Category: Austin (Page 31 of 318)

A decade ago, Austin-based LiveOak Venture Partners took a few years to put together its first $100 million investment fund.

Today, LiveOak Venture Partners announced Fund III, a $210 million oversubscribed fund that took just three months to close. It is the largest institutional Texas-focused, early-stage tech venture capital fund raised in more than a decade, according to the firm.

“We could have raised significantly more if we kept it open,” said Krishna Srinivasan, LiveOak Co-founder, and partner.

The fund’s investors recognize LiveOak’s strategy works, and its partners have the resolve and experience to get deals done, combined with the white-hot Texas market, Srinivasan said.

To date, LiveOak Venture Partners, founded in 2012, has almost $500 million assets under management. It has invested in almost 50 Texas-based companies which have gone on to raise more than $1 billion. One of its early investments, Austin-based CS Disco went public earlier this year on the New York Stock Exchange with a $3 billion market cap.

For Fund III, 90 percent of the capital came from institutions and 40 percent from new investors, Srinivasan said.

LiveOak Venture Partners will begin making investments from Fund III in 2022. It expects to make investments in 25 to 30 companies with the first check ranging from $1 million to $5 million with $10 million to $15 million investment over the lifecycle of the company, Srinivasan said.

“This way we can support companies a lot longer as well as we’re able to write bigger first checks with the fund,” he said.

With the new fund, core things don’t change like the fund will be focused on early-stage Texas startups, Srinivasan said. To date, all investments have been in Texas-based companies. Its portfolio includes Osano, Trust Radius, Eventus, Imandra, ConverseNow, SchooLinks, LitLingo, Spyderbot, and more.

Austin and Texas were under-capitalized markets when LiveOak Venture Partners launched and even though dozens of new firms have moved in, the market is still under-capitalized for the number of quality deals here, Srinivasan said.

“Undoubtedly there are more funds in this market,” Srinivasan said. “Undoubtedly there is a lot more opportunity in this market. It continues to be capital starved related to the size of the opportunity. So, we are in an attractive spot in relation to the companies and ideas in comparison to the amount of capital available.”

And quality deal flow in Austin is accelerating right now compared to the past 10 years, and has never been more robust, Srinivasan said.

“And it’s accelerating primarily because of talent,” he said. “Talent today in this market is better than ever before. Great talent leads to lots of exciting company formations. And lots of company formations lead to high-quality deal flow.”

And the deals are across the board and not focused on one industry. Texas is a diversified market, and it is getting to be even more diversified today, Srinivasan.

“Software is all-pervasive these days,” Srinivasan said. “Texas has so many industries with large companies. The intersection of traditional industries with software is creating lots of unique opportunities.”

For example, real estate crossed with tech leads to interesting deals like Homeward, OJO Labs, and Opcity, which are all LiveOak Venture Partners investments, he said.

Lots of law firm powerhouses in Texas led to legal technology startup Disco, Srinivasan said.

“Overall we are seeing really interesting diversified activity across a wide range of markets here which again goes back to the strength of Texas,” Srinivasan said.

When LiveOak Venture Partners started it pitched the story that the franchise was going to be early investors in category-leading companies that come out of Texas, Srinivasan said. And LiveOak Venture Partners would serve as lead directors and play an active role in the lifecycle of the business, he said.

Now, it doesn’t have to explain that vision. LiveOak Venture Partners’ track record speaks for itself, Srinivasan said. The company has had an IPO with Disco within seven years of formation, a sale of Digital Pharmacist for $125 million, a sale of Opcity for $200 million, and other exits.

“Success begets more success,” he said.

LiveOak Venture Partners specializes in early-stage companies that require a lot more help, Srinivasan said.

“That’s what we provide with our local approach,” he said. “We have optimized the way we practice our business to be the best local investor for great local companies in Texas. I think entrepreneurs do take notice. We provide a unique value proposition and hopefully, that resonates with great entrepreneurs.”

In the last few years, a number of new VC firms have set up shop in Austin including 8VC, Breyer Capital, Mithril, Sapphire Ventures, Firebrand, Capstar, Moneta Ventures, CAVU Venture Partners, and Trust Ventures.

Overall, more Venture Capital firms in Austin and Texas, in general, is better, Srinivasan said. It leads to more capital available in follow-on rounds of capital, he said.

Austin saw $981.4 million invested in 76 deals in the third quarter. For the year, Austin companies have attracted a record $3.8 billion in venture capital in 265 deals, according to the  Q3 Pitchbook-National Venture Capital Association Venture Monitor report.

“More capital coming into this market is healthy,” he said. “It’s good for entrepreneurs. It’s good for our companies so we can do larger, better syndicates with lots of follow-on financing. I think it’s all immensely positive.”

ZenBusiness, an online platform to help small businesses incorporate and stay compliant with regulators, announced last week that it has raised $200 million in additional funding.

That makes ZenBusiness Austin’s newest Unicorn, which is a company that is valued at more than $1 billion. ZenBusiness’ Series C round values the company at $1.7 billion.

Oak HC/FT led the round with backing from SoftBank Vision Fund 2, and existing investors Cathay Innovation and Greycroft.

Founded in 2017, ZenBusiness provides digital tools, fintech solutions, educational resources, and customer support to entrepreneurs, gig workers, online sellers, real estate investors, artists, and freelancers.

The ZenBusiness platform has grown more than 400 percent since March 2020. It has more than 200,000 customers.

With the latest funding, ZenBusiness plans to continue to develop its products for entrepreneurs. The ZenBusiness app provides information on how to form an LLC and create a website along with information on how to level up a business. It’s also going to focus on its fintech products including invoicing and tax software.

“ZenBusiness has revolutionized the process of launching and running a successful business,” Ross Buhrdorf, Founder and CEO of ZenBusiness said in a news release. “Like Shopify did for e-commerce, ZenBusiness is creating the category-defining solution for the service sector, providing an easy-to-use platform with embedded fintech solutions so entrepreneurs can turn their ideas into money-making realities. We handle the ‘business stuff’ so our customers can focus on their passion and build the life they want, stress-free and without sacrificing their well-being.”

During the pandemic, many people created their own businesses and ZenBusiness saw a surge in demand for its platform and products, according to the company.

“ZenBusiness’s fintech offerings change the game for how entrepreneurs manage and track their finances,” Matt Streisfeld, Partner at Oak HC/FT said in a news release. “By democratizing financial management, ZenBusiness is simplifying merchant services and putting financial power back in the hands of business owners. We’re thrilled to partner with ZenBusiness at a time when entrepreneurs are now more than ever in need of digital tools to help them grow and become successful.”

“New business formations have surged during the pandemic and this next generation of entrepreneurs need the right technology tools and resources that help them grow their businesses from an idea to a successful reality,” Kristin Bannon, Investment Director at SoftBank Investment Advisers said in a news release. “ZenBusiness is building the new ‘operating system’ for growing businesses with support from a team of trusted experts who are changing the face of entrepreneurism in the US. We are excited to be partnering with Ross and the team to create the simplest way to start and run a successful business.”

In addition to the funding, ZenBusiness announced that billionaire investor and entrepreneur Mark Cuban will be joining the company as a passionate advocate and spokesperson to accelerate the company’s transformation into a trusted and beloved brand for entrepreneurs.

“As a serial entrepreneur, I understand the challenges that come with launching and running your own business,” Cuban said. “But business owners don’t have to do it alone. They can have an expert every step of the way to guide them on their journey towards business success. ZenBusiness is that personal business coach, helping hundreds of thousands of entrepreneurs get their businesses off the ground. I am proud to be an advisor to this inspirational team and serve as a brand advocate, representing the future of entrepreneurism in the U.S.”

Innovation is a paradigm shift, said Lisa Hendrickson, co-author of Boom! Deciphering Innovation: How Disruption Drives Companies to Transform or Die.

For example, Apple’s iPhone didn’t just improve on telecommunications and the flip phone, but it altered how many people work and communicate altogether, Hendrickson said.

“It was the starting of the unbundling of the office that you could actually leave and accomplish things regardless of where you were,” Hendrickson said. “That was the kind of paradigm shift that allows us to say I don’t want to go back to doing it the old way.”

And it opens a different door than just getting better, Hendrickson said recently on the Ideas to Invoices podcast.

“We could have made a better and better flip phone and I’m sure people have actually worked on that and designed that to make that phone better and better but what really happened with innovation is we started really unpacking what does an untethered office look like,” Hendrickson said. “And that’s how the iPhone innovated.”

Why are some companies like Uber and Netflix good at innovating and some companies like Kodak, Blackberry, and Motorola bad at it?

Innovation is a mindset and it’s a foundation for how we see the world, Hendrickson said.

Companies that are successful see where the market is moving and they continue that path of innovation, Hendrickson said.

Incumbents often must protect what they have because of shareholder demands about holding onto market share and it’s a different conversation, Hendrickson said. The best way for incumbents to innovate is to set up an innovation lab with a gated environment away from existing operations, she said.

In her book, Hendrickson mentions that 88 percent of the Fortune 500 firms in 1955 vs. 2014 are gone and we’re all better off because of that dynamic creative destruction. Others like IBM and General Electric have lasted because they are better at adapting to change.

“In some parts of their business they have been able to be very forward-thinking and say times are changing we have to be able to innovate,” Hendrickson said.

When paradigm shifts happen, the market simply doesn’t need some things any long like transistors and rotary phones, Hendrickson said.

In the book, Hendrickson recounts how Nokia started out as a rubber boot maker and Marriott started as a Root Beer stand. Those are some incredible transformations over the years. Being innovative means not only adapting to change but persevering over the years and outlasting competitors and challengers.

“One of the things we can’t forget is that resources are going to allow us to go through the fallow periods to be able to move into a new innovative space,” Hendrickson said. “If you are undercapitalized you are not going to be able to do that work of transforming the company.”

The pace of change is happening faster and faster now, Hendrickson said. And the Internet of Things, Artificial Intelligence, Augmented Reality, Big Data, Blockchain, Virtual Reality, Social Media, are all converging.

“The plan is not necessarily about all the different ways you can innovate; it’s about changing the ways what the business sees as a core activity like R&D,” Hendrickson said. “Being able to have an innovation lab that works ongoingly.”

For more, listen to the entire podcast, pasted below, or wherever you get your podcasts – available on Google play store, Apple iTunes, Spotify, PlayerFM, Libsyn, and more.

All the high-rise buildings, warehouses, and manufacturing plants sprouting up in Austin mean there’s a big demand for construction technology to manage it all.

Procore Technologies, based in Carpinteria, Calif. with a large Austin office, is one of the companies that provide construction management software.

Procore on Wednesday completed its acquisition of Levelset, a fintech construction company based in New Orleans with a large office in Austin. The acquisition adds lien rights management to Procore’s platform.

“Getting paid on time should not stand in the way of successfully and efficiently completing projects,” Tooey Courtemanche, Procore’s founder, president, and CEO said in a news release. “With Levelset’s best-in-class team and technology onboard, we’ll be able to offer our customers the ability to easily navigate the complex processes that come with securing lien rights and payments.”

Procore acquired Levelset for $500 million with $425 million in cash and $75 million in Procore common stock.

“Now that we are officially a part of Procore, we’ll be able to accelerate our mission of reducing the compliance burdens and payment delays for all players involved in a construction project,” Scott Wolfe Jr., Levelset CEO, said in a news statement. “We’re excited to bring unparalleled innovation to one of the most vexing and time-consuming elements in the industry today.”

Wolfe founded Levelset in New Orleans in 2012 born out of his experience rebuilding his family’s grocery business after Hurricane Katrina hit in 2005.  

“I wasn’t intentionally going into construction,” Wolfe said. “I went to law school with intentions to join the family grocery business. Hurricane Katrina flipped that upside down.”

As a result of the destruction wreaked by Hurricane Katrina, Wolfe was thrown into a lot of construction projects.

“Levelset was born out of this experience of seeing the cash realities in the construction industry in a hypermarket post-Katrina,” Wolfe said.

It took too long to get paid in the construction industry and the process was complex and filled with red-tape, Wolfe said.  

“When I pay a dollar, I need to make sure that the dollar gets to the right people and only goes for work that is completed,” Wolfe said. That’s why he created Levelset to focus on that payment process and lien rights management.

Levelset raised $48 million before its acquisition by Procore. The company has 300 employees including 80 employees in Austin at its office on Brazos and 9^th Street.

Levelset was an app in the Procore marketplace since 2018 and the two companies knew each other well, Wolfe said. Levelset solves the cash and payment pains that companies have, and it integrates with Procore’s platform to improve the lives of everyone in the construction industry, Wolfe said.

“We see this as a milestone towards a 30-year warpath to improve construction payment and risk,” Wolfe said. “This really accelerates us in making that vision come true.”

Sana, the startup disrupting the healthcare insurance industry by providing coverage for small businesses at a discount, announced recently that it has closed on $20 million in funding.

To date, Sana, founded in 2017 by Will Young and Nathan Hackley, has raised $47.1 million.

The latest round of funding is an extension on the company’s Series A round of funding raised last year, The investors include existing investor Gigafund and new strategic partners: American Family Ventures, Breyer Capital, JAM Fund, and Harmon Brothers Ad Ventures.

“Sana’s goal is to improve health outcomes and decrease healthcare costs. We’ve developed a care model that keeps members healthy by focusing on primary and preventive care, and providing access to centers of excellence for more complex procedures,” Young, CEO and co-founder of Sana, said in a news release. “At the same time, our marketing and sales efforts are laser-focused on ensuring that as many small businesses as possible are taking advantage of that model. This round of investment supports both of these initiatives.” 

Sana Benefits provides an alternative to big insurance providers like Aetna, Anthem Blue Cross Blue Shield, United Healthcare, Cigna, and Humana. It competes with them by providing insurance that is, on average, 30 percent cheaper. Sana’s platform covers health, vision, dental, telemedicine, and maternity, in addition to benefits like ClassPass.

Sana moved to Austin from San Francisco in 2018 and has expanded dramatically. The company now has more than 100 employees.

Currently, Sana is available in Arizona, Oklahoma, Texas, Illinois, and Kentucky and has grown its customer base by 140% in just the past year. Sana plans to use the capital to invest in strategic initiatives such as advanced primary care and to accelerate their expansion into new markets and within their existing footprint. 

In addition, Sana plans to invest money in digital health offerings and other options. It will also use the funds to focus on sales.

In August, Sana partnered with Proactive MD to open a primary health care center, Sana MD in Austin. With the center, Sana and Proactive MD expect to improve care management and reduce health care costs,

Sana’s mission continues to be to expand health insurance options for small and midsize businesses.

“We wanted to offer our employees the best healthcare options available – telehealth, maternity care, mental healthcare, and an open network,” Sana customer Anika Zaman, COO of Brevy, said in a news release. “Sana was able to provide all of that at prices we could afford and customer support that made onboarding simple.”

As Austin’s technology industry grows, so do the support businesses.

This week, Touchdown PR, a global public relations agency focused on the technology industry, announced plans to move its headquarters to Austin. The company opened a new office in North Austin and plans to hire 20 new staff members over the next 18 months for a total of 35 people. Touchdown PR opened its first Austin office in 2017.

“What we see in Austin is what everyone sees in Austin it’s just such a potential epicenter for business,” said James Carter, Touchdown’s CEO, and Founder. “It’s only going to get more exciting.”

TouchdownPR also has locations across the United Kingdom, Europe, Australia, and Asia has more than 70 employees. It is ranked by O’Dwyer’s as a top 20 U.S. technology PR firm. The decision to move the official headquarters to the Austin office was led by a 50 percent increase in American revenue this year, Carter said. This spike in growth now makes America Touchdown’s top-grossing region, he said. 

“Business from our Austin office is growing 50 percent this year,” Carter said.

TouchdownPR plans to invest $10 million in talent acquisition over the next five years with plans to be the largest independent PR firm in Austin, Carter said.

“Why do people come to Austin? I think it’s to find the rock stars,” Carter said.  “The rock stars of Silicon Valley have all been found. They’ve been employed. There’s none left.”

Austin’s Katie Schaeffer is one of those people, he said. He picked her to help lead the Austin office as the company’s new business operations manager reporting to Executive Vice President and Chief Revenue Officer Emily Gallagher.

Its local clients include Solarwinds in Austin and Pathwire in San Antonio. Other clients are Forter, Globalization Partners, Exabeam, Zerto, Fluent Commerce, Leaseweb, and Datadobi. TouchdownPR specializes in enterprise technology innovation ranging from mobility, security, data protection, and storage to networks, communications, big data and analytics, and cloud.

Being in Austin wasn’t to chase Austin opportunities, Carter said. Being in Austin gave the company the ability to service both East Coast and West Coast tech brands, he said. The city’s time zone makes it easier to service clients in North America and globally, Carter said.  

“The East and West coast tech scenes love us, now we want the Austin tech scene to look at us,” he said.

Austin has lots of tech companies that are unknown to the greater world, Carter said. Touchdown PR specializes in making them go from “zero to heroes,” he said.

“There are a lot of companies doing cool things that don’t get the attention,” Carter said.

Gradient Works, a sales tech startup based in Austin, announced this week it has raised $2 million in seed-stage funding.

The company is founded by Hayes Davis and Jenn Deering Davis, previously founders of Union Metrics, a social media analytics company that merged with Austin-based TrendKite in 2018. TrendKite was then acquired for $225 million in 2019 by Cision, which owns PR Newswire and PRWeb. Platinum Equity acquired Cision a few months later for $2.7 billion.

At the time of the acquisition, Hayes was senior vice president of revenue operations at Cision and Jenn was vice president of global communications, content, and brand at Cision.

Gradient Works is a software as a service startup building software for sales and operations leaders.

“Our goal is to help companies increase their revenue velocity by automating and improving sales processes,” Jenn said in a news statement.

Founded in late 2020, Gradient Works’ first product Gradient Works Assignment has several paying customers including Upwork, WordPress VIP, Pathwire, Parse.ly, GoCardless, Luma Health, and others.

Gradient’s software automates rules of engagement, lead routing, and other assignments in Salesforce for revenue teams, to help companies increase revenue velocity, according to Jenn.

“Basically, our software works by making sure the right rep gets the right deal at the right time, throughout the customer lifecycle – from inbound lead all the way to existing customers,” she said.

The company currently has 7 employees and is made up of 85 percent women and underrepresented minorities.

Gradient’s seed funding was led by Integr8d Capital, based in Houston. Other investors include Valley Oak Investments, New York Technology Capital Partners, and a number of sales leaders and angel investors.