Roundup: the top tech and startup funding rounds, M&As and investment activity for DFW in February

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From Series A rounds to SPAC acquisitions, the North Texas tech and startup scene saw an active month of investment activity in February.

This month, at least 16 startups collectively raised more than $250 million in outside funding. The region was also no stranger to the recent wave of SPAC activity, with two local firms announcing plans to take tech-related companies public. There were also at least six acquisitions in the ecosystem. And local investors poured millions of dollars into startups both in DFW and across the country.

To help you keep track of what’s going on around DFW, NTX Inno put together a roundup of January’s activity. 

Pro tip: You can check out daily updates on funding, M&A and VC activity in our newsletter The Beat. 

Check it out below.

Funding 

Rhodium has raised $33 million in a private offering titled “Rhodium Encore” in debt and equity from 21 investors, a public filing shows. The fund will be used for a self-mining cryptocurrency project, said leader Nathan Nichols. Nichols is a partner that brokers multi-million dollar mining infrastructure deals, per his LinkedIn. He's built his bitcoin mining investment models with Chase and Cameron Blackmon, who are also listed on the public filing.

According to a video posted on the company's site by Landon Nickerson, Dallas-based ARKH has attracted $3.7 million, according to a video posted on the company's site. According to the website, the company, where he is a CEO, received a $40 million valuation. The company is aiming to bring new ideas to augmented reality, which uses technology to help bring digital elements to the real world. ARKH plans to launch its "Platform" beta, a software effort for mobile devices, and its first piece of hardware, in April, the website said. 

Cell therapy-focused biotech company Instil Bio, which, according to SEC filings, is located in Dallas and whose CEO Bronson Crouch is a founding partner of local investment firm Curative Ventures, reported raising nearly $185.5 million in equity funding from 26 investors. According to previous filings, the company has raised at least $380 million. 

Southlake-based medical device company Heart Test Laboratories, which does business as HeartSciences and focuses on using algorithms and electrocardiography to help detect heart disease, reported raising $1.1 million in debt funding out of a $1.5 million offering from 40 investors, according to a filing with the SEC. The company was launched in 2008 and has yet to receive FDA clearance for its device.

In other investor news, Novaria, a North Richland Hills-based aerospace investment company reported raising $557,000 of a proposed $15.6 million fund called Neptune Topco Holdings, according to a filing with the SEC. The firm, launched in 2011, focuses on later-stage aerospace manufacturing investments.

CAGE Bio, a California-based clinical-stage biotech company that expanded to the UNT Health Science Center at Fort Worth last summer, announced closing a $7.2 million oversubscribed Series A round. CAGE said the round was led by “professional and angel investor groups” made up of pharmaceutical execs and physicians. 

As more doses of vaccines for COVID-19 roll out, the U.S. Health & Human Services Department is again contracting with Little Elm’s Retractable Technologies, a medical device maker that focuses on automated retraction tech. The company landed a $54.2 million contract to provide the department with syringes over a five-month period that started on Monday. Retractable was awarded an $83.8 million contract in May to give syringes. According to Govtech.com, that deal was double the company’s entire 2019 revenue.

Dallas-based pre-clinical biotech company Dialectic Therapeutics, which focuses on cancer therapies, amended an SEC filing to report raising $6.35 million in equity and other options from 27 investors. According to its website, Dialectic has research partners and facilities at UT Health at San Antonio and the University of Florida Health Cancer Center. The company has raised about $5.5 million, according to Crunchbase, most recently with a $3 million award from the Cancer Prevention & Research Institute of Texas for product development research.

Texas Woman's University, in partnership with UT-Arlington, Texas A&M University-Commerce, North Central Texas College, Carrollton-Farmers Branch ISD, and the startup GreenLight, landed a $150,000 award from the American Council of Education’s Blockchain Innovation Challenge. The university and its partners are developing a credentialing platform to share educational records between colleges and employers using blockchain technology. The award will help create an MVP. If selected to move on to the next round, it could be up for another $300,000 award.

Dallas-based SURVIVR, a VR training platform for law enforcement officers, received its second Phase I SBIR Grant from the U.S. Air Force’s innovation platform AFWERX to add features to support the military branch’s training to SURVIVR’s simulator. The amount of the grant was not disclosed. The company landed nearly $230,000 in Phase III SBIR funding from the Department of Defense in September of last year. 

Finishing out our funding news of the day, Dallas-based Trained Therapeutics Discovery, an immunotherapy biotech company, amended an SEC filing from 2019 to report raising more than $6 million in equity funding from 45 investors. According to its website, Trained focuses on producing nanobiologic therapeutics, which are intravenously administered to help the body control immune cell production.

Skyven Technologies, a Dallas-based climate tech startup focused on decarbonizing heat emitted from industrial plants, analyzing sites and deploying a range of sustainable solutions, is looking to AI to build a front-end engineering platform, aided by a $1.1 million grant from the California Energy Commission. 

Flower Mound-based MyndVR, a health and wellness VR content platform focused on older adults, launched an equity crowdfunding campaign, looking to raise between $25,000 and $1.07 million via the recently launched Republic Dallas platform. The new fundraising campaign, which puts the startup’s valuation at $8 million, has already attracted more than $36,000 from 116 investors and closes in April. It would add to the $1.85 million MyndVR has raised in seed funding from backers like Capital Factory, HTC, Cope Ventures and AustinLee Ventures.

After changing its name from Black Ridge Oil and Gas to Sow Good, as it changed its focus to becoming an “emerging consumer products platform,” the company reported raising new funds. Via the sale of more than 631,000 newly issued shares of the company, which now trades on the OTC market under the ticker SOWG, raised more than $2.5 million in capital, bringing its total cash and liquidity funding to $4.3 million. 

Dallas-based shoe brand Hari Mari is looking to grow its manufacturing real estate, and it has raised $1.75 million in equity on a proposed $5 million fund from 12 investors to help, the Dallas Business Journal reports. The company, founded by Jeremy and Lila Stewart, has a flagship location in downtown Dallas and sells its products through other retailers nationwide.

After moving its HQ to Southlake from San Francisco last year, following that with a $10 million Series A round, supply chain software company Slync.io announced landing a $60 million Series B round led by Goldman Sachs Growth. The funding will help to boost its employee rolls and add offices globally. Slync.io has more than 70 employees now and could reach around 200 by the end of the year.

Dallas-based biotech company Rapid Therapeutics Science Laboratory, which focuses on CBD aerosol solutions, reported raising $500,000 in equity and other options from a single investor, in a filing with the SEC. Based on previous filings, the new funding brings Rapid’s total to at least $2.1 million. 

OxeFit, a Plano-based startup developing a connected workout service that employs modern tech tools, closed on an A round for $12.5 million that Lydia Partners led, according to a statement. Dak Prescott, Cowboys quarterback, participated in the oversubscribed funding effort and former team members Jason Witten and Dez Bryant. Demaryius Thomas, formerly of the Denver Broncos, and Cowboys receiver Blake Jarwin joined as well.

Newly launched cybersecurity SaaS startup ContraForce is planting its HQ in McKinney, with plans to create 20 new jobs over the next three years, after landing grant funding through the McKinney EDC’s Innovation Fund. Like all grants distributed through the fund, which has attracted more than a dozen companies, financial terms were not disclosed. The company's new digs will be located at the Yeager Building near the city's Craigs Ranch area.

In addition to talks from local and national entrepreneurial leaders, people tuned into the virtual events to watch the 13 startups for Impact Ventures’ fall 2020 accelerator cohort make their pitches for a $50,000 pool of prizes. And taking first place was Dallas-based fintech startup AlgoPear, which walked away with a $25,000 prize. 

Nanoscope Instruments, a Bedford-based ocular biomedical company and Nanoscope Technologies affiliate, landed $60,000 in new funding after taking home the top prize at the 3D Retina Organoid Challenge by the National Eye Institute. The TechFW client, led by Samarendra Mohany, won to develop an organoid developed from stem cells that can help monitor optical cellular composition.

M&As

Astro Aerospace, a Lewisville-based maker of autonomous eVTOL vehicles, acquired fellow Canadian eVTOL company Horizon Aircraft. Financial terms of the deal, which is expected to close in Q2, were not disclosed. 

Plano-based Tyler Technologies, a local government software provider, is making its biggest acquisition yet. In an all-cash deal valued at about $2.3 billion, the company agreed to acquire fellow Kansas-based government tech software firm NIC. The deal is expected to close in Q2.

Dating app service company Match Group is acquiring Korean social media and video tech firm Hyperconnect in a nearly $1.73 billion cash and stock deal. Since launching in 2014, Hyperconnect has grown to about 400 employees. Like the Tyler deal, The Match-Hyperconnect one is expected to close in Q2.

BGSF, a Plano-based workforce solutions provider, announced wrapping up its acquisition of Virginia ERP software provider Momentum Solutionz. BGSF paid $3.78 million at closing, and up to $2.2 million in earnouts, based on two-year growth targets. 

Frisco video game company The Gearbox Entertainment, which is probably best known for its title “Borderlands,” has been acquired by Swedish game developer and publisher Embracer Group in a deal potentially worth up to $1.3 billion. The sale will enable the company to do more with its existing brands, create new ones and, potentially, undertake the merger and acquisition of other entities and properties. Gearbox’s founder Randy Pitchford will remain as the company’s head.

Dallas-based telecom company COMSovereign acquired Colorado’s Skyline Technology Partners, a mobile infrastructure company that does business as Fastback Networks, in a $14 million deal. COMSovereign plans to merge Fastback with its Dragonwave subsidiary. The move deepens the companies 5G efforts and comes on the heels of a $15 million public listing on the Nasdaq last week. 

Investor Activity

After putting out a call last June for early-stage companies in Nigeria, Ghana, Kenya, South Africa, Egypt and Ethiopia to apply for funding, Aptive Capital, a Frisco-based VC and PE firm, announced making three $10,000 equity capital investments in two African startups and one local one from its $1 million portfolio fund. Aptive’s investments include Skyfire Digital, a Frisco-based digital marketing agency; Uganda-based Mimi Money, an AI- and blockchain-focused payments solutions company; and Emmnoch Farms, a Nigerian startup focused on the fish farm industry. 

Fort Worth’s Cowtown Angels was one of several investors on a $2.3 million seed round for Nashville-based medical device startup VenoStent, which has offices in Houston and is focused on developing biomaterial. The round was led by Creative Ventures and was joined by IAG Capital Partners, C3 Ventures, Olima Ventures, Texas Halo Fund, Cowtown Angels, and SP Investment Fund. The company has also previously been funded by Dallas’ Health Wildcatters and has raised a total of $6.4 million. VenoStent plans to use the funds on early clinical trials and to complete remaining pre-clinical work on large animals, as well as for future hiring and manufacturing costs. 

The Dallas-based PE firm Arctos Sports Partners, which focuses on buying stakes in pro sports clubs and has an affiliated SPAC focused on sports, media, entertainment and the digtital infrastructure supporting it, has secured $1.4 billion for its debut fund, Axios reports.  

Local serial entrepreneur and Dallas Mavericks owner Mark Cuban was one of 18 investors on a $40 million funding round for South Jersey-based Goldin Auctions, a marketplace for sports collectibles. The Chermin Group led the funding. Along with Cuban, other notable investors included NBA player Kevin Durant, actor Mark Wahlberg and Timothy “Timbaland” Mosley.

Nexus Dev, a standalone $20 million investment vehicle, launched  in January with the purpose to fill a gap in development capital for sustainability infrastructure, supported by Addison-based affiliate firm Nexus PMG. Nexus Dev President Josh Kaufman told the Dallas Business Journal, its purpose is to deploy capital and advisory services to fill the gap where developers need money and expertise.

The Rise Fund, the impact investing platform of Fort Worth- and San Francisco-based TPG, was one of six investors on a $150 million raise for Seattle-based ebike company Rad Power Bikes. Other investors included Counterpoint Global, Fidelity Management & Research, Durable Capital Partners and Vulcan Capital, and funds advised by T. Rowe Price Associates. Rad plans to use the new funding to double its 325-person workforce by the end of the year. 

According to a filing with the SEC, Harvest Returns, a Fort Worth-based crowdsourcing agricultural investment firm, reported raising $340,000 on a $500,000 equity raise from 30 investors for its Harvest Invest-020 fund. Typically, Harvest's funds go to a single company working on innovative agricultural techniques or technology. One of the firm's most recent investments was in California-based regenerative cattle ranch Landscape Function Management.

Fort Worth- and San Francisco-based TPG Growth, the mid-market equity platform of investment firm TPG, has acquired a majority stake in Pennsylvania-based workforce deployment platform People 2.0. Financial terms were not disclosed.

Fort Worth- and San Francisco-based TPG’s alternative and renewable technologies arm co-led a $103 million Series C funding round for Anuvia Plant Nutrients, a Florida-based sustainable fertilizer developer, alongside Pontifax Global Food and Agriculture Technology Fund. Generate and Piva Capital also joined the round. Anuvia plans to use the new funding to increase production capacity and expand the commercialization efforts of its "bio-based" fertilizer products.

IPOs/SPACs

According to Bloomberg, Dallas SPAC Sustainable Opportunities Acquisition is closing in on a deal to take public Vancouver-based metal maker for the electric vehicle battery industry DeepGreen Metals to value the combined organizations at about $2.8 billion. DeepGreen was founded in 2011 and has raised about $154 million to-date, according to Crunchbase. Sustainable, led by Scott Leonard and Scott Honour, went public in May with a $300 million IPO. It’s looking to raise about $200 million for the DeepGreen deal.

After raising more than $400 million since launching in 2009, Plano-based fintech company Alkami is looking to go public. According to Reuters, the company has selected Goldman Sachs Group to lead its IPO preparations. The report says Alkami could fetch a valuation of $3 billion. The company has seen activity in recent months, raising $140 million in a round led by D1 Capital Partners in September, following that up with its first-ever acquisition of Tennessee-based fraud-prevention provider ACH Alert for an undisclosed amount. 

Apex Clearing Holdings LLC and Northern Star Investment Corp. II, a publicly traded special purpose acquisition company or SPAC, announced a merger agreement that’s set to put the combined entity on the New York Stock Exchange. It comes after Apex was acquired by Peak6, an investment and technology firm, last year. According to the statement, the transaction gives Apex an enterprise value of about $4.7 billion post-money and is expected to provide up to $850 million of gross cash proceeds at closing.

Fort Worth biotech company Sanara MedTech closed its public offering on the Nasdaq of nearly 1.3 million shares priced at $25 per share, along with other shares dependent on underwriters executing their full options, netting the company $31.6 million in gross proceeds. Sanara said it is planning to use the funds to expand its sales team and develop its products, technology pipeline and clinical studies, among other things. The company trades under the ticker symbol SMTI.

Dallas-based health care company Signify Health made its public debut on the New York Stock Exchange last month. According to Reuters, its shares opened at $32 apiece, well above the $24 per share price the company initially set. Overall, the company raised about $564M via the 23.5 million share sale, giving it a market capitalization of $7.12 billion.

Southlake-based DHC Acquisition filed for an IPO. The company – led by Co-CEO, CFO and Director Christopher Gaertner and Co-CEO Thomas Morgan Jr. – is looking to raise $250 million by selling 25 million units at $10 each and will consist of one common stock share and one-third of a warrant. According to Renaissance Capital, with the proposed deal, DHC would have a $313 million market value.