The Zebra, an insurance comparison marketplace, announced Tuesday that is has closed on $40 million in financing and hired Former Kayak Executive Keith Melnick as its new Chief Executive officer.

The Austin-based startup reported Accel Partners led the Series B financing round, the largest Texas Series B financing this year.

Melnick, former president of travel metasearch engine KAYAK, is taking over the reins of CEO from Founder Adam Lyons, who will become the company’s Chairman.

“From day one we set out to make insurance ‘black and white,’ and our team is making a huge impact in driving this industry forward,” Lyons said in a news release. “There is no shortage of interest in the insurance space right now, and we felt Accel was the right partner and aligned with our vision of creating something big. When we met Keith, we knew instantly that we found the talent to help take this company to new heights.”

To date, The Zebra, founded in 2012, has raised $61.5 million including the Series B round.

“There’s an opportunity in insurance to build the go-to digital brand for comparison shopping, just as we’ve lived through from the beginning with what KAYAK did for travel,” John Locke, a Partner with Accel, said in a news release. “The Zebra team has the product-first DNA and momentum to pull this off, and we’re thrilled to partner with Keith Melnick – who we worked with on KAYAK for over a decade – and the whole The Zebra team to help make this vision a reality.”

The Zebra provides consumers with quotes from more than 200 auto insurance companies in seconds. It has partnered with most of the top 25 insurance companies. The company plans to use the funding to expand its product’s functions, add new lines of insurance, hire more employees and expand its partnerships. It will also focus on branding and marketing.

“Insurtech is exploding, bringing concepts like peer-to-peer insurance and pay-per-mile models in front of consumers,” The Zebra Co-founder and COO Joshua Dziabiak said in a news release. “Our role is to serve as the online marketplace where these innovations are made available to consumers. The vision is for consumers to be able to learn about, search and compare their options, and then purchase and manage their insurance coverage – all in one place.”

Melnick most recently served as President of KAYAK, and was on the team that launched the company in 2004. He previously worked as a management consultant with the Boston Consulting Group, concentrating on travel, e-commerce, and financial services, and he helped create Orbitz, Inc.

“The insurance industry is where the travel industry was 10 years ago. While the industries vary in players, complexity, and structure, it’s clear to me that the time is ripe to create a similar sort of easy-to-use, yet powerful, consumer experience for both those shopping for and those providing insurance,” Melnick said in a news release. “It sounds simple, but it definitely is not, and it can revolutionize the industry. The Zebra gets that, I get that, and we share a vision and a plan to get it done.”

The Zebra’s investors also include Silverton Partners, Floodgate, Ballast Point Ventures, Mark Cuban, Daher Capital, and Birchmere Labs.

By LAURA LOREK
Publisher of Silicon Hills News

Sputnik ATX is one of Austin’s newest startup incubators and accelerators.

“We’re in a bit of a stealth mode right now,” said Oksana Malysheva, President, and CEO of Linden Education Partners and CEO of Sputnik ATX.

Sputnik ATX, which fashions itself after a Y-Combinator incubation model, will begin accepting applications for its first class in October, Malysheva said. It should have details for the criteria of what it’s looking for in startups on its website shortly, she said.

Sputnik ATX is not related to the Sputnik news agency in Russia. Its name stems from Sputnik 1, the first Earth satellite launched into orbit in 1957 by the former Soviet Union that launched the space race. Malysheva earned her B.S. and M.S. in Physics from the Moscow Institute of Technology. She went on to earn her Ph.D. from the University of Pennsylvania. She has worked as an executive with Motorola and McKinsey & Co.

Josef Merrill, chief financial officer of Linden Education Partners who will also be involved with Sputnik ATX, received his B.A. from the University of California at Davis and his MBA from the University of Chicago. He is a former U.S. diplomat.

“Sputnik is about connecting world-class entrepreneurs to investors who will propel them to success,” Malysheva said.

The Sputnik ATX incubator and accelerator will last 100 days. The first class will begin in January. Sputnik plans to host three classes a year.

Initially, Sputnik will be based in office space on the 22nd floor of the 301 Congress building downtown. It’s space the incubator has subleased from Teza, a hedge fund that occupies the entire floor. Chicago-based Teza opened an Austin office in 2015. Teza is headed up by its CEO and founder Mikhail “Misha” Malyshev, who is also the husband of Oksana Malysheva.

“It’s a nice space and Teza is a very innovative company and they have supported us nicely,” Malysheva said.

The incubator will provide office space, mentorship, coaching, training, and funding. Linden Education Partners’ first investments have been in education technology and financial technology. It will accept five to ten companies in its first class. The companies can apply from anywhere but they must be based in Austin for the duration of the incubator class, Malysheva said.

Linden Education Partners has already invested in Declara, based in Palo Alto, Calif. a social learning platform run by Ramona Pierson. It has also invested in financial technology startups: Kapitall and SaveDay.

The companies accepted into the Sputnik incubator will receive $100,000 investment in exchange for an equity stake in their company, Malysheva said. The incubator will also help them to raise additional funds to scale their businesses.

Sputnik’s investors come from a family fund and individual investors, Malysheva said.

“Most of the businesses we have made an investment in have focused on elevating the human being to their highest potential,” Malysheva said. “It has to be good economics. We have to believe at the time of investment that it is the right business for us to be in. But part of what we do also is, it’s not my term, but Goosebumps business.”

“That means something about the business you’re in has to make this world a better world,” she said.

They are also looking at investing in startups where the founder is the builder, Malysheva said. The founder is integral to the product, she said. The founder cannot outsource the production of the software or product, she said.

Sputnik chose to locate in Austin for the city’s entrepreneurial culture, and its technology talent, Malysheva said. And the quality of life here is nice, she said.

“Entrepreneurship is a very lonely endeavor,” Malysheva said.

The key is it’s a marathon, Malysheva said. The Sputnik incubator provides a network of people who are all launching companies at the same time and can draw strength, encouragement, and advice from one another, she said.

“I’m hoping to build that network of co-conspirators from the very beginning,” she said.

Ideas are nothing unless an entrepreneur can take them over the finish line, Malysheva said. Entrepreneurs need to find ways to seek strength, rejuvenate and not burn out, she said. It’s not taught enough in the entrepreneurial community, she said.

Already, Austin has the Austin Technology Incubator, one of the oldest continuously operating incubators in the country, Capital Factory with its technology accelerator, Tarmac Texas at Galvanize, Techstars, TechRanch and SKU Accelerator, among others.

But Malysheva thinks there is room for more.

“So far people have been very welcoming to us,” Malysheva said. “It feels more like cooperation than competition. I think that the more companies that invest here the bigger it gets.”

By LAURA LOREK
Publisher of Silicon Hills News

It’s going to take the mass consumer market years to catch up to all the innovation in the augmented reality and virtual reality marketplace, according to a panel of experts at the University of Texas at Austin on Thursday.

One of the challenges for virtual reality and augmented reality is convincing the consumer to put something on their face and cover their eyes, said Eric Feng, a partner at Kleiner Perkins Caufield & Byers, a venture capital firm.

“It’s still many, many, many years out before we’ll have true consumer adoption of this technology, Feng said.

Feng spoke on a panel on the Future of Infotainment at the Disruptive Technologies Conference at the University of Texas at Austin on Thursday.

Feng’s firm has invested in Magic Leap, a Plantation, Florida-based privately held company with a research and development center in Austin, which is one of the leaders in the augmented reality space. The highly secretive company, which has raised more than $1 billion in venture capital, is creating a wearable device aimed at consumers that include goggles or some kind of glasses.

The product is not available yet, but it is spectacular, Feng said.

Next week, Apple is updating its software to increase its Augmented Reality technology and that should encourage more people to use it, according to the panelists.

Augmented Reality, like the popular Pokemon Go game, superimposes information, like a Pokemon character, into a real world view. Whereas virtual reality completely immerses a person into a digital world. Google also has experimented with Augmented Reality with its Google Glasses.

Apple this summer released an ARKit to let developers build AR applications for iPhone and iPads, according to Bloomberg. Apple’s new operating system set to be released next week is expected to have even more AR capabilities to more than one billion devices.

The industry is also being held up by the cost of high powered computers to run virtual reality applications and the lack of content said Jan Goetgeluk, founder, and CEO of Virtuix. The company is based at Capital Factory and makes a virtual reality motion platform for moving freely and naturally in video games and virtual worlds.

Bob Metcalfe, professor of innovation at UT Austin and inventor of Ethernet, moderated the panel and asked the panelists what the killer application is for virtual reality?

Magic Leap could be the application that is good enough for consumers to overcome their apprehension about putting on an augmented or virtual reality headset, Goetgeluk said.

The killer app is education, said Jay Banerjee, Chief Operating Officer for ImmersiveTouch, a company that makes a virtual reality system that combines 360-degree video and 3D interactive content to teach surgical techniques to physicians inside a digital environment.

Goldman Sachs Research expects virtual and augmented reality to become an $80 billion market by 2025, roughly the size of the desktop PC market today, according to a recent report by Heather Bellini. She also sees it transforming industries like real estate, healthcare, and education.

By LAURA LOREK
Publisher of Silicon Hills News

A huge gap exists between what colleges are teaching students and what a company like Apple needs, an Apple executive said Thursday.

“I don’t consider myself an expert on education technique, what makes great curriculum or any of that. I’m sort of like a big user of the alphabet,” said Bob Mansfield, senior vice president of technologies at Apple. He graduated from the University of Texas in 1982 with a degree in electrical engineering and spent the last half of his career at Apple.

The gap exists with recent college graduates entering the workforce and not prepared for real life applications of their skills in companies.

“Maybe there is something illustrated in that gap that we need to work on fixing,” Mansfield said.

He spoke on a Future of Education panel Thursday at the University of Texas at Austin’s Disruptive Technologies Conference. About two hundred people attended the conference, held in the new Engineering and Education Research Center at the UT campus. The day-long conference tackled a variety of subjects from autonomous vehicles to applied machine learning and the future of infotainment.

The skills gap for new graduates is an issue UT educators hear all the time and that the way professors teach their students doesn’t necessarily prepare them for the real world, said Jonathan Valvano, professor in the Department of Electrical and Computer Engineering at UT.

To an extent, UT needs to provide a structured program and classes for students because they don’t know what they want or need, Valvano said. But UT can do better by breaking down the walls between departments, he said.

“We all have our own curriculum and we’re not allowed to intervene with the mechanical engineers,” he said.

UT Austin is consistently ranked as one of the top ten engineering schools in the country. The quality of the UT Electrical and Computer Engineering students is unbelievable, said Jamie Pennebaker, UT Austin, Department of Psychology. The average SAT score is 1360 and the students enter UT with an average of 30 hours of AP credit, the equivalent of an entire college academic year worth of credit hours.

“They are prepared in a way that students have never been,” he said

The students are extremely technologically savvy and that raises some fundamental questions about how do we teach our kids, Pennebaker said.

The caliber of student at UT is a lot better, they come in more prepared, Mansfield said. And UT can build a machine to crank out really good journeymen engineers that can solve a particular problem but they need to be able to work collaboratively with others in other disciplines to solve problems collectively, Mansfield said. The curriculum background a new employee has at Apple doesn’t define them, he said.

To create engineers prepared for industry, universities need to expose students to the world outside of the classroom to a much higher degree earlier, Mansfield said.

The creative process at a technology company involves liberal arts, human behavior and a wide variety of interests, Mansfield said. Booksmarts alone will not cut it in the corporate world, he said.

“I can work work with the world’s smartest people but I’m no where close to one of them,” Mansfield said. “So I do think there’s a sort of set of certain human behaviors and things like that, that schools have to do more of because if they don’t people are going to come into our company, for example, and struggle for a long time until they learn what makes that work. And it isn’t about their competitiveness with their neighbor or they got the right answer so many years in a row that they don’t know what happens when they don’t get the right answer one time. And they learn how to take risks in spite of the fact that a lot of engineering is about taking all the risk out of everything. I think those are human qualities that have nothing to do with being book smart in engineering.”

In addition, UT needs to start thinking of its students as lifelong learners and provide opportunities for them beyond their degrees, said Nina Huntemann, director of academics and research at edX.

“UT Austin don’t think about the students as just being your students for four years, think about them as being your students forever,” Huntemann said.

Provide them with opportunities, using online tools, to continue to train them so they can stay on top of what industry needs, she said.

“Breaking out of, frankly, degree programs that are defined by x number of credits and x number of years,” she said. “It should be continuous, constant, how can UT and the engineering schools rethink the delivery of education throughout someone’s career.”

The Austin-based on-demand delivery service, Favor, announced Thursday that it has reached profitability and raised $22 million in venture funding.

S3 Ventures led the Series B financing round, which included existing investors.

“Scaling a high-touch, hyper-local logistics business is no easy task, and all the credit goes to our team’s relentless focus executing on our strategic growth plan,” Jag Bath, Favor CEO said in a news release. “Achieving profitability at this scale, and the vote of confidence from our existing investors, is validation of what we are doing and underscores the future of the on-demand economy.”

Favor plans to use the funding to continue its growth in the Texas market and beyond. To date, the company has raised $34 million. It previously raised $12 million in Series A round of funding led by S3 Ventures with participating from seed investors Silverton Partners, venture capitalist Tim Draper and others.

“Favor has proven that they are building a healthy, scalable business while maintaining their superior service and strong position in the on-demand delivery market,”Brian R. Smith, S3 Ventures Managing Director, said in a news release. “The company’s decision to avoid growth at all costs to instead focus on surgical, smart growth, has led them to beat their profitability goal by six months—a truly impressive achievement. We remain excited and confident in Favor’s future as they build upon this success.”

Favor has made six million deliveries since its launch and plans to make four and half million this year. To meet demand for its services, the company is hiring more than 25,000 independent contractors.

Founded in 2013, Favor is currently available in 15 cities across Texas.

Hurricane Harvey hit South Texas hard and with billions of dollars in losses, it is proving to be one of the costliest natural disasters in our nation’s history.

Houston, Beaumont, and the Port Arthur area received more than 50 inches of rain in a short amount of time flooding many houses and businesses and wreaking havoc with gas, water and food supplies.

And the storm also wiped out areas of Port Arthur, Rockport and other coastal areas.

It will take people and businesses in the hardest hit areas years to recover and rebuild.

USA Today reports the storm could cost as much as $190 billion.

So many individuals and businesses have responded like true selfless heroes in the aftermath of the storm. This is a roundup of some of the funds they are raising to help with the relief effort.

CORPORATE AND INDIVIDUAL FUNDRAISING FOR HURRICANE HARVEY VICTIMS

The Michael and Susan Dell Foundation along with Texas Gov. Greg Abbott have created the Rebuild Texas Fund to raise $100 million to aid in storm recovery efforts in Houston and other areas. The Dells have pledged $36 million to the fund and they are matching $1 for every $2 pledged until midnight tonight.

The Mercury Fund, a VC firm in Houston, is spearing the Entrepreneurs for Houston fundraising effort. “While there are many ways to give, we ask that you consider giving to the Hurricane Harvey Relief Fund established by Mayor Sylvester Turner. This fund has been created through the Greater Houston Community Foundation, and will directly serve victims affected by the storm. In the coming weeks and months, we will also share initiatives and programs that both directly help Houston’s entrepreneurs as well as solve the dynamic challenges that arise from this unprecedented event. Please join us, Entrepreneurs for Houston – http://entrepreneursforhouston.org, and other leaders of the Houston entrepreneurial community, as we give financial support to the Mayor’s Relief Fund.”

J.J. Watt, an NFL Superstar with the Houston Texans, has raised nearly $20 million for the Houston Flood Relief Fund on the YouCaring donation platform.

Other celebrities including Sandra Bullock have donated personal funds to help relief efforts for Hurricane Harvey, according to a Today Show story. The actress pledged $1 million to the American Red Cross.

And the website, GoFundMe, has a roundup of various groups raising money for disaster relief, ranging from the Rockport Chamber of Commerce to Jordyn Grace, the three-year-old child who was rescued along with her deceased mother in Beaumont.

Amazon and Whole Foods: To support relief efforts, Amazon and Whole Foods Market announced they will match cash donations made via Amazon – up to $1 million total – to the American Red Cross for Hurricane Harvey Relief.

Apple: Apple has donated $2 million to the Red Cross, and is matching employee donations two-for-one and through its efforts the company has helped to raise more than $3 million, according to an article in BuzzFeed. It is also soliciting donations for the American Red Cross from customers on its websites.

Facebook agreed to match donations made to help victims of Hurricane Harvey. Its community raised more than $10 million, according to a post by Mark Zuckerberg.

Google has announced a $1 million matching campaign for the American Red Cross among other giving efforts.

H-E-B Grocery: H‑E‑B will donate $100,000 toward Hurricane Harvey relief efforts and begin accepting customer donations for the families and communities devastated by the storm,” according to a news release. All H‑E‑B, Central Market and Joe V’s Smart Shop stores across Texas launched a statewide tear pad campaign, giving customers an opportunity to support victims through donations of $1, $3, or $5, which can be added to their total grocery bill. All monies accepted will benefit the American Red Cross for Texas Flood and Hurricane Relief, The Salvation Army and Feeding Texas.

Microsoft is “contributing $2.5 million in cash, technology and services to support relief efforts and to help nonprofit and public-sector organizations as they assist the community in recovery. This includes an initial cash donation to the American Red Cross for its most pressing needs,” according to a blog post.

Samsung: “Samsung Electronics America, Inc., Samsung Austin Semiconductor, Inc., and Samsung Semiconductor, Inc. today announced a collective donation of $1 million to the Hurricane Harvey relief efforts in Texas and the surrounding southeast region of the U.S. impacted by the storm. Samsung is contributing a combination of cash funds and in-kind product donations, giving $500,000 to the American Red Cross’s on-site relief efforts and another $500,000 to local charity partners and schools in the form of Samsung products – including washing machines, dryers, charging stations, tablets and laptops, as well as employee volunteerism,” according to a news release.

Texas Instruments is making a $100,000 donation to the Red Cross. The company is also matching the donations of employees and retirees up to $100,000.

Toyota: “Toyota Motor North America (TMNA) is partnering with Toyota Financial Services (TFS), The Friedkin Group, Gulf States Toyota (GST) and Toyota and Lexus dealers nationwide, to provide a combined relief effort of over $3 million to serve the people impacted by Hurricane Harvey,” according to a news release. “The group’s relief efforts include funds to organizations such as the St. Bernard Project and American Red Cross, matching contributions, in-kind donations, volunteerism, and the donation of pre-owned vehicles.”

Valero: The San Antonio-based company is contributing $1 million to the American Red Cross to assist in relief efforts from Hurricane Harvey and associated flooding along the Texas and Louisiana Gulf Coast.

Walmart: “Walmart and the Walmart Foundation have committed up to $20 million in support of relief efforts in response to the severe weather impacting the Gulf region,” according to a news release. “This includes $10 million focused on support of American Red Cross shelters and $2 million in support of the Hurricane Harvey Relief Fund at the Greater Houston Community Foundation, which was announced today at a press briefing with Houston Mayor Sylvester Turner.”

For a comprehensive list of corporate donations to Hurricane Harvey relief efforts please visit the U.S. Chamber of Commerce Foundation’s website.