North Texas tech startups finished out the year strong, bringing on more funding in a year that has broken venture capital records.
In total, at least 10 local companies raised new funding, representing nearly $181 million. The month was carried by Shiftsmart’s $95 million Series B led by D1 Capital and a handful of local investors. At least five other companies raised more than $10 million in their funding rounds.
M&A activity tracked by NTX Inno and the Dallas Business Journal kept pace with recent months, with at least 16 deals involving local firms taking place in December. In addition, three firms are looking to go public – one via a traditional IPO and two through SPAC deals.
To help you keep track of what’s going on around DFW, NTX Inno put together a roundup of December’s financial activity.
Pro tip: You can check out daily updates on funding, M&A and VC activity in our daily newsletter, The Beat.
Funding
At the beginning of last year, Mercado Labs announced landing new funding, and now it's closing this one with a similar announcement. The Dallas-based supply chain startup has raised a new Series A funding round led by venture capital firm SJF Ventures. The company did not disclose the raise amount, which was joined by existing investors Supply Chain Ventures and early-stage Austin firms LiveOak Venture Partners and Ironspring Ventures.
A local startup is ending the year with fresh funding to bring cybersecurity protection to small- and mid-sized businesses. McKinney-based ContraForce, a no-code security automation startup, announced landing a $2 million seed round investment from Maryland cyber foundry and investor DataTribe. The move comes after ContraForce was named co-winner, alongside Virginia AI dataset training firm QuickCode.ai, of DataTribe’s fourth annual cybersecurity pitch competition
Halo announced receiving a Series B funding round — and that it has achieved a valuation of $400 million, according to a statement. This latest round represents the majority of the approximately $25 million raised since its inception in 2018. The Plano company, which offers the Halo Collar, employs technology and dog psychology to provide features that include a wireless smart fence, GPS tracker and activity tracker.
Momentum Technologies, a recycling tech company focused on electronic and battery waste, announced Dublin-based industrial company TechMet and local private equity firm Tailwater Capital’s portfolio company Freestone HoldCo, which focuses on infrastructure and manufacturing investments, have inked a definitive agreement to lead a $20 million investment in the company.
This one slipped by me while I was out last week. Local nonprofit The Dallas Foundation awarded its annual Pegasus Prize, a $50,000 grant to fellow nonprofit FreeWorld, a Dallas-based organization focused on helping the formerly incarcerated find jobs in the trucking industry. The foundation also awarded $10,000 grants to educational metaverse platform STEMuli and neighborhood revitalization nonprofit Better Block Foundation. Last year, nonprofit startup accelerator Impact Ventures took home the Pegasus Prize.
iDonate Inc., a Plano company providing digital giving services, announced the completion of a $15.2 million funding effort, according to a statement. Overall, the company has raised funding is in excess of $30M including the new financing, CEO Ray Gary said in an emailed statement. The proceeds of the raise will help with areas that include accelerating sales and marketing. The company will invest in the enhancement and growth of the Connected Giving platform, which helps turn one-time donors into long-term givers for organizations.
The Department of Energy awarded two $1.1 million small business technology transfer grants to UT Dallas professor Reza Moheimani and university-affiliated nanotech company Zyvex Labs. The funding will go to support the creation microelectrochemical quantum devices. Moheimani and Richardson-based Zyvex have been working together since 2015. Zyvex was formed in 1997 and consists of Zyvex Technologies and Zyvex Labs. Its former entity Zyvex Instruments sold to DCG Systems in 2010 for an undisclosed amount.
Local entrepreneur and SMU grad Neha Husein landed a $1,500 microgrant from Capital One at the WEDallas pitch competition for her new startup ZStash, marketplace platform for wholesalers and boutique owners. Previously, Husein (a 2020 Inno Under 25 honoree) founded Just Drive, an app allows users to earn points for driving safe and not using their phones on the road. WEDallas, is a female-focused incubator program created in partnership between Capital One and The DEC Network.
Prolucent Health, which provides technology services for managing health care hiring, raised $11.5 million in funding, according to a statement. The company will use the new capital to expand sales, marketing and client services along with broadening product capabilities. The funding was co-led by SpringTide Ventures in Cambridge, Mass., and Health Velocity Capital in Brentwood, Tenn., and San Francisco. The round also had participation from UnityPoint Health Ventures in Des Moines, Iowa.
A McKinney-based company has developed a volunteer cloud-computing platform that is paying off. Balanced Media Technology's HEWMEN Platform took home $20,000 as a part of the Tech Titans Edge Grand Challenge competition. The platform uses gameplay to train artificial intelligence algorithms.
Stride Funding, an educational funding platform with key operations in Dallas and Boston, raised a $12 million Series A round led by New York VC firm Firework Ventures, Fortune reports. The round was joined by Juvo Ventures, Graham Holdings, GSV Ventures, Slow Ventures, and Sinai Ventures.
Tango, a North Texas provider of cloud-based software, landed an investment from Berkshire Partners, according to Tango CEO Pranav Tyagi in an interview. The amount wasn’t disclosed but it is a majority stake.
Dallas-based MD Farma, a clinical cannabinoid company, announced raising a Series A funding round from local private equity firm Altacrest Capital. As a part of the deal, MD Farma will own and is taking on the name of Altacrest portfolio brand Corganics.
Workforce management startup Shiftsmart raised a $95 million Series B funding round led by D1 Capital and joined by locals including the Mark Cuban Companies and Perot Jain. The new funding brings the company’s total to $117 million. Shiftsmart was initially launched in Dallas in 2015. A spokesperson for the company told the Dallas Business Journal that it recently shifted its headquarters to New York, where CEO Aakash Kumar has been based for a while.
Nuooly, a Dallas-based peer-to-peer networking platform for independent professionals, reported raising $210,000 in convertible promissory notes out of a $475,000 offering from six investors. According to LinkedIn, the relatively stealthy company was formed in 2018 and counts Michael Roybal as its founder and CEO. Based on other SEC filings, Nuooly has raised nearly $840,000.
M&As
Southlake's Likewize, which assists with mobile devices, announced plans to acquire Optus Insurance Services Pty Ltd., a subsidiary of Singtel Optus Pty Ltd. — one of Australia’s largest mobile phone carriers. The company also announced a 15-year deal to exclusively provide Optus customers with device insurance services, plus device replacement and upgrade programs. The total consideration under these agreements is approximately $140 million. The 4K-employee company shifted its HQ to DFW from Florida at the end of 2020.
After being acquired by PE firm Windjammer Capital Investors earlier this month, Fort Worth-based nuclear energy supplier Paragon Energy Solutions made a new acquisition of its own. Without disclosing the terms, Paragon announced its acquisition of Virginia’s Rock Creek Innovations, which focuses on developing and designing safety-critical systems.
AT&T is selling off its programmatic advertising marketplace Xandr to Microsoft. Terms of the deal, which doesn’t include its advertising business supporting DirecTV, were not disclosed. Axios previously reported AT&T was aiming to get around $1 billion for the business, which has reportedly been losing tens of millions per year.
“Infrastructure-as-a-service” company FinTech Automation acquired Los Angeles-based staffing and recruiting software provider DevBase. Terms of the deal were not disclosed. FinTech said the move will help it provide a better user interface and experience to clients. According to a statement, DevBase operates in more than 13 countries.
Dallas’ Argos Health, a health care-focused revenue cycle management software firm, announced it merged with Tennessee-based EnableComp, which operates in a similar space. Terms of the deal were not disclosed. In September, Argos was acquired by New York private equity firm Welsh, Carson, Anderson & Stowe for an undisclosed amount.
Pariveda Solutions, a Dallas-based tech and business consulting firm, announced its second acquisition in December, scooping up New York management consulting business Sustena Group. Terms of the deal were not disclosed. Earlier this month, Pariveda announced its acquisition of another management consulting firm, Thought Ensemble, which is based in Denver. Terms of that deal were not disclosed either.
After going public this year, The Glimpse Group (Nasdaq: VRAR) is adding immersive technology to its capabilities by acquiring a local company. Continuing its growth through M&A deals, the New York-based diversified augmented and virtual reality firm plans to acquire Fort Worth immersive digital content company Sector 5 Digital, valued at $27 million, to drive future revenue growth.
Dallas’ MyndVR, a health and wellness VR content platform focused on the senior community, acquired Ohio-based Immersive Cure, a fellow VR content startup focused on the elderly veteran community. Terms of the deal were not disclosed. As part of the move, Immersive’s founder Jessica Benson is joining MyndVR as its new VP of market development. With the merger, the combined company is kicking off a pilot initiative to deploy its tech at New York’s MJHS Health System.
Next up, Irving-based ExxonMobil announced its acquisition of California polymer materials technology company Materia, a firm it has been working with to develop hydrocarbon-based materials since 2017. Terms of the deal were not disclosed. Now a wholly owned affiliate of ExxonMobil, Materia has offices in Pasadena, Calif. and a manufacturing facility in Huntsville.
Local private equity firm Kainos Capital, sold its portfolio company good2grow, an Atlanta-based brand of healthy kids’ drinks, to Chicago firm Wind Point Capital. Terms of the deal were not disclosed. Kainos first acquired good2grow in 2018. Before that the company had been founder-owned.
The venture arm of Dallas-based convenience store chain 7-Eleven was one of a handful of investors on an expanded $13 million seed round for California startup Serve Robotics – the spun out robotics division of Postmates, following its acquisition by Uber in May. Joining the round were Uber, Delivery Hero and Wavemaker Labs. Serve’s sidewalk delivery robots aren’t the only autonomous delivery tech 7-Eleven is interested in. At the beginning of the month, the company announced plans to pilot Nuro’s autonomous vehicles for delivery services.
After launching its SP Hypernova II, LLC fund with $6 million in equity and pooled investment fund interests last month, Fort Worth early-stage CV firm Summit Peak Investments amended its SEC filing to reflect raising an additional $9 million from 33 new investors. At the beginning of the year, Summit Peak reported raising more than $19 million from 58 investors for its first Hypernova fund. The firm’s portfolio includes notable names like Bird, Pinterest and Opendoor.
Richardson real estate software and data company RealPage announced plans to acquire HomeWiseDocs, a Reno-based document delivery system firm for the community association industry. Financial terms of the deal, which is expected to close this quarter, were not disclosed. RealPage said the move will help expand its product portfolio and market reach. HomeWiseDocs will continue to operate out of Nevada.
Accolite Digital, an Addison-based digital transformation company, announced acquiring Indian software firm Abyeti Technologies. Terms of the deal were not disclosed. Accolite founder and CEO Leela Kaza said the move will help the company reach its goal of hitting $500 million in revenue by 2025.
Marquis Software Solutions, a Plano-based financial services tech company, was acquired by Detroit private equity firm Rockbridge Growth Equity from Falfurrias Capital Partners. Terms of the deal were not disclosed. Marquis, helmed by CEO Susan Faulkner, has more than 650 customers nationwide while providing help with data analytics, customer relationship management and other areas.
Also in Plano, Repairify (dba asTech), a Kinderhook Industries portfolio company focused automotive repair software, announced its acquisition of Houston-based auto inspection company One Guard Inspections. Terms of the deal were not disclosed. Repairify said the move, which marks the company’s 13th add-on acquisition since launching in 2012, will help it expand into new market segments like mechanical failure diagnostics.
Investor Activity
According to an SEC filing, High Circle Ventures, a Southlake-based alternative investment firm, raised a new fund. The firm, founded by NTT DATA Services Senior Director Hemanth Golla, reported raising $9.25 million in equity funding from 94 investors for a fund titled HCV 006 LLC. The amount is significantly more than it has raised in other funds this year. According to its website, High Circle has invested in big names like Klarna, Robinhood and SpaceX.
After two decades in the fintech space, Arlington-based First Rate is looking to help early-stage startups break into the industry. With plans to invest $25 million over the next three years, the wealth management solutions-focused financial software company launched a new corporate venture arm. First Rate Ventures will help others scale through funding and its network in the industry, said Managing Director Marshall Smith.
TPG Rise, the Fort Worth- and San Francisco-based investment giant’s impact-focused platform, led a $170 million funding round for Israeli cleantech firm UBQ Materials, a maker of bio-based thermoplastic composites. Other investors include Battery Ventures and U.K. investor M&G’s Catalyst strategy. Prior to the round, UBQ had raised a total of $42 million. The new funding will help UBQ develop a new plant in the Netherlands and upgrade an existing facility in Israel.
After forming a venture aimed at accredited investors earlier this year, former Triten Real Estate Partners principal Ty Lee has launched Common Dwelling, a newly launched Regulation A fundraising platform focused on helping non-accredited investors find opportunities in residential real estate. With a target of raising $20 million for its first fund, Common Dwelling plans to purchase single-family units across Texas, renting them out for a period of three to five years and renovating them with in-house “strategic construction partnerships” before selling the property. Minimum investments start at $100.
Two local investors joined a $5.7 million Series A funding round for Austin health care management platform Med Claims Compliance Corporation (MCC). Among them are Southlake’s ECOT Mgmt and Dallas’ Diamond Pointe Investments. Other Texas investors include Austin-based McKinney PLC. MCC plans to use the funds to for new hires, expanding its operational footprint and further developing its AI tech.
TPG’s growth equity and mid-market investing arm joined a $17 million Series B round for New York-based digital magazine startup Air Mail as an existing investor, bringing the company’s total to $32 million. The round was led by Standard Investments and joined by RedBird Capital Partners.
Kubota, a Japanese manufacturing giant with its U.S. headquarters in Grapevine, was a lead investor on a $1.8 million funding round for Pittsburgh-based AI startup Bloomfield Robotics, which uses cameras to monitor crop growth. Per the Pittsburgh Business Journal, other investors in the Carnegie Mellon University spinout include high-net-worth individuals and two accelerators — Pax Momentum of Washington, D.C., and Thrive SBG in Los Angeles.
Fort Worth- and San Francisco-based firm TPG made a couple new investments. It was one of a handful of investors on a $380M Series C round, led by Wellington Management, for Silicon Valley edtech company Course Hero, giving the startup a $3.6 billion valuation. In another, it joined Platinum Orchid and Temasek in leading a $350 million investment in Vietnamese consumer-retail platform CrownX, which has pulled in more than $1.5 billion in funding.
IPO & SPAC Activity
Dallas fintech Apex Fintech Solutions backed out of a SPAC merger with Northern Star Investment Corp. II. The move is tied to a deal not being completed by Nov. 30. According to a statement in February, the transaction had Apex with an enterprise value of about $4.7 billion post-money and was expected to provide up to $850 million of gross cash proceeds at closing, according to the earlier statement. Northern Star said it intends to continue to identify a target business to combine with.
After nearly a decade of rumors, a Fort Worth- and San Francisco-based private equity giant is going public. TPG has not yet revealed the number of shares it plans to sell and currently has a $100 million offer size that will likely change. According to the filing, the company has 912 employees and $109 billion in assets under management. The firm will list on the Nasdaq Global Select Market under the ticker TPG. The filing reported that TPG saw $3.8 billion in net income in the first nine months of 2021. The company has more than 280 active portfolio companies.
Irving-based Biote, a hormone optimization firm, plans to list on the Nasdaq under the ticker BTMD following a merger with blank check company Haymaker Acquisition Corp. III that’s expected to close in the first half of next year. The deal is valued at about $737 million, and the combined company is expected to have $195 million in cash once it closes.
Also in Irving, Fluor Corporation’s nuclear energy unit NuScale Power is set to go public through a merger with a SPAC deal with Spring Valley Acquisition Corp. The combination is expected to be completed in the first half of 2022 and will see Fluor own about 60% of the combined company. According to a report by Bloomberg, the deal has an estimated value of $1.9 billion. NuScale – which will become the first publicly traded SMR-focused company – expects gross proceeds from the deal to be about $413 million.
Dallas-based blank check company Americas Technology Acquisition Corp., which listed on the NYSE last year in a $115 million IPO, plans to file to extend its deadline to close a deal from the end of this week until March 2022. The company has two three-month extensions permitted in its governing documents. It’s looking to combine with an entity focused on the areas of technology, media and telecommunications. In its announcement, the SPAC’s sponsor ATAC Limited Partnership said it plans to cause an aggregate of $1.15 million to be deposited into Americas Technology’s trust account.
