Category: Austin (Page 33 of 318)

U.S. Venture Capital is on pace to double from last year’s record levels of $156.2 billion invested in 12,254 deals nationwide, according to Pitchbook-National Venture Capital Association Venture Monitor data.

Already, at the end of the first quarter of 2021, 7,000 companies have raised more than $150 billion in funding.

“2021 is definitely going to be a record year and blow past last year,” said Eric Engineer, venture partner at S3 Ventures. He led an online panel discussion on fundraising with Austin-based VCs during Austin Startup Week on Tuesday afternoon. First, Engineer showed a series of slides highlighting the tremendous deal flow, company relocations, and venture capital coming into Texas and Austin.

Texas is also on pace to surpass its all-time highs in venture capital raised by companies, which topped $6 billion in 2000, at the height of the dot com frenzy, Engineer said. Last year, companies raised $4.8 billion in Texas and so far, this year, they have raised $4.6 billion, of which $2.6 billion has gone to Austin-based companies, he said.

But Kerry Rupp, general partner in True Wealth Ventures, which is raising its second $30 million fund targeted at investing in startups led by women, pointed out that women and people of color are still not seeing an increase in investment.

“Despite the increase in attention to women-led companies, because that’s what we focus on, the data actually shows that it is at an all-time low in terms of the percentage,” Rupp said. For five to ten years, the percentage of overall venture capital women-led founders receive has been around two to three percent, she said. It hit an all-time low of 1.8 percent during the pandemic in 2020 and it is hovering at around 1.9 percent, Rupp said.

“The dollars are growing, but the percentage of women getting funded is not better and that’s even more true for minorities,” she said. “If you are a woman entrepreneur or a minority entrepreneur, it still requires more hustle, strategy, etc.”

Texas is the fourth largest market for venture capital investment nationwide behind Massachusetts,  New York, and California. The bulk of the investment dollars go to the top three markets with Texas getting about 10 percent of it, said Tom Ball, general partner of Next Coast Ventures. That just leaves a lot of room for growth, he said.

“While we are at $4.2 billion, as my real estate friends like to say, we’re still in the very early innings of this,” Ball said.

The rate of ascendancy for Texas seems much greater, compared to the rest of the country, said Krishna Srinivasan, managing partner with LiveOak Venture Partners.

“We get a disproportionate level of attention in the market,” Srinivasan said. It’s led to a migration of capital and talent, he said. LiveOak Venture Partners’ portfolio companies are getting discovered much easier for follow-on financing since Austin is such a hot market, he said.

“The change here is much better compared to many of the other markets,” he said.

In addition to the startups, big tech keeps adding tens of thousands of jobs with the relocation of Oracle’s corporate headquarters to Austin, and HP moved its corporate headquarters to Houston.

Austin has also seen a slew of new projects such as Elon Musk’s new Tesla Cyber truck plant that is expected to employ as many as 10,000 workers. Apple is also finishing up its billion-dollar campus expansion in Austin. Google has announced plans to invest $40 million in Texas this year, according to Engineer’s data on his slides.

And SpaceX is building a manufacturing facility in Austin.

Samsung is also hiring 40,000 people, primarily in Texas and Australian-based Canva, valued at $15 billion, is expanding in Austin.

The rate and pace of everything is accelerating in Austin, said Kip McClanahan, general partner of Silverton Partners.

“Texas, in general, and Austin, in particular, is as wild and wooly as we’ve ever seen,” McClanahan said.

Deal size has also taken a big step-up, moving from an average $8 million funding deal in 2016 and 2017 to $12 million in 2018 through 2020 and jumping up to $21 million in 2021, according to Pitchbook-National Venture Capital Association Venture Monitor data.

In Texas, round size is also expanding especially with Series B funding reaching $37.1 million, up 283 percent from 2017’s $9.7 million. Series A funding rounds have grown to $10.6 million, up 42 percent from 2017’s $7.5 million. And seed-stage funding rounds have grown to $3.3 million in 2021, up 93 percent from $1.7 million in 2017.

In 2021, two locally backed companies have had initial public offerings: Alkami, backed by S3 Ventures and Wild Basin, in April, and Disco, backed by LiveOak Venture Partners,  in July.

In addition, Texas has five startups that have reached unicorn status this year, meaning they are valued at more than $1 billion. They are EverlyWell, The Zebra, Firefly, Axiom Space, and Workrise.

Another Texas trend is there is more local venture capital than ever, Engineer said. Some of the recent firms to move into the Austin market include 8VC, Breyer Capital,  Mithril, Sapphire Ventures, Firebrand, Capstar, Moneta Ventures, CAVU Venture Partners, and Trust Ventures. There is $25 billion worth of assets under investment in the Austin area, according to Engineer’s research.

And it doesn’t look like it’s going to slow down, Ball with Next Coast Ventures said. The quality and quantity of deals are high, and the market is competitive, decisions are being made faster and that’s good for entrepreneurs, he said.

COVID slowed things down initially but that didn’t last, said McClanahan with Silverton Partners. Work from home arrangements, Zoom, and telecommuting have led to higher productivity and efficiency with its portfolio companies, he said. They spend less time traveling and more time getting work done, he said.

“We see our portfolio, on the whole, performing significantly better,” he said.

Everyone has become more pragmatic about having disparate teams and not having everyone under the same roof, Srinivasan said. Large companies have demonstrated how they can be successful operating on a remote basis and early-stage companies can do that as well, he said.

The 11^th-annual Austin Startup Week takes place Monday through Thursday this week.

The Monday women in technology event, however, was rescheduled because of outages on the Internet throughout the day, according to event organizers.

Because of the COVID-19 pandemic, the event is primarily taking place online, although some in-person happy hours and other events have been scheduled.

The virtual event is taking place in a venue called Hopin. The event is free to attend but requires registration.

Tuesday morning, Austin Startup week kicks off with Open Coffee from 9 a.m. to 10:30 a.m. at Mozart’s Coffee Roasters. The networking event is being held on Mozart’s open-air deck.

The entrepreneurship 101, product design, AI and data science, new to Austin and fundraising tracks all kick off on Tuesday.

One of the highlights is a panel of local venture capitalists talking about “Texas Startup Fundraising in 2021: A Record-Breaking Year.”  That discussion takes place from 12:30  p.m. to 1:15 p.m. Eleven years ago, Austin companies that closed deals worth a few million dollars made headlines. Now Austin-based startups are regularly closing funding rounds in the tens of millions and some have closed deals worth hundreds of millions.

Another interesting discussion takes place on Tuesday in the New to Austin Track with “Why I Moved My Company to Austin” featuring Brandon Cates, CEO of Ametrine, Amy Sun, Founder of Daylight, Nicole Cardoza, founder and CEO of Reclamation Ventures and John Henry, Co-CEO of LOOP. Joshua Baer, founder and CEO of Capital Factory, is leading the panel.

On Wednesday, the space track, which is new this year, kicks off. So do the marketing and branding, developer, and mental health and wellness tracks.

On Thursday, the IP, sales and biz development, legal, HR, talent and culture and social impact tracks take place.

One thing that is different this year is that Austin Startup Week doesn’t have a traditional startup crawl. The startup crawl has been one of the most popular events where people visit multiple tech startup headquarters during an evening of drinking beer and networking.

Jacqueline Hughes and Joshua Baer started Austin Startup Week in 2011 and Silicon Hills News covered it. The event was much smaller initially and has grown steadily, like Austin, throughout the past decade.

In Austin, a group of engineers has created a solution to the problem of last-mile delivery.

It’s MoToGo, an at-home system for packages.

MoToGo has a vision of a future where the delivery of goods is affordable, simple, secure, equitable, and sustainable, said David Ruth, CEO and Co-Founder of MoToGo, based in Austin.

The system includes a black metal box and a metal railing that affixes to the side of the house and it’s all controlled by a smart mobile phone. The system ensures for safe and secure delivery of a variety of goods including pharmaceuticals, Ruth said.

Ruth along with Roy Stedman, the company’s Chief Technology Officer and Phil Chidester, Chief Solutions Architect, demonstrated the MoToGo system at their booth at the MOVE America conference held at the Palmer Events Center in Austin.

Founded in 2016, MoToGo has seven U.S. patents that have been issued on the hardware and software behind the delivery system.

The business model is evolving, Ruth said. But right now, a subscriber, such as a pharmacy, could have 50 boxes a month and charge its customers for secure delivery of their pharmaceuticals, he said.

The MoToGo system relies on Internet of Things sensors to track the delivery box from store to the consumer and it even records when the box has been opened. It sends notifications to the sender and the receiver at every step, Ruth said. It communicates through cellular networks, he said.

In California, where marijuana is legal, the system could be used for secure delivery of products, since delivery of products required locked boxes, Stedman said.

The company is bootstrapped. The founding team previously worked at Dell and IBM and other technology companies in Austin. Ruth worked for IBM for 31 years before leaving to launch MoToGo.

The Motogo Box

Uploaded by Motogo Systems on 2021-09-19.

A few weeks ago, LOOP, a new car insurance company, launched in Texas.

And now, LOOP has announced it has closed on a $21 million Series A funding round co-led by Foundry Group and 01A, the fund of former Twitter CEO Dick Costolo and COO Adam Bain.

The round includes participation from existing investors in Freestyle VC, Blue Fog, Uprising Ventures, and Concrete Rose, and new strategic investment from New Voices Fund and Earn Your Leisure. Rap icon and avid angel investor Nas also participated.

The Series A comes just nine months after LOOP closed on a $3.25 million seed-stage round of funding led by Freestyle VC.

The support of the investors allows LOOP to “fiercely accelerate our growth” and expand its mission, John Henry, Co-Founder and Co-CEO said in a news release.

“We are building a completely modern architected insurance company, “ Carey Anne Nadeau, Co-Founder and CO-CEO said in a news release.

LOOP moved to Austin earlier this year. They have more than 30 employees and plan to be at more than 100 in the next six months and 1,000 within a year, according to a previous interview with Henry.

LOOP, a public benefit corp., known as a B-Corp., doesn’t use credit scores, occupation or education in its underwriting. Instead, the company measures how users drive, paired with crash, weather, and traffic data.

“The result has been more equitable and competitive pricing for millennials, renters, and immigrants who are often burdened by student loans and consumer debt and are disadvantaged by legacy models,” according to a news release.

This financing makes it one of the largest Series A rounds raised by a female founder or founder of color. LOOP plans to expand its coverage to an additional 10 states over the next 12 months.

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A blue Volkswagen ID.4 rolled into Austin on Friday on a quest to break a Guinness World Record for longest road trip in an electric vehicle.

“This world record should demonstrate that an EV engine car can perform the same as a combustion engine car,” said Rainer Zietlow, a professional driver who holds several electric vehicle world records.

On Friday morning, Zietlow drove the 2021 Volkswagen ID.4 onto the lawn of Infineon semiconductor’s plant in Austin. It was the fourth stop on a 37,000-mile road trip through 48 states that began on July 18^th in Herndon, Virginia, and ends on Oct. 18^th. The stops took place at Infineon’s locations throughout the U.S. including Austin, Livonia, Michigan, San Jose, and El Segundo, California. The last stop is in Washington, D.C.

Zietlow and his co-pilot Derek Collins of Kansas City, Mo., stopped at the Infineon fab in Austin because it has played a key role in the operations of the Volkswagen ID-4.

The Austin-based manufacturing plant, the largest for Infineon in North America, is making dozens of chips that perform various functions in the car including adaptive cruise control, emergency braking system, Wi-Fi, and Bluetooth communications. Infineon even makes the chips that power the drivetrain.

Zietlow said he can’t see or feel the Infineon chips, but that’s the point. They are the magic under the hood.

“I have a good feeling that Infineon is on board,” Zietlow said. He already holds the world record for with the Volkswagen ID-3, a smaller version of the car, with Infineon on board in Germany driving 18,000 miles and visiting 850 Volkswagen dealers.

“Our semiconductors are at the heart of vehicle electrification and the enabling charging infrastructure,”  Lars Ullrich, vice president of automotive at Infineon Technologies Americas said in a news release. “By increasing range, efficiency and accessibility, we are helping the automotive industry to successfully achieve the fundamental transformation towards electromobility – to protect the environment without compromising drivers’ flexibility and comfort.”

The ID.4 is Volkswagen’s first all-electric SUV and the brand’s first global EV. With a price tag of $39,995, the vehicle can travel up to 250 miles on a fully charged battery. Zietlow uses a mobile phone app to check for his next charging station on the road. It takes about 35 minutes to recharge the battery to 85 percent, Zietlow said. Volkswagen partnered with Electrify America, which has  600 charging stations in the United States with plans to add 300 more within two years, he said. Most of the charging stations were based at Walmart stores near the highway, he said.

Infineon already has plans to expand the fab in Austin through the CHIPS for America Act, which is a bill pending in Congress that was introduced by Texas Senator John Cornyn and others, said Carl Bonfiglio, with Infineon’s automotive group based in Michigan. The Volkswagen ID.4 has more than 50 chips just from Infineon.  The CHIPS for America Act would invest tens of billions of dollars in semiconductor manufacturing incentives and research initiatives over the next decade to strengthen and sustain American leadership in chip technology.

San Jose-based Infineon Technologies entered the Austin market when it bought Cypress Semiconductor, with the sale closing in April of 2020. The Austin campus was previously an AMD site. The factory, built in 1995, produces chips using 200 mm or 8-inch diameter wafers. The Austin Infineon site has 1,000 employees and 1.5 million square feet of space of which 115,000 is cleanroom space, said Steve James, vice president of Infineon’s Wafer Fab Operations. The plan is to add 40,000 square feet of cleanroom space, he said.

Roughly 70 percent of the world’s cars contain chips made in Austin, James said. More than 35 electric and plug-in hybrid models with a drivetrain using power semiconductors from Infineon will be in production worldwide this year. Infineon has been in the automotive business for more than 35 years.  Electric cars have a lot more semiconductors than traditional cars, Bonfiglio said. That is also putting additional strain on the semiconductor industry as more electric vehicles hit the road.

Infineon also specializes in security. The chip that is in all U.S. passports is an Infineon chip.

As cars connect to the Internet, there is a need to ensure communications are secure and that no hacker can get into the car. That’s top of mind at Infineon.

“Technology you can trust is what Infineon seeks to provide,” Bonfiglio said.

MOVE America, a global mobility event, will be held in Austin at the Palm Events Center on September 28th and 29th.

Silicon Hills News readers are being offered a free pass. Just use the code SHN100 on checkout.

The event features more than 100 sponsors and exhibitors on the expo floor and more than 100 conference sessions across 18 content stages. MOVE America features more than 300 speakers from government, tech, Tier 1/2/3, and industry verticals.

It’s a chance to gather with thousands of your industry peers and network and connect in person after 18 months of Zoom calls. There’s also a drink reception.

The speakers include:

• Steve Adler, Mayor, City of Austin
• Mei Cai, Director, Battery Cell Systems Research, General Motors
• Edwin Olson, CEO, May Mobility
• Rory Harvey, VP, Global, Cadillac
• Sonia Rief, VP, Vehicle Connected Services & Program Management, Nissan North America
• Gerardo Interiano, VP of Government Relations, Aurora
• Parker Meeks, Chief Strategy Officer, Hyzon Motors
• Sam Zaid, CEO, Getaround
• Tracie Winbigler, EVP & Chief Financial Officer, Amtrak
• Jon Coleman, Director, City Solutions, Ford Motor Company
• Daniel Laury, CEO & Chief Product Officer, UdelV
• Carla Bailo, President & CEO, Center for Automotive Research
• Spencer Reeder, Director, Government Affairs & Sustainability, Audi of America
• Mark Dowd, Chief Innovation Officer, New York MTA
• Rebecca Yeung, VP, Advanced Technology & Innovation, FedEx
• Nate Litton, VP, Data & Analytics, Toyota North America
• Brett Pope, Director, Electric, Volvo Trucks North America
• Susan Anderson, Global Head of Uber for Business, Uber
• Brian Dillard, Chief Innovation Officer, City of San Antonio
• Arjun Naran, CTO & Co-Founder, Gatik
• And hundreds more incredible industry leaders​​​​​​​​​​​​

If you are part of the tech and mobility industry, register now and get your free ticket with code SHN100.

This is a sponsored post.

Austin-based Sana is a healthcare startup that provides health insurance plans as 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. Will Young, CEO and Co-Founder of Sana, recently answered questions about how the Pandemic has affected Sana’s operations.

Q. Has the Covid-19 Pandemic changed the way Sana Benefits works?

A. Yes and no. Yes, because we previously had an office in Austin that our sales team and others worked out of before the pandemic. Those employees and teams had to switch to a work from home model which was an adjustment. No, because most of our team was already remote before the pandemic so we already had good systems in place to hire and manage remote teams.

Q. Do you plan to adopt new ways of working as a result of the Pandemic?

A. The pandemic has deepened our commitment to remote work. If we were 90 percent committed before COVID we are now 100 percent.

A. When do you plan to return to the office?

We are figuring out our strategy now. It’s less and less likely we have a traditional office setup going forward. Having clusters of part-time opt-in coworking might be what we lean into, but all options are still on the table.

Q. Do you require employees to get vaccinated?

A. No. We strongly encourage employees to get vaccinated because we believe the science supports it, but ultimately it’s a personal health choice and we respect that boundary. As we return to in-person events we may request that people who have not been vaccinated abide by stricter mask protocols.

Q. What are you doing to promote company culture and motivate your team while they are working remotely?

A. The best thing you can do for company culture – whether remote or in-person – is to hire motivated people and give them the opportunity to do rewarding work. That’s far and away the most important thing we focus on. We also do things like virtual watercooler channels in slack, randomly assigned groups for social zoom hangouts (opt-in basis) and team happy hours.

Q. Has remote work been beneficial or detrimental to the growth of your business?

A. As a health plan that helps businesses save on costs, Sana’s messaging really resonated with employers during the pandemic. Employees’ health was top of mind and the bottom line was hurting as the economy contracted. We grew a lot last year.

The Internet has enabled all kinds of new businesses from blogs to shops to apps to flourish.

Many of those businesses pull in revenue from consumers, advertisers, affiliates, and more.

To help match business sellers with buyers, Flippa created an online marketplace for businesses and digital assets. And on Monday, the company announced it has raised $11 million.

The company, founded in Melbourne, Australia, has its North American headquarters based in Austin.

Flippa’s Series A round was led by Sydney-based venture capital firm OneVentures. The round also included existing Flippa investor Andrew Walsh (ex-CEO Hitwise, acquired by Experian) and Co-Founders / Investors Mark Harbottle and Matt Mickiewicz – Co-founders of Flippa, as well as 99designs. Flippa’s new investors include Gabby & Hezi Leibovich (Founders of Catch.com.au), Guy King and Bevan Clarke (Founders of RetailMeNot.com), and Tim O’Neill and Tim Fouhy (Founders of Reactive Media).

Flippa sells digital assets like mobile apps, eCommerce stores, blogs, software companies and other online businesses.

Platforms such as Amazon, WordPress, and Shopify enable entrepreneurs and creators to startup and scale their projects into sustainable companies. Flippa gives them a place to sell those businesses.

Flippa has more than 3 million registered users to date. Flippa’s proprietary valuation product and matching algorithm accurately values businesses and matches them directly with qualified buyers.

“In 2009, Flippa invented the space for buying and selling digital businesses and as a bootstrapped startup we’ve achieved #1 status globally,” Blake Hutchison, CEO of Flippa, said in a news release. “We’ve witnessed thousands of success stories, where business owners use Flippa to realize value in their extraordinary efforts. We are now growing into a market network to streamline transactions of all sizes and we’re excited to empower the next generation of entrepreneurs and investors.” 

With the funding, Flippa, with 50 employees, plans to hire more than 50 new employees in Melbourne, San Francisco and Austin as well as remotely. It also plans to use the funds to expand its platform product functionality, including scaling the company’s business valuation tool.

Sante Ventures, an early-stage healthcare, and life sciences investment firm, announced it has raised $260 million for its Fund IV.

The Austin-based investment firm plans to invest the funds in building a portfolio of 15-25 investments across biotech, health tech, and medtech businesses that demonstrate the genuine potential to deliver better health outcomes at lower costs. 

Sante secured the capital from more than two dozen limited partners including the Pennsylvania Public School Employees’ Retirement System and new institutional investors in Asia and Latin America. Returning limited partners in previous Sante funds made up nearly 90 percent of the total capital.

“The confidence and commitment of our investors led to the quickest fundraise since inception,” Kevin Lalande, Co-Founder and Managing Director of Santé Ventures, said in a news release. “We are grateful for their partnership as we deploy this next fund to capitalize on significant healthcare opportunities and nurture cutting-edge technologies that can improve lives.”

“We have seen firsthand how events over the last 18 months have accelerated the adoption of technology in all facets of life, especially in healthcare,” Lalande said. “Our team’s deep understanding of biological systems, machine learning, and health industry economics offers a truly differentiated investment platform. Santé’s disciplined portfolio strategy is designed to engineer the luck out of fund-level venture capital returns by delivering superior performance independent of vintage year and the broader macroeconomic cycle, as demonstrated in the success of our track record over the last 15 years. We are well-positioned to develop this next portfolio of compelling new venture opportunities, which will be consistent with the investment strategy and operating principles that have served the firm so well to date.”

As a first-mover in the healthcare and life science sectors, Santé typically leads or co-leads Seed or Series A fundraising rounds, often creating the new company from scratch or as an entrepreneur’s first institutional investor.

Founded in 2006, Sante Ventures has made 76 investments and had 13 exits, according to CB Insights. It has invested in Claret Medical (Boston Scientific), TVA Medical (Becton Dickinson), Millipede Medical (Boston Scientific), Molecular Templates (MTEM), AbVitro (Celgene) and Explorys (IBM Corp).

The firm has offices in Austin and Boston.