The opening of Capital Factory founder Josh Baer’s Texas Startup Manifesto 2.0, which he released last month, starts with the lines “Texas is the most promising technology market in the United States. Now the 9th largest economy in the world, it‘s clear that the rest of the world is waking up to the potential in Texas.”
And according to a report by Telstra Ventures, the numbers bear that out. The firm ranked North Texas as highest growth region in the country for VC investments, with 66 perecnt more investment dollars from 2019. Telstra also said Dallas ranks second when it comes to attracting new startups.
Last month, more than 20 companies landed new investments, with a $40 million Envy Gaming deal being one of the largest. At least three firms raised new funds, and multiple companies announced plans to go public through traditional IPOs and via SPAC mergers.
To help you keep track of what’s going on around DFW, NTX Inno put together a roundup of March’s activity.
Pro tip: You can check out daily updates on funding, M&A and VC activity in our newsletter The Beat.
Funding
Animal Cloud Device Connectivity, a Texas Christian University-based startup developing and commercializing a vital monitoring platform to help keep law enforcement animals safe and healthy in the line of duty, is joining the seventh cohort of the Cincinnati-based faith-focused OCEANS accelerator program. With its participation in the program, Animal Cloud will also receive a $50,000 seed investment provided by an early-stage Chicago VC fund, which focuses on “purpose-driven” entrepreneurs. There's also the company's potential to gain an additional $25,000, based on its progress during the 16-week accelerator program.
A new chip company created by some of the people who worked at Texas Instruments landed $15 million in seed funding. Called Nebula Microsystems, the Richardson- and Shanghai-based company develops semiconductors the ramp up analog products. Morningside Group backs the company. It plans to use the funding to expand its team to focus on products in industries ranging from consumer and automotive to health care and telecommunications.
Fort Worth-based Nacuity Pharmaceuticals, a clinical-stage biotech firm focused on ocular oxidative stress, reported raising $3.17 million in equity and other options from 71 investors on an $11 million raise in a filing with the SEC. According to previous filings, Nacuity has raised nearly $10 million in total.
Plano-based PICKUP, which helps retailers get products to shoppers’ homes, raised $15 million in new funding. That pushes the total to more than $30 million for the company, said Founder Brenda Stoner. The new funding is a Series B round, according to a statement. NewRoad Capital Partners led it in Arkansas with participation from existing investors such as Florida Funders. Additional investors include Autotech Ventures, which has an office in Silicon Valley.
Bunch Bikes founder Aaron Powell walked off the “Shark Tank” stage with some new funding. The Denton-based e-cargo bike company landed a deal with Shark Barbara Corcoran. In exchange for a 15 percent stake in the company, Corcoran invested $100,000 in equity with an additional $150,000 as a loan. Initially, Bunch Bikes was seeking $250,000 in exchange for a 10 percent equity stake. After filming, Powell wrote on Bunch Bikes' website that Shark Robert Herjavec split the deal with Corcoran after becoming a customer.
Nuurez has closed on its first funding round. And its investors are now homeowners or at least owners in a share of a home. The residential investment, management and leasing platform reported raising a $1.4 million crowdfunding campaign at a $4 million pre-money valuation that saw more than 1,450 investors participate. Those investors are now owners of a share of the properties that the company leases via its platform.
A Dallas tech startup focused on the industry has also raised new funding. Rechat, which offers software tools for residential agents, has attracted more than $1 million, bringing its total to more than $5M. The latest funding for Rechat, which started in 2015, came from New Valley Ventures, a new investment vehicle by Vector Group.
OncoNano Medicine, a Southlake-based biotech company focused on cancer diagnostics and treatment, amended an SEC filing from October to report raising an additional $4.9 million on a $60M raise from three new investors. The new funding brings the equity round's total to more than $26.4 million. Twenty-four investors have participated in the raise.
Augmenta, a Paris-based company retrofitting farming tractors with smart technology with offices in Dallas, reported raising an $8 million Series A round led by CNH Industrial. Pymwymic and existing backers HCVC and Marathon Venture Capital joined the round, which brings the company's total funding to more than $10.5 million. The new funding will help Augmenta bring a pesticide spraying service to market and expand its R&D efforts and add more crop types to its portfolio.
Last year, teleCalm launched a crowdfunding campaign to help expand its team and tech offerings. Recently, the company hit a milestone in that effort. The Allen-based developer of a managed phone service for people living with dementia has hit its Wefundr crowdfunding campaign goal of $100,000, surpassing it by more than $9,000. And it is leaving the initiative open until April 19. Previously, the raise was set to close in February. So far, 131 investors have joined the raise.
Dallas- and Bay Area-based Precision Livestock Technologies, a machine vision and AI company aimed at boosting agricultural productivity and animal wellbeing, announced raising $600,000 seed round via Harvest Returns' crowdfunding platform. Precision said it plans to use the funds to develop commercial pilots, customer delivery methods, and product development.
Eden Green Technology in Cleburne landed an investment of $12 million from existing investors and has broken ground on a new facility. The new site, which covers 1.5 acres, is set to create 30 full-time jobs and will be in an opportunity zone, the statement said. The facility is expected to produce approximately 500 tons of leafy greens per year.
While in the process of relocating its HQ from the DFW area to East Austin, AgencyMVP Inc. reported landing a $3.5 million investment. The funding happened back in November but was announced last week. Austin VC firm Silverton Partners led it.
Dallas esports and entertainment company Envy Gaming, landed a $40 million investment led by TV station owner Gray Television. As part of the deal, Gray will invest $28.5 million in the company and name two members to Envy’s board. The company plans to use the new funds to expand its content creation and production efforts, as well as bolster its teams and full-time staff (Envy has about 50 full-time employees, minus players under contract). The move comes as interest in esports is growing. According to Newzoo, revenue in the esports industry is set to grow to $1.08 billion globally in 2021, growth of over 14 percent.
After landing seed funding in 2019, Edgetensor has secured a new bridge investment to see it through a Series A round. The Plano- and India-based edge AI computing startup announced landing a new investment from Denver VC firm 3Lines Venture Capital. The financial terms of the deal were not disclosed.
Addison-based Securonix, a cloud-based security information and event management tech company, secured a $24 million investment from Capital One Ventures, bringing its total funding to about $65 million. With the new funding, the company plans to invest in new technology and partnerships, as well as expand its 600-person headcount up to 800 this year. As part of the deal, Securonix will collaborate with Capital One “to develop new product use cases for monitoring cyberattacks, insider threats, fraud, application security, and OT/IoT security.” According to the Dallas Business Journal, Securonix saw more than 50 percent growth as of the end of the year in ARR.
Cyber Defense Labs, a Dallas-based cybersecurity startup, raised $10 million in new funding. While investors were not disclosed, the raise follows another $10 million round the company announced in an SEC filing this past August. The company plans to use the new funding to invest in its targeted growth strategy. According to the Dallas Business Journal, Cyber Defense has more than 50 employees across multiple offices. The company is also planning an East Coast expansion this year.
Astrapi Corporation, a Dallas-based signal modulation-focused telecommunications startup, announced landing its second Phase I SBIR contract from the U.S. Air Force. Financials were not disclosed. According to the Small Business Administration’s website, Astrapi has been awarded about $923,000 in Phase I and Phase II SBIR grants from the National Science Foundation for its work in spiral polynomial division multiplexing, a method for transmitting large amounts of data. The new grant will help further the company’s work on signal protection.
SALT Insure, a recently launched Grapevine-based digital home and auto insurance app co-founded by Dustin Parker and Jonathan Simmons, reported raising $25,000 in equity funding from a single investor on a $2 million offering, according to a filing with the SEC. The company’s website says it is “committed to helping [insurance agents] cut [their] quoting time in half.”
After landing a $500,000 seed round led by local investors Sasha and Ed Bass, Fort Worth-based Gozova, an on-demand moving services startup, early last year, the company tells Fort Worth Inc. that it's close to ending a $2 million equity financing round. Since launching in 2017, Gozova has expanded to several Texas markets and others in Florida and Tennessee. The company also told the publication it's eyeing a launching in other markets soon, including in Southern California, Chicago and on the East Coast.
According to a filing, Car Capital Technologies, a relatively stealthy Carrollton-based tech company focused on the auto dealer industry, reported raising more than $5.4 million in equity funding from 56 investors on an $8.84 million raise with the SEC. Last year, the company reported raising $25,000 in equity funding from a single investor.
After announcing a $2 million seed round raise in July, fast-growing Dallas startup Nada has hit a major milestone in that campaign. When the residential real estate startup launched the campaign, it said part of that money would come from crowdfunding investments. Now, with 59 days left on the crowdfunding site, which was via the Republic Dallas platform, Nada has raised $1.07 million– the maximum allowed under current SEC rules. More than 2,700 investors joined the crowdfunding raise. The company said it set its valuation cap at $12 million.
Plano-based Max-IR Labs, which has developed an infrared sensor system that analyzes liquids for their compound makeup, landed a $750,000 Phase II SBIR grant from the National Science Foundation to develop a prototype kick-off field test of its patented ISMIR infrared radiation sensor. According to a Small Business Administration website, the new grant funding brings Max-IR's total to nearly $1.9 million along with other NSF grants and ones from the Department of Defense.
Sparkyard says its vision is to see Fort Worth become “nationally recognized as a place where people come for their ideas and companies to thrive.” And a new grant funding is helping it expand that vision. The entrepreneurial-focused collaborative networking and support platform, formed by the UNT Health Science Center, the City of Fort Worth and TCU’s Neeley School of Business, has received a $450,000 grant from the U.S. Department of Commerce’s Economic Development Administration that the HSC is matching with a $112,500 grant of its own to help boost is capabilities of connecting entrepreneurs to resources to help them grow their businesses.
M&As
Carrollton-based Innovations in Nutrition + Wellness, an R&D, manufacturing and marketing solutions company, acquired Bee Health, a U.K. maker of nutritional supplements, with plans to combine the two companies to expand its manufacturing capabilities. The financial terms of the deal were not disclosed. The announcement comes on the heels of INW's acquisition by New York investment firm Cornell Capital from Rosewood Private Investments. The financial terms of that deal were not disclosed either.
Dallas-based DartPoints, an owner/operator of edge colocation data centers and portfolio company of Astra Capital Management, inked a definitive agreement to acquire North Carolina's Immedion, a colocation provider, cloud and other managed services. The financial terms of the deal, which is expected to close in Q2, were not disclosed. According to DartPoints, the acquisition will more than double its data center footprint and expand its presence into six new states.
RumbleOn, an Irving-based motorcycle buying and selling e-commerce platform, plans to acquire dealership chain RideNow Powersports, The Dallas Morning News reports. According to the reports, the combined companies would have an enterprise value of nearly $850 million and are set to have $1.5 billion in revenue. As part of the deal, which could close as early as next week, RumbleOn has received a $280 million commitment from Oaktree Capital.
With many looking for socially distanced outdoor activities during the pandemic, ParkHub is making a new acquisition. In an all-Dallas deal, the parking management software startup scooped up Bonfire, a campground management and reservation platform. Financial terms of the deal were not disclosed. As part of the deal, Bonfire CEO Jerry King will join ParkHub as president of the Bonfire business unit.
Dallas’ Topgolf Entertainment Group officially merged with Callaway Golf Co. The deal was announced back in October, and at the time, valued Topgolf at about $2 billion. The merger was part of a pivot away from IPO plans due to the pandemic. While Topgolf will keep its operations in Dallas, the combined company's HQ will be located in Callaway's home base of Carlsbad, California.
After Twin Point Capital took a large stake in the company in a 2019 deal, Dallas- and Toronto-based video surveillance company Stealth Monitoring is merging with fellow security technology firm Eyewitness Surveillance, which is based in Maryland. Financial terms were not disclosed. The combined company will have more than 1,000 employees across 33 offices.
Investor Activity
Fort Worth- and San Francisco-based investment firm TPG’s impact investing arm The Rise Fund led a $335 million funding round for New York’s LiveKindly Collective, a group of plant-based startup brands. The round included $135 million converted from prior round. Existing investors Rabo Corporate Investments and S2G Ventures also participated in the round. LiveKindly plans to use the money to expand further into the U.S. and China and use it to fuel future acquisitions.
A new VC firm is emerging in North Texas. Plano-based Sentiero Ventures announced closing on a $10 million fund with 20 investors aimed at cloud-based AI companies. Sentiero expects to make 10 investments of up to $500,000 into companies initially, focusing on industries including business services, software, marketing, real estate, financial services, healthcare and entertainment. Managing Partner David Evans told the Dallas Business Journal, the company plans to invest heavily in Texas-based companies.
Curative Ventures, a Dallas-based biotech-focused firm, amended a filing with the SEC for its fifth fund to report raising $74 million from 23 investors. Curative, a backer of now-public biopharma company Instil Bio, first filed the fund with the regulatory body in 2018.
Southlake firm Trinity Private Equity Group was the lead investor on a $14 million Series B round for Austin at-home diagnostic device startup Nuclein. The firm joined a list of early Nuclein (which has now raised $20 million in total) investors that includes William Cunningham, former president of the University of Texas at Austin; John Butler, former director of IC2; David Shockley, CEO of International Biophysics Corp.; Joe Aragona, co-founder and general partner of Austin Ventures; Jason Dorsey, president of the Center for Generational Kinetics; and Alan Richey, a senior vice president at Dell Technologies.
New York-based LocalCoho, a sustainable fish farming company, is looking to raise funding on Harvest Returns’ crowdfunding platform to expand its recirculating aquaculture system. LocalCoho has previously raised $6.2 million, according to the Fort Worth Business Press. Since its launch, Harvest Returns has raised more than $11 million for innovative agriculture and agtech companies.
Southlake PE firm Trinity Private Equity Group, alongside RLG Capital, invested in Utah-based immersive training platform eLearning Brothers. Financial terms were not disclosed. The investment will help fuel eLearning Brothers’ acquisition of game-based learning company The Game Agency.
Capital Factory launched an investment fund that operates under something akin to a software-as-a-service, or SaaS, model, which marks the first rolling fund for the investment arm of the startup accelerator and coworking company. Josh Baer, founder and CEO of Capital Factory, said it will likely “make on the order of 10-20 investments per quarter” from the rolling fund. Investments will range from $50,000 to $250,000. He added that a rolling fund also provides access to smaller investors who frequently cannot meet minimum investment requirements of venture capital funding rounds.
Fort Worth- and San Francisco-based investment giant TPG is upping its stake in California’s Sauce Labs, a mobile and web app testing firm, after first investing in the company in 2019. Financial terms of the deal were not disclosed. The new investment will help the company expand its platform capabilities. As part of the deal, Art Heidrich, a member of TPG’s technology investment team, will join Sauce Labs’ board.
Mark Cuban has made another 'Shark Tank' investment. This one is Maryland-based Everything Legendary, a plant-based burger startup. Describing co-founders Duane “Myko” Cheers, Danita Claytor and Jumoke Jackson as “amazing, driven, smart entrepreneurs with a great product always make a great investment,” Cuban invested $300,000 in exchange for 22 percent of the company.
Dallas Venture Partners, a recently-launched early-stage VC firm led by managing director Dayakar Puskoor with offices in Irving and India, was one of 11 investors on an $8.5 million funding round for Austin's powersports buying marketplace Rollick. The round was co-led by Sandbox Insurtech and TechNexus Venture Collaborative and joined by LiveOak Ventures, Silverton Partners and Capital Factory. The new funding brings the company's total to $22 million since emerging from stealth in 2017. Rollick plans to use the new funds to expand its services nationwide.
IPOs/SPAC Activity
Instil Bio, a Dallas-based clinical-stage biopharmaceutical firm, is now a publicly traded company. The firm debuted on the Nasdaq Global Select Market under the ticker symbol TIL in March with a market valuation of more than $3 billion. During its first day of trading, Instil saw its share prices jump by about 32 percent, trading at $20 per share. The company had initially set share prices between $17 and $19 per share.
Plano-based Alkami Technology — one of the better funded companies in North Texas — filed for an initial public offering. The fintech that helps banks and credit unions with digital services is seeking to join the public markets, according to a new filing with the U.S. Securities and Exchange Commission. The underwriters include Goldman Sachs, J.P. Morgan and Barclays. The company is seeking $100 million, though that’s often a placeholder.
Three SPACs created by Fort Worth- and San Francisco-based investing giant TPG have filed to go public. The tech-focused TPG Pace Tech Opportunities II is looking to raise $450 million in its IPO, giving it a market value of about $511 million. Another focused on struggling mature companies, called TPG Pace Solutions, is looking to raise $250 million with its IPO. And TPG Pace Beneficial II, which is focused on companies with strong ESG, set its IPO at $350 million.
Dallas-based media-, sports- and entertainment-focused SPAC Victory Acquisition Corp. filed for a $250 million IPO, according to a filing with the SEC. The company plans to trade on the Nasdaq under the ticker symbol VACIU. The company is led by Dallas Stars Executive Chair James Lites and includes former Dallas Cowboy Roger Staubach and musician Sammy Hagar among its directors.
In February, Southlake-based SPAC DHC Acquisition Corp. filed for a $250 million IPO. Now, the tech-focused company is upping that IPO to $300 million, offering 30 million units at $10 per unit. Each of those units will consist of a Class A ordinary share, as well as one-third of a redeemable warrant. A whole warrant can be used to purchase a Class A share at $11.50 a pop. The offering is expected to close tomorrow, after which Class A stocks of the company will trade on the Nasdaq under the ticker DHCA and warrants under the ticker DHCAW.
After a previous attempt at a SPAC merger that failed to get enough shareholder votes, Dallas' Switchback Energy Acquisition Corp.'s second attempt at taking California-based e-vehicle charging station technology company ChargePoint public is going through. The merged company, which will be called ChargePoint Holdings Inc. and will trade under the ticker symbol CHPT on the NYSE, is expected to be valued at about $2.4 billion. The startup expects to get $683 million in cash from the merger with Switchback. Also, as part of the deal, the warrants offered to investors in Switchback's IPO, which allow them to buy discounted shares, will trade under the symbol CHPTW.
