By HOJUN CHOI
Reporter with Silicon Hills News

In light of the growing prevalence of services making up the state’s “sharing economy,” the Texas House Committee on Business and Industry met Wednesday to discuss the impact of city regulations associated with peer-to-peer exchange platforms.

Responding to the testimonies given at the hearing, Committee Chairman Rene Oliveira, D-Brownsville, told Silicon Hills News that he and the other representatives will have to study the regulations of other states that are home to ride-sharing services.

“We need to do more research on what kind of regulation they have, and see whether those measures have been effective or not,” Oliveira said.

At the hearing, much of the conversation revolved around the screening process of “Transportation Network Companies,” like Uber and Lyft, which left the city of Austin in May after failed efforts to repeal regulations that the companies deemed burdensome.

“Our mission is simple. Transportation as reliable as running water- everywhere for everyone,” said Sarfraz Maredia, general manager for Uber. “Essential to achieving this goal is the ability to operate under modern regulations that embrace technology while enhancing public safety.”

Outdated transportation regulations have made it increasingly harder for existing ride-hailing services to operate, Maredia said.. Both representatives from Uber and Lyft questioned the effectiveness of added regulations to the screening standards of these services, especially fingerprint background check requirements.

But when neither of the companies could produce data on the number and frequency of incidents that occurred during rides, several of the representatives responded with raised eyebrows.

“I don’t understand how you all cannot produce any statistical evidence,” Oliveira said.

Some ride-sharing companies, such as Dallas-based GetMe, and Austin newcomer, Wingz, told the committee that they have no problems with regulations that deal with added measures to the screening process of potential drivers.

Ed Kargbo, the president of Austin Yellow Cab, told the committee that he believes a screening process for drivers through a fingerprint-based background check is not only effective, but that it should be considered the “gold standard” for such services.

Representative Matt Rinaldi, R-Irving, however, told Silicon Hills News that the support for more regulation on the screening process of these companies might not be in the best interest of public safety.

“I think you’ll find that people will try to latch onto whatever argument to back up their position,” Rinaldi said. “In reality, they’re not advocating for public safety or some other argument; they’re advocating for protections in the industry- competitive protections that will allow them to make money when they’re not providing the best product that people want.”

Though the majority of the hearing was associated with the public safety standards of ride-sharing services as well as those of taxi companies, the committee also heard from individuals from the “home-sharing” industry, such as AirBnB and HomeAway.

Matthew Curtis, director of government relations for HomeAway, told Silicon Hills News that he thinks burdensome regulations only lead to a lack of compliance.

“The added problem for the state is having to deal with ‘patchwork’ regulations that differ throughout the state,” Curtis said. “That can be very confusing.”

Representatives also heard testimony about the regulatory powers of Housing Associations in the state. The committee is scheduled to meet again tomorrow morning for a hearing on cybersecurity.

By LAURA LOREK
Reporter with Silicon Hills News

It’s hard making a mobile app.

Just ask 80 fourth, fifth and sixth graders who just finished Hello World’s first engineering program and created 12 prototypes. Hello World, a new after school program, teaches kids web and mobile development, game design, data science and design thinking.

The kids designed the apps, learned to code, created wireframes and planned everything while thinking about the user’s experience, said Matthew Hernandez, who just finished sixth grade at KIPP Austin Academies of Arts & Letters and a HP team member.

“You have to put yourself in the user’s shoes,” he said.

Hernandez spoke to more than 200 people at Hello World’s Demo Day. Students from 15 Austin schools participated in six sessions during three weeks. The kids formed 12 teams and Saturday morning at Google Fiber Space downtown they presented their products to judges, their friends, family members and others.

In addition to making a mobile app, the students used HTML and CSS to create websites.

“It’s not as hard when you’re in a team,” said Hernandez. “Everybody had ideas. We worked really well together. We didn’t have many struggles.”

Sabina Bharwani and Danielle Wilson Burnett co-founded Hello World to meet a need for more Science Technology Engineering and Math opportunities for Austin students. Bharwani heads education technology and innovation for Teach for America. Burnett works at GameSalad as principal learning architect. They garnered support for the program from Google, Iron Yard, General Assembly and Dell.

A team of judges picked five team winners. The judges included Michael Georgoff, senior vice president of product at Main Street Hub, Katy Jeremko, founder and chief creative officer at re:3D, Blake Ligon, Google channels specialist and Patrick Benfield, STEAM and makerspace director at St. Gabriel’s Catholic School.

The judges declared the eBay Pandas team overall winner. The team created a homework helper app for Emily, a student, to let her control her room’s lighting and listen to music while completing a homework “to do” list.

During the program, Jeremiah Anderson, who just completed sixth grade at KIPP Austin College Prep, and a member of the eBay Pandas team, said he learned a lot about data science and programming.

His parents, Royce and Etta James, said Jeremiah has always shown an interest in science and engineering. He even won a special scholarship to attend space camp this summer.

Jeremiah said he is interested in becoming a chemical engineer and computer scientist and he wants to work for NASA.

The HP team won for “most innovative app idea” with their buddy system app to help a student transition from elementary to middle school. One of the judges, Georgoff praised the kids for their teamwork.

“Great products get built by teams and not individual people,” Georgoff said.

The AirBnB team won for “making hard choices” for their navigation app to help a kid get around a middle school campus. They decided to leave out games. The Dell team won for their “user-centric” app which provided a virtual school tour. And the Twitter team won for “strong application of the design thinking process” for their homework helper app with study guides, games and practice problems and a way to communicate with the teacher.

James Caras with Macmillian Learning, an educational publishing company, attended the event while his teenage son took the SAT exam. He found out about it on the Austin Ed Tech meetup group. Caras, an entrepreneur who sold his online homework company Saplings to Macmillian a few years ago, liked the high caliber of ideas from the kids.

“A lot of the things these kids are talking about we are talking about every day,” Caras said.

Customer empathy is key to developing a successful app, Caras said. He was thrilled to see Hello World’s program teaching the kids to think about the customer first.

“We think we’re geniuses in our jobs and these kids are running circles around us,” Caras said.

A mission of Hello World is to emphasize diversity, equality and access to big ideas in technology, said Benfield, with St. Gabriel’s Catholic School. The kids came from a wide variety of ethnic and socio-economic backgrounds, he said.

Access creates opportunities, said Bharwani.

In college, 98 percent of computer science majors have exposure to computer science before they go to college, Bharwani said.

Yet computer science is not taught in most schools, Bharwani said. So Hello World is able to fill the gap and expose kids to opportunities in those fields at an early age, she said.

Vyze, a financial technology company, has raised $13 million in venture capital to fuel its growth and expand into new markets and product lines.

Austin Ventures and StarVest Partners of New York led the Series B financing round. The company, founded in 2008, has raised $35 million including the latest funding round.

“We’re building a unique company here in Austin that will help both retailers and lenders unlock the full potential of their businesses. Our goal is to help businesses provide the financing consumers need to buy the products they want, when they want them,” Keith Nealon, Vyze’s CEO, said in a news release. “Investments like these enable us to grow and create better solutions to meet the challenges merchants and lenders are facing today.”

Vyze plans to use the funding to further develop its platform technology and to expand its sales and marketing efforts and to expand into new markets.

“What’s exciting about Vyze is the huge potential for growth,” Chris Pacitti, general partner with Austin Ventures, said in a news release. “There’s a huge need for financing solutions among retailers as well as manufacturers, and those needs will continue to grow as consumers increasingly turn to online and mobile platforms when researching and buying products.”

By LAURA LOREK
Reporter with Silicon Hills News

After a grueling 35-mile bicycle ride in the Hill Country to prepare for a triathlon, Steven Welch felt some aches and pains in his legs.

He agreed to go to a Cryotherapy session with his friend. He didn’t much believe that it would help his recovery, but his friend, Jim Donnelly, who was also training for a triathlon, insisted that he would feel a lot better the next day.
And Welch did.

“Normally, the next day, after a ride like that, my legs would feel like Jell-O,” Welch said. But thanks to the Cryotherapy session he felt great, he said.

Much like the tale of Victor Kiam, an entrepreneur who liked Remington shavers so much he bought the company, Welch and Donnelly, the founder of IgoUgo.com, founded Restore Cryotherapy, a consumer medical business.

Cryotherapy involves a person being put into a device, which resembles a cylindrical tank, with their head remaining outside the chamber at the top. During the Whole Body Cryotherapy session, liquid nitrogen is injected into the chamber that cools the temperature inside the chamber to well below freezing. The sessions generally last three minutes and result in a sharp decrease in overall body temperature.

Restore Cryotherapy also offers oxygen therapy, drip therapy with IV filled with vitamin solutions, Welch said.

In 2015, they opened one store in Austin and one store in Charlotte, North Carolina and the stores have done phenomenally well, Welch said. So they have decided to build out more than 100 stores in the next five years. And they have just raised a seed round of $1 million to expand the business. Most of the investors were doctors but the round also included some well-known angel investors like Gabriel Weinberg, the founder of DuckDuckGo and professional athletes like Jeff Foster.

The stores offer Whole Body Cryotherapy, IV infusion, compression therapy and hyperbaric chambers directly to consumers in a retail setting. Welch likes to say they are “the anti-doctor’s office.”

“They are fun, have quick in and out times and a cool, hip look to them,” Welch said.

Each service is tailored to reduce pain and recovery times for customers, he said.

As a founder of DreamIt, which runs the country’s largest healthcare accelerator, Welch has noticed a trend in the startups participating in the program focused on the health wellness industry.

“Consumers are taking ownership of their healthcare,” Welch said. “They are spending money in more wellness focused areas.”

Some customers buy a monthly visitors package that lets them get multiple treatments during the month, Welch said. All payments are by cash and insurance is not taken, he said. Monthly memberships costs $300 and a session runs $30, he said.

The customers include everyone from professional tennis players to a white collar worker with chronic lower back pain. Some of the back pain suffers visit the store three times a week. Some customers with Rheumatoid arthritis visit the store every day, Welch said.

“It’s hard to grasp until you’ve done it,” Welch said. But for chronic pain sufferers, this therapy offers an alternative to addictive pain relieving drugs, he said.

“This is a much lower cost process,” he said. “A huge percentage of our customers are people who are trying to do things that are more natural.”

Cryotherapy was developed in the ’70s primarily to treat professional athletes and it does not require FDA approval. And Restore Cryotherapy has licensed nurses at every location, Welch said.

Within the next 60 days, Welch and Donnelly plan to have three stores in the Austin area.

The search engine giant, Google, want to deliver packages to shoppers in Austin through its Google Express service.

Google on Wednesday launched the service, which offers overnight and two-day shopping and delivery service, in Austin and surrounding areas. It also launched the service in Oklahoma and other Texas markets including Houston and Dallas-Fort Worth. Google Express is not yet available in San Antonio.

Google Express lets Austin residents shop using their phones or computers online at stores like Costco and Whole Foods and delivers goods to their doorstep.

The on-demand delivery service competes with Amazon’s Prime one-hour delivery, Instacart and Austin-based Favor.

Google Express launched in 2013 in San Francisco and Silicon Valley. The company has greatly expanded the scope of its service. Its now available in New York, Los Angeles, Chicago, Boston, Washington, D.C. and other areas. In some markets, Google Express offers one hour delivery.

Google Express began delivering produce, meat, eggs and other perishable goods in February in San Francisco and Los Angeles, according to the Wall Street Journal.

“Our goal with Google Express is to offer a great shopping experience and connect people with their favorite stores,” Brian Elliott, general manager of Google Express, said in a news release. “Today, we’re very excited to be further expanding our efforts — making it easy for millions in Texas, Oklahoma and beyond to get things they need from stores they love — delivered fast.

The Google Express service is available with a $95 annual membership or $4.99 for each order. Google offers a free six month trial membership.

Google Express provides overnight delivery for Barnes & Noble, Costco, PetSmart, Walgreens and Whole Foods Market. Two day delivery is available for Fry’s, Guitar Center, L’Occitane, Ulta, Vitamin Shop, Moosejaw, Sur La Table, Ace Hardware, Kohl’s, Treasure Island Foods, Roadrunner Sports, Bed Bath & Beyond, buybuy Baby

One of Austin’s newest spirit companies, Milestone Brands is on a buying spree.

The company announced Wednesday its acquisition of American Born Moonshine from Windy Hill Spirits, based in Nashville. Milestone recently acquired Dulce Vida Tequila. The financial terms of the acquisition were not disclosed.

Chad Auler, co-founder of Deep Eddy Vodka,and Eric Dopkins, former CEO of Deep Eddy Vodka, founded the company in February of 2016.

“American Born Moonshine is an amazing brand that represents the incredible history of American moonshine,” Dopkins, CEO and chairman of Milestone Brands, said in a news release. “Pat Dillingham and Sean Koffel did a wonderful job bringing American Born to life in an authentic way, with quality and detail, and we are thrilled to be adding a brand to our portfolio that I truly feel will be a leader in its category.”

Dillingham and Koffel founded Windy Hill Spirits in 2013 expanded its distribution to over 25 states and doubled its sales volume over the past year. Milestone Brands plans to keep Windy Hill Spirits’ leadership team and its field sales employees.

“Pat and I are proud that the brand we are so passionate about and the team that has worked so hard alongside us will be a key part of Milestone Brands’ exciting future,” Koffel said in a news release. “Milestone Brands is poised to be a disruptive leader in the spirits industry and we look forward to working with Eric and Chad to continue building American Born Moonshine into the long-run category leader.”

Austin is a hotbed for social media marketing and the city’s biggest startup focused on the industry, Spredfast, just raised $50 million to further expand its business.

New investor Riverwood Capital led the Series F financing round. Other existing investors in the round include Austin Ventures, InterWest Partners, OpenView Venture Partners and Lead Edge Capital.

Social media outreach is an important function for every business, said Manish Mehta, Spredfast’s Chief Product Officer. Marketers are connecting with customers daily on social media site and forging stronger bonds in the process, he said.

Those social media feeds from Twitter frequently showcased in the Orange Room on the Today Show come from Spredfast.

The Austin-based startup works with some of the world’s largest media companies including NBC, the parent company of the Today Show. It also works with major sports organizations like the National Basketball Association and the National Football League.

And it doesn’t just focus on Twitter. Spredfast keeps its customers on top of all of the social media networks whether its Facebook and Twitter or Instagram and Snapchat, Mehta said.

“We have to stay on the cutting edge and provide support to every social network and every tool, not just a limited few,” he said.

The company plans to use the $50 million in funding to invest in research and development and sales, Mehta said. To date, Spredfast has raised $116 million including this round.

Spredfast operates in three major categories: direct customers in the retail, financial, services and travel industry such as Target, Brooks Brothers, Bank of America and AirBnB, indirect customers such as Whirlpool and media companies like Viacom and NBC, NBA and the NFL, Mehta said.

Although Spredfast is a privately held company, Mehta did report the company closed 2015 with $100 million in sales.

Spredfast also merged with Austin-based Mass Relevance in 2014 and last year it acquired Shoutlet. Today, the company has 500 employees, five global offices and it supports more than 650 customers. About 300 of those employees are based in Austin. The company is hiring across all part of the company, Mehta said.

Spredfast’s social media marketing platform integrates with more than 50 partners, including Actiance, Kenshoo, Google Analytics, Opal, Bitly, and all major listening tools.

Spredfast has also made some key hires lately including Eric Anderson as its Chief Revenue Officer, Melisa Fruge, Chief Legal Officer, Tim Collin, General Manager of EMEA, Leo Ryan, Vice President, EMEA.

Rocket Software, a Waltham, Mass.-based company, announced Tuesday the opening of its first office in Austin.

Rocket Software’s local office is located at The Domain in the same building as Amazon and across the street from IBM, according to a news release.

Rocket Software also recently opened offices in Japan and China. Rocket Chief Technology Officer Bryan Smith, who is based in Austin, is heading up the new office. The company has 35 employees and is hiring technical writers, technical support professionals and software developers and testers. It also recently hired nine interns for the summer including six from the University of Texas at Austin.

“We’ve had employees in Austin for over a decade, but we have all worked remotely,” Smith said in a news release. “I am excited that our team can now sit together in the same physical space because collaborating in person supports innovation in ways that email and videoconferencing just can’t. We are also looking to fill a number of positions this year, and this office will help us attract top talent in a very competitive market.”

The Rocket Software Austin office has open spaces and a “two-sided “Idea Wall,” several comfortable seating areas, a full service kitchen, a game room, and a guest refreshment area,” according to the news release.

Rocket Software, founded in 1990, it builds software and solutions for big companies like IBM.