the deal were not disclosed. The move marks Gauge’s first announced exit of the year, following several platform investments and a new $800 million fund close.
A Richardson company that’s offering medical devices has attracted a Series A financing round. Gramercy Extremity Orthopedics landed funding of $9.83 million, according to a statement. The money will scale its technology infrastructure and product expansion with a focus on the U.S. extremity market.
Investor Activity:
Dallas serial investor and entrepreneur Mark Cuban, known for minting his NFTs, dove more into the space by joining a $4.5 million funding round for NFT marketplace Eternal. Other investors on the round include NFX, Coinbase Ventures, Gary Vaynerchuk, Dapper Labs and Arrington Capital. The Los Angeles-based company, which was built by startup Zelos Gaming, focuses on packaging video clips from the company’s game streaming partners. Cuban is backing several other startups in the NFT and blockchain space, including SuperRare, Mintable and OpenSea. He is also building a digital gallery for NFT’s of all forms called Lazy.com.
Tech-focused venture capital firm Goldcrest Capital added $950,000 to its fund titled Goldcrest Capital River SPV, LLC, bringing the pooled investment fund's total to more than $6 million. The fund is likely linked to the Dallas-based firm's investment in San Francisco startup River Financial. In March, Goldcrest led a $12 million Series A round for the Bitcoin financial services provider. The Dallas-based venture capital firm is led by co-founders and managing directors Daniel Friedland and Adam Ross. It has invested in tech startups across sectors, including travel, business services and cryptocurrency.
Fort Worth's biotech-focused venture capital firm Bios Partners reported raising a new pooled investment fund titled BIOS SIRPant Co-Invest I, LP. According to an SEC filing, Bios aims to raise $10 million in equity for the fund. It also lists Fort Worth family office Steelhead Capital Management and CAVU Ventures, founded by "Shark Tank" investor Rohan Oza, as general partners of the fund. So far, no money has been reported raised. Based on Bios' previous activity in the early-stage biotech space, with investments in local startups like Lantern Pharma Actuate Therapeutics, the new fund is likely tied to Pennsylvania-based startup SIRPant Immunotherapeutics, which focuses on using adoptive cell therapy to treat cancer cells.
After investing in Wild Earth in 2019 with a $550,000 "Shark Tank" deal in 2019, Dallas serial entrepreneur Mark Cuban continues his support of the plant-based pet food company. Cuban, along with At One Ventures, Veginvest, Big Idea Ventures, Bitburger Ventures, Gaingels, and actor Paul Wesley, participated in a $23 million funding found for the company, bringing its total to around $40 million. Wild Earth recently moved its headquarters from California to Durham, NC. It is working on launching a new line of cell- and plant-based products.
Dallas PE firm Highlander Partners sold off longtime portfolio company SignalPath, which focuses on clinical research solutions. The company was bought by Alphabet owned-life sciences organization Verily. Terms of the deal were not disclosed. SignalPath’s Co-founder and CEO Brad Hirsch, who serves as a senior advisor to Highlander, will continue to lead the company. He said the move will allow the company to scale is clinical research and studies solutions.
IPOs & SPAC Activity:
P10, a Dallas private investment solutions provider for alternative asset managers, filed to go public. The company is looking to raise $100 million in its IPO, a number that’s often used as a placeholder, to hit the NYSE under the ticker PX. Four platforms make up P10’s access to private markets: private equity through RCP Advisors; venture capital through TrueBridge Capital Partners; private credit through Five Points Capital and impact investing through Enhanced Capital. P10 has a workforce of about 150, more than half of which are investment professionals across 10 offices in nine states, including its headquarters near Knox-Henderson. As of June 30, the company had $14.2 billion in fee-paying assets under management.
Lewisville’s Parsec Capital Acquisitions Corp., a space-focused blank check company (SPACe?), upped its proposed deal size before it has an IPO on the Nasdaq. When Parsec, which is sponsored by eVTOL developer Astro Aerospace, incorporated in March, it sought up to $50 million to acquire a mid-cap target with enterprise value between $100 million and $300 million. While still planning to target an enterprise of the same value, Parsec plans to raise $75 million. It plans to list under the ticker PCXCU and acquire more businesses in the space economy, transport or technology industries. Parsec is led by CEO Patricia Trompeter and CFO and Director Paul Haber.
Dallas SPAC Spring Valley Acquisition Corp. had plans to merge with New Jersey vertical farming company AeroFarms by the end of the month, but it’s still looking to pull together the required capital. According to a filing, so many holders have redeemed their Class A shares that Spring Valley doesn’t have the minimum cash required to execute the merger. The companies are looking at raising more capital, with a portion expected to come from AeroFarms insiders. Spring Valley had $347 million in cash to fund operations as of its May investor presentation. AeroFarms was valued at about $850 million.
Dallas SPAC is taking a deal to its shareholders tomorrow that would take an EV battery metals maker public. Sustainable Opportunities Acquisition Corporation’s board is urging a yes vote to merge with Canada’s DeepGreen Metals in a $2.9 billion deal. The blank check company initially announced plans to merge with the company in March. The SPAC raised $300 million in its initial public offering in May 2020, and a private investment in public equity of $330 million, which it expects will carry the company through its first expected cash flows in 2024. According to the agreement, original investors in the SPAC will own about 12% of the combined company, and PIPE investors would own 11%. If approved, DeepGreen would be renamed The Metals Company.
Per Reuters, Dallas data center company CyrusOne is exploring strategic alternatives, including a potential sale. The report said that the company, a real estate investment trust, is working with investment bank Morgan Stanley to review its options after coming under pressure from some investors to address its sluggish financial performance and heavy management turnover. However, the report also notes there is no certainty any deal will result from the talks. This isn't the first time there were rumors of a CyrusOne sale. In 2019, Bloomberg said it was mulling a move.
