Austin-based Compare Metrics, which makes analytics software aimed at retailers, announced that is has received $3.8 million in follow-on venture capital.
Austin Ventures led the investment with additional funding by existing investors Julie Allegro of Allegro Venture Partners, Bob Greene of Contour Ventures, Capital Factory, Mike Maples Jr. of Floodgate, Brett Hurt of Hurt Family Investments and independent investors Dean Drako, Ralph Mack and Adam Ross.
This brings the company’s total amount of funding to $8 million. Compare Metrics received $4.2 million in first-round financing in May of 2013.
Compare Metrics recently made the Greater Austin Chamber of Commerce’s A-List of Startups to watch in Austin in the emerging growth category.
The company plans to use the money to support its continued growth. It now has 32 employees and several customers including Fresh Pair, Lenovo, Rebecca Minkoff and The Wasserstrom Co.
Garrett Eastham, Mikael Solomon and Stephen Goodwin co-founded Compare Metrics in 2012 based on Eastham’s cognitive science research at Stanford University.
“It has been exciting to watch the journey of the Compare Metrics team from a three-person start-up to the high-growth and maturing company that it is today. This follow-on investment is indicative of the company’s progress in proving out their market value,” Chris Pacitti, general partner with Austin Ventures, said in a news release. “Retail client results have again validated our original confidence in the company’s potential, and I look forward to watching their continued success going forward.”
Category: Austin (Page 196 of 308)
Alex Mitchell, President and co-founder of StepOne, photo courtesy of StepOne
LiveOak Venture Partners led the round with participation from Silverton Partners. The company plans to use the money to add employees and to expand sales and marketing efforts.
StepOne has already landed Telstra, Australia’s largest telecomm company, as a customers as well as a major U.S. cable company.
StepOne’s flagship product, Contextual Care, focuses on helping large companies with complex products deliver excellent customer support.
Although lots of products currently exist to help companies deliver self-service customer support, StepOne has a different approach. It “predicts a customer’s question by measuring hundreds of customer attributes like what services they’ve purchased, the state of their billing cycle and the technical performance of the product, and then matches the customer to the optimal content for their predicted question,” according to a news release. “The adaptive software continuously learns which specific pieces of support content best serve various customers, improving its accuracy over time.”
“From product onboarding to in-life support, self-service for customers is broken,” Alex Mitchell, CEO and co-founder of StepOne, said in a news release. “Even though most customers prefer to solve problems themselves, they give in and finally pick up the phone. There is too much content presented to solve the problem and too many irrelevant results in search queries. Our goal is to make self-service become a driver of customer loyalty and cost savings. When you can answer the customer’s question before they’ve even asked it, they’ll stick with you.”
Last year, LiveOak Ventures invested an undisclosed amount of seed stage funding into StepOne.
“Since our seed investment, the StepOne team has achieved significant customer traction, so we are delighted to continue to support the StepOne team as they scale their operations,” Krishna Srinivasan, co-founder and general partner at LiveOak Venture Partners, said in a news release.
By LAURA LOREK
Founder of Silicon Hills News
Crowdfunding Photo licensed from iStockphotos.com
Last year, Austin companies received $626 million in venture capital, or 49 percent of the venture capital dollars for Texas, said Michele Skelding, senior vice president of global technology strategies at the Greater Austin Chamber of Commerce.
“That still represents just 2 percent of the nation’s venture capital,” Skelding said. “So we’re hungry for capital.”
Equity-based crowdfunding may help meet that need.
Skelding hosted about 50 people involved in Austin’s startup industry at a roundtable lunch discussion Wednesday focused on newly proposed Texas crowdfunding rules.
Crowdfunding is one of the hottest trends now for entrepreneurs, said Joy Schoffler, owner of Leverage PR and a board member of the Crowdfund Intermediary Regulatory Advocates.
Soon entrepreneurs will be able to use equity-based crowdfunding to tap into investments from the general public. The U.S. Jobs Act, signed into law by President Obama in 2012, is making that possible. It will begin once the U.S. Securities and Exchange Commission issues its final rules governing the practice. So far, the SEC has missed several deadlines to enact the rules.
Meanwhile, Texas and eight other states have proposed regulations that would allow for intrastate crowdfunding.
“The term crowdfunding can really cause some confusion,” Schoffler said.
Several types of crowdfunding exist including reward-based crowdfunding on platforms like Kickstarter and IndieGoGo. And individuals can crowdfund for donations on platforms like GoFundMe.com. Some crowdfunding sites like Kiva.org allow people to provide loans to small businesses worldwide. And sites like AngelList.com allow companies to raise funds from accredited investors or individuals who make more than $200,000 annually and have a net worth in excess of $1 million, not including their house.
But the ability to raise money from the general public through equity-based crowdfunding is not yet possible in Texas. But in other states like Georgia it is legal. Georgia already passed its own rules allowing for equity-based crowdfunding.
The SEC has 175 pages of rules being proposed to govern equity-based crowdfunding, said John Morgan with the Texas State Securities Board. Texas’ rules would not supersede the SEC rules, but if Texas passes its own crowdfunding rules, the state would allow equity-based crowdfunding before the federal government.
In April, Texas proposed its own equity-based crowdfunding rules. The Texas State House Committee on Investments and Financial Services will hold a hearing on May 21st to discuss the proposed regulations.
“The great thing about the rulemaking process is it’s flexible,” Morgan said. “There’s time to tweak these rules to get the exact right product we want.’’
The proposed Texas regulations let a company raise a maximum of $1 million every 12 months. An accredited investor can invest any amount. But a non-accredited investor can only invest $5,000. They can only invest through a Texas-owned website, known as a crowdfunding portal, which holds the funds in a bank account until the company meets its funding goals.
And all investors must prove they are Texas residents by providing a valid driver’s license or voter registration card. The regulations also require companies looking to raise money to post a detailed business plan, financial statements and other documents including a list of risk factors.
During the roundtable discussion, Ben Dyer, a serial entrepreneur and entrepreneur in residence at the University of Texas, asked about the ability to raise funds from investors in other states.
With the proposed Texas equity crowdfunding rules, all of the investors in a company must reside in Texas, Morgan said.
Shari Wynne, founder of Incubation Station, a consumer products accelerator, expressed concerns about the filing of a business plan and freezing a business outlook for a certain time since so many startups constantly pivot and change.
“There’s any number of things that are shifting with these companies,” she said
Paul Trowe of Replay Games expressed concern about the $5,000 limit per un-accredited investor. He said his company received $650,000 in 30 days on Kickstarter in 2012 and multiple donors gave more than $10,000 each.
“My questions is why would I want to do equity based crowdfunding with such strict regulations when I can go onto Kickstarter or IndieGoGo or any of the other platforms and not have such restrictions?”
Jason Seats of Techstars said Kickstarter and IndieGoGo work well for certain types of businesses focused on consumer products. It’s more difficult for companies working on enterprise sales tools to raise money from rewards-based crowdfunding, he said.
The legislation isn’t just aimed at tech companies, said Nathan Roach, an attorney with the RAM Law Firm. It’s designed to help all small and medium sized businesses statewide that need access to capital to expand, he said.
The crowdfunding portals help standardize the process of raising money from investors, Roach said.
Investors need to be able to trust the information coming to them, Roach said. The crowdfunding portals provide an entrepreneur with the necessary tools to raise money in compliance with the securities regulations, he said.
The portals also have to vet investors to make sure they are qualified as residents under the Texas rules.
Rick Timmins, chairman of the Central Texas Angel Network, said his members would not invest in equity-based crowdfunding ventures because of the regulations and disclosure requirements.
He said he sees a bifurcation of offerings when equity-based crowdfunding is enacted. Companies will either go down the path of traditional fundraising from accredited investors or they will choose to do equity-based crowdfundng from non-accredited investors, Timmins said.
“I don’t see it being co-mingled at all,” Timmins said.
CTAN is one of the most active angel networks in the country. The organization’s members invested $9.7 million in 33 companies last year.
Crowdfunding is one more tool in the arsenal of tools that are being provided to small and medium sized business throughout Texas, said Amir Mirabi, director of the governor’s office for small business economic development.
Crowdfunding provides more ways for the entrepreneurs who are building things to get close to their customers, said Gordon Walton with Gaming SIG in Austin. Kickstarter has been the most successful platform for game companies. They make up the largest category on Kickstarter, followed by film and TV, Walton said.
But equity based crowdfunding for the gaming industry is going to be a challenge, Walton said. The regulations need to be simple and friction free, he said.
“We would love to have our consumers become investors if they can overcome the challenges,” Walton said. “But the hurdles are high.”
A conference on crowdfunding is being held later this month in Austin. The CFGE Crowdfund Real Estate Summit and Entrepreneur Summit will be held May 29th and 30th at the Hilton Austin.
By JAIME NETZER
Reporter with Silicon Hills News
The world is experiencing a data explosion.
Datical seeks to help companies manage all that data flowing through their organizations.
The Austin-based startup has created software that lets companies update applications on their databases easily and efficiently.
Last week, the Greater Austin Chamber of Commerce named Datical as one of its A-List Startups to watch for 2014.
So far, Datical has raised $4.7 million, according to its Crunchbase profile. Last December, Datical closed on a $3 million Series A round of funding led by Mercury Fund.
Its flagship product is Datical DB software, based on the open-source project Liquibase, which is used by hundreds of organizations. The software can help companies forecast how a database change will affect production and it makes it easier and faster to update databases.
“Essentially, it allows development operators and database administrators to sort of collaborate on database change management,” explains Pete Pickerill, vice president of products and co-founder of Datical. “We think everybody with a large-scale web-presence would benefit.”
W20 Group, a Datical DB customer, uses it to analyze large volumes of online interactions for information about its customers in health, technology, and consumer products.
“Datical DB gives our teams complete visibility into all of our relational database environments, and integrates seamlessly with our continuous integration process,” says says Steve Blackmon, Director of Data Sciences at W20 Group.
Datical DB eliminates manual change scripting and the errors that can result with automatic script authoring, Pickerill explains. The solution works within existing application release processes, using existing tools. This reduces risk and cost and speeds time to market, he says.
Datical only emerged from stealth mode in October of 2013, but its management team is experienced: Datical is co-founded by Daniel Nelson, Datical CEO; Robert Reeves, Datical CTO; and Pickerill — all founders of Phurnace Software, which was acquired by BMC Software in 2010.
Mercury Fund, a seed-stage venture capital firm, focuses on tech innovation. Datical was an appealing investment for the firm for multiple reasons, explains Aziz Gilani, Director at Mercury Fund and a Datical Board Member.
“Their unique business model makes developing new functionality very fast and provides a loyal, active user base for Datical to tap into,” Gilani says. “We invested for these reasons, but primarily because of Datical’s experience and track record.”
How many times have you sat around wondering if you could get someone to deliver your groceries in one hour by horse in Austin?
Well today is your lucky day if you’re downtown. Instacart, a San Francisco-based grocery delivery service, will be doing that today in downtown Austin. But the horse delivery is just for one day as a special way to introduce the service to the market.
The one-hour guaranteed delivery service launched Wednesday in Austin. It allows customers to order items from Royal Blue Grocery and H-E-B and have them delivered in an hour or less. Instacart plans to add other stores in the coming weeks.
Instacart charges $14.99 for one-hour delivery or $3.99 for two-hour delivery with a minimum order of $10.
Instacart, which is available in nine other cities, faces competition in the Austin market by Burpy, a Longhorn Startup company. Burpy offers grocery delivery in the Austin, San Antonio, Houston and Dallas markets.
Instacart, which raised $8.5 million last year, is available in San Francisco, Boston, Chicago, Los Angeles, New York, Philadelphia, San Jose, Seattle and Washington, DC.
Instacart touts its “crowdsourced labor force dubbed personal shoppers” who use their own cars for delivery which makes grocery delivery more affordable since the company doesn’t need inventory, warehouses, trucks and full-time drivers.
“Austin is the fastest-growing city in the U.S., with a young, tech-savvy culture and a major university downtown,” Apoorva Mehta, Instacart founder, said in a news release. “Those are all factors that we look for in an expansion city. We think Austinites will really appreciate the convenience factor of Instacart, and we’re working hard to establish relationships not just with the big chains, but also the local merchants such as Royal Blue Grocery who add so much to the local Austin community.”
Instacart will initially deliver to downtown neighborhoods. It also offers a subscription-based delivery service for $99 for free delivery on all orders of $35 or more.
Phunware, a mobile advertising platform, announced it has bought Digby, marketing software for retailers to reach customers on their mobile phones.
The two Austin companies did not disclose the terms of the deal.
The deal adds Digby’s customers including Cabela’s, Kohls, Catalina Marketing and Hasbro to Phunware and lets the company offer consumers ads on demand at the store on their mobile phones.
“Digby is a pioneer in the mobile commerce and location based marketing software market and we’re thrilled to add their team and platform to the expanding Phunware ecosystem,” Alan S. Knitowski, co-founder, chairman and CEO of Phunware, said in a news release.
Phunware, founded in 2009, has raised $38.4 million, according to its CrunchBase profile.
A graduate of the Longhorn Startup class for undergraduates at the University of Texas, LanternCRM just landed $250,000 in angel funding.
The Austin-based startup received funds from angel investors Jason Cohen of WP Engine, Rob Taylor or Black Locus, Mikey Trafton of BlueFish, Bill Boebel of Pingboard, Pat Matthews, formerly of Rackspace, and Joshua Baer of OtherInbox and the Capital Factory Fund.
“The funding comes as user signups increased 300 percent over a period of three months, which included the Austin Chamber of Commerce,” according to a news release.
The company plans to use the money to hire more employees and to market its software to more customers.
LanternCRM provides automatic email tracking, phone service and integration with hundreds of existing business services in its software. Those features make it different from competitors like Salesforce and Microsoft Dynamics, according to the company.
“We found that a vast majority of users either hated their current CRMs or didn’t use them because they required too much manual data entry,” Alex Smith, CEO and co-founder said in a news release. “By focusing on automatically importing from existing systems like email, calendar, and phone, our users can focus on building their business instead of maintaining information in their CRM.”
LanternCRM is part of the Capital Factory’s accelerator program.
“The CRM market for enterprises may be maturing, but the market for small businesses is wide open and growing, fueled by the popularity of mobile and tablet computing. Entire industries that still operate on pen and paper or email and spreadsheets are going to be transformed over the next few years,” Baer said in a news statement.
By LAURA LOREK
Founder of Silicon Hills News
Godzilla Movie Photo: Classic Media
Mike Maples Jr., managing partner of Floodgate Ventures in Palo Alto, thinks so. He wants Austin to hatch what he calls a thunder lizard in the next 10 years.
Bob Metcalfe, professor of innovation at the University of Texas at Austin, creator of Ethernet and founder of 3Com, quizzed Maples about thunder lizards and Austin’s entrepreneurial ecosystem, during a fireside chat at the Austin Chamber of Commerce’s A-List awards event Wednesday night.
“The metaphor comes from Godzilla,” Maples said. “Godzilla was half radioactive from atomic eggs and swam across the ocean and emerged with an attitude and began destroying things breathing fire on things, swiping buildings, eating on cars and trains like they were sausage links and that always just struck me as the right metaphor for a startup.”
“A startup that is great should try to be a thunder lizard,” Maples said. “It should be an attacker, not a defender. It should be adaptive.’’
Google and Microsoft are thunder lizards and Twitter is a thunder lizard in the making, Maples said.
Metcalfe asked him if there are any thunder lizards in Austin.
Maples said at times Dell has encroached on that title, but he said there’s an opportunity for more here.
What does Austin have to do to get more? Metcalfe asked.
“I’ve surveyed the infrastructure pretty systematically and I think we’re doing really well – we’re firing on all cylinders as I’m fond of saying,” Metcalfe said. “So what do we have to do differently to get some thunder lizards?”
First, Austin needs to believe it can happen, Maples said. He first mentioned the idea of creating a thunder lizard a year ago at the Austin Technology Council’s CEO summit.
“My manifesto is Austin creates a $100 billion exit in the next 10 years,” Maples said. “Some people would say $100 billion you’re smoking weed, that’s crazy.”
But Google is worth more than $300 billion, Maples said. Facebook is worth more than $150 billion, he said. Cisco and Microsoft and Apple, were worth more than $500 billion each at one time, he said.
“A lot of people I talk to in Austin don’t really believe it can happen yet,” Maples said. “In order to have $100 billion outcome, you have to be willing to try to go after the exponential game-changing ideas. And we need to have a community that supports that. We need to have a community that doesn’t call those people crazy and whacky and stupid but sort of roots them on and cheers them on.”
Silicon Valley knows it can do it because it has Google, a thunder lizard, but Austin doesn’t have one, apparently, Metcalfe said.
“So how do we get to believe we can?” Metcalfe asked.
Maples said he doesn’t have the answer. But he looks for change events that are even bigger than the company, Maples said. For example, Microsoft was started in the era of the microprocessor and Bill Gates envisioned that hardware would be a commodity and software would be the rare, valuable resource, Maples said.
“Most of the startups I’ve seen that have that potential to be super huge they find some tectonic shift in the technology landscape that’s bigger than any one company,” Maples said.
Then the entrepreneur has some proprietary insight and then they go build a company around that, he said.
Maples invested early in Twitter and it’s evolving to become a thunder lizard. Some of the ideas sound kind of crazy early on, Maples said.
The founders of Twitter were either going to call it Voicemail 2.0 or Twitter, Maples said. The founders explained that Twitter didn’t have a roadmap or revenue model but that it was a micro-blogging service that let people say what they were doing in 140 characters or less. Yet Jack Dorsey and Evan Williams were able to explain the potential that blogging and self-expression is a big idea and that they expected millions of people to use the platform.
To create a thunder lizard, an entrepreneur has to have “a non-consensus but correct view of technology transformation,” Maples said.
Maples looks for an “entrepreneur who is such an authentic match to a technology change it’s almost like they couldn’t do any business but that business. Too many people when they start a company are just doing a startup. They are not doing the kind of startup that could be their life’s work.”
For example, Ethernet was Metcalfe’s life work so it made sense for him to found 3Com, Maples said. He was moved to start something because he had fundamental insight the rest of the world didn’t see, he said.
“I used to say the answer is Ethernet, what is the question?” Metcalfe said.
Metcalfe asked Maples if Austin’s thunder lizard might crop up out of the new Dell Medical School at UT.
The potential areas of “atomic eggs” or radioactive eggs to hatch the thunder lizards in Austin are from the new medical center or from Google’s super fast Internet broadband network, Maples said.
One area that could possibly create a thunder lizard is in the area of genetic engineering, Maples said.
The question is when will someone drop out of UT to create the next thunder lizard, he said.
Metcalfe said he didn’t encourage people to drop out of UT and that he finished his undergraduate degree at MIT and graduate degree at Harvard and was still able to create a game changing technology and company.
Going back to the topic of thunder lizards, again Metcalfe asked how does Austin encourage them.
“In Austin, we continue to up our game, we continue to add fuel to the fire, we keep adding cinders to the fire,” Maples said. “I would like to see the belief we can create a $100 billion outcome become more mainstream. I would like to see us do things as a community to encourage that outcome.”
Maples said he will come to Austin more often to work with Metcalfe on incubating “radio active eggs.”
The talk ended with Maples, who got choked up recalling being in high school and reading about Metcalfe and his Ethernet invention, told Metcalfe he just wanted to thank him.
“Well you’re welcome,” Metcalfe said. “And that’s sort of the difference between you and me because I can’t remember when I was in high school.”
Bob Metcalfe, professor of innovation at UT, Ethernet inventor and 3Com founder with Mike Maples Jr., managing partner of Floodgate Ventures. Photo courtesy of Bob Metcalfe.
By LAURA LOREK
Founder of Silicon Hills News
The Austin Chamber of Commerce Wednesday night named 12 companies to its A-List of Startups for 2014.
In the “Emerging” category, for companies that have raised less than $1 million, the winners were Datical, Compare Metrics, Embrace, TeVido, TrustRadius and Spot on Sciences.
“You look at the companies that won last year and this year, it’s a great honor to be part of that group, because they are next generation of startups that are pushing us forward,” said Bart Bohn, founder of Embrace, customer relationship management software.
“It’s such a strong entrepreneurial business environment in Austin and it’s such an honor to be part of it,” said Jeanette Hill, CEO of Spot On Sciences, the maker of HemaSpot, a medical device that allows for remote blood sampling.
“It really means that all your hard work paid off. People see that what you’re doing is exciting and innovative and game changing and Austin is the place to be game changing,” said Laura Bosworth, CEO and co-founder of TeVido BioDevices, which uses 3-D printing technology to reconstruct and print breast tissue.
In the “Growth” category, for startups that have raised more than $1 million, but less than $10 million, the winners included Umbel, Square Root, Set.fm and TurnKey Vacation Rentals.
And in the “Scale” category, for companies that have raised more than $10 million, the winners were Novati and Chaotic Moon.
More than 250 startups applied for the Austin A-List awards, a 65 percent increase in participation from last year’s list, said Michele Skelding, senior vice president of global technology and innovation for the Greater Austin Chamber of Commerce.
Skelding and Hugh Forrest, executive director of South by Southwest Interactive, announced the winners at the inaugural State of Innovation event at the ACL Live at the Moody Theatre. Several hundred people attended the event which featured fireside chats by Laura Kilcrease, managing director of Triton Ventures, and Gene Austin, CEO of Bazaarvoice and Bob Metcalfe, professor of innovation at the University of Texas, inventor of Ethernet and co-founder of 3Com, and Mike Maples Jr., partner at Floodgate Ventures.
In addition, Mayor Lee Leffingwell proclaimed May 7th as “Austin Innovation Day.” He also discussed the city forming an “Innovation District” around the Dell Medical School. And Thomas G. Osha, managing director of Innovation and Economic Development at the Wexford Science and Technology, gave a talk about the development of Innovation Zones.
In 2007, a startup called Click Forensics began operations in San Antonio.
The company, founded by Tom Cuthbert and Tom Charvet, tackled the problem of click fraud online. Austin Ventures provided its initial $500,000 seed stage funding.
Click Forensics ended up moving to Austin and pivoted to become a marketing analytics firm called Adometry.
On Tuesday, Google announced it bought Adometry for an undisclosed price. Since its inception, Adometry has raised $29.1 million in venture funding from Austin Ventures, Shasta Ventures and Sierra Ventures, according to the company.
Adometry and Google both announced the deal it in separate blog posts.
“Adometry is joining Google, where they will build on the momentum of our existing measurement and analytics offerings, which include Google Analytics Premium as well as other products,” according to a Google blog post.
“Attribution solutions, like Adometry’s, help businesses better understand the influence that different marketing tools — digital, offline, email, and more — have along their customers’ paths to purchase (http://goo.gl/tXTliw). This heightened understanding, in turn, enables businesses to measure marketing impact, allocate their resources more wisely, and provide people with ads and messages that they’re likely to care about.”
Adometry moved into new headquarters last year at the Lakewood Center Building II on Capital of Texas Highway and has about 135 employees, according to this profile Silicon Hills News did of the company in March.
“We couldn’t be more excited to join Google — a company that shares our core values. Not only do they focus on innovation and solving big problems, but also like Adometry, they seek to provide brands and their agency partners with the analytics and insights to improve the performance of their marketing campaigns,” Paul Pellman, Adometry’s CEO, wrote in a blog post on its site.
