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UK Mission Looking for Fintech Startups in Austin and San Antonio

2015-TechIsGreat_TwitterCard_r2 (1)Officials with the United Kingdom are looking for a few good financial technology companies to go on a mission to the UK later this year.

The focus is on learning more about the growing UK fintech network and on making connections to take their business global. The UK Trade & Investment will host the mission to London from Dec. 5th to Dec. 9th.

Startups in the financial technology industry from Austin and San Antonio are encouraged to apply by Sept. 3rd. for consideration. Companies selected for the mission will be notified at the end of September.

Fintech startups in Austin include SelfLender, Peeptrade, Obsidian, Honest Dollar, Mozido and Malauzai Software. Fintech startups in San Antonio include Akimbo.

Apply online here.

Apply for IBM’s SmartCamp Pitch Competition in Austin

IBM-smart-campIBM will be kicking off its annual startup pitch competition called SmartCamp next month.

This year, IBM is collaborating with Jason Calacanis and his organization Launch Media.

The Austin competition will take place at Capital Factory on Sept. 16th. Finalists from Austin and other cities around the world will travel to San Francisco to attend the SCALE Conference in October and meet with key Silicon Valley investors.

The competition takes place in 30 cities. Ten finalists will proceed to the next round, three of which will be selected to pitch at LAUNCH Festival in February of 2016. The IBM Global Entrepreneur of the Year will be offered a spot in Jason Calacanis’ 3-month LAUNCH Incubator and receive a $25,000 prize.

Startups interested in participating can sign up here. Registration closes Sept. 2nd. To participate, startups must have a minimum viable product, be less than five years old and have less than $1 million in revenue.

Lyft Returns Ridesharing to San Antonio

photo courtesy of Lyft

photo courtesy of Lyft

Lyft, the ridesharing startup, is coming back to San Antonio.

Following three hours of discussion, the City Council of San Antonio on Thursday voted six to five in favor of a nine-month pilot agreement with Lyft.

It’s been a bumpy ride so far for ridesharing companies operating in San Antonio. Lyft originally launched in March of 2014. Uber launched shortly after that. Then in December the City announced a set of new regulations for the ridesharing companies, also known as Transportation Network Companies.

In March, Lyft and Uber threatened to move out of the city because of the new regulations, which required costly background checks for drivers, car inspections and more. They made good on that promise and ceased operations.

Now Lyft is back. It must pay the city $18,750 to operate for nine months. Its drivers also have the option of getting a 10-fingerprint FBI background check, but it is not required. Also, Lyft will include a picture and profile of its drivers on its app for customers.

April Mims, a spokeswoman with Lyft, told the city council the ridesharing company already does extensive background checks on its drivers and only 21 percent of applicants get accepted as Lyft drivers.

Lyft already provides GPS tracking, share your route tracking for customers, $1 million in commercial insurance and a two way rating system for all of its drivers, Mims said.

Lyft has riding sharing agreements already with 26 state legislatures and dozens of cities, Mims said.

Opponents of the agreement showed a video of a nationwide compilation of cases of Uber drivers allegedly accused of rape, sexual assault and kidnapping.

Several cab drivers also spoke to the council to oppose the agreement saying the agreement created an unfair playing field for the ridesharing companies that didn’t have to comply with the same regulations as cab companies. They also expressed concerns about safety.

Members of Techbloc, a new technology advocacy group in San Antonio, told city council ridesharing reduces drunk driving and provides more transportation options to citizens and it’s an option that helps attract and retain a tech-savvy workforce.

Cybersecurity Firm root9b Expands to San Antonio

Photo licensed from iStockphoto.com

Photo licensed from iStockphoto.com

root9B announced this week it is opening a new office this fall in downtown San Antonio.

The Colorado Springs, Colorado-based company provides advanced cybersecurity services and training to private businesses and government agencies. Its new office will be located in the Tower Life building downtown.

The company was ranked 45th on the Cybersecurity 500, a list of the hottest cybersecurity companies to watch in 2015.

“We believe San Antonio is a thriving entrepreneurial community where our company can add to the dynamic energy of one of America’s fastest growing cities,” Eric Hipkins, root9B Chief Executive Officer, said in a news release.

“root9B’s expansion will bring numerous technology jobs to San Antonio. This is a perfect example of the new economy, where a community’s economic growth and vitality is built around talented people and innovation,” Nelson Wolff, Bexar County Judge, said in a news statement. “The arrival of companies like root9B will be less visible than a new manufacturing plant or biomedical facility, but the economic impact will be just as profound.”

Already, more than 80 companies in the cybersecurity industry have offices in San Antonio, which is also home to the National Security Agency/Central Security Service Texas, 24th and 25th Air Force Commands and other military cybersecurity operations, according to the San Antonio Economic Development Foundation.

Galvanize to Open New Campus in Austin

Galvanize classroom, courtesy photo

Galvanize classroom, courtesy photo

Galvanize, a tech school and coworking space, announced this week it is opening its seventh campus in Austin.

The Denver-based company leased 25,000 square feet in a building in the 2nd Street District in the North Shore development. It will feature classrooms, private suites, open work areas and event areas. The campus will be able to run up to five simultaneous software development or data courses. The space can accommodate more than 250 members.

The Galvanize campus is expected to open in the Spring of 2016.

The Galvanize campus plans to provide people with the skills necessary to land a job as a web developer, data scientist or data engineer in Austin. Already, Galvanize has taught hundreds of people who have landed those types of jobs within six months of graduation, according to the company.

“Austin is already a top city for startups and larger tech companies. We’re excited about being part of this vibrant community and bringing our education platform to the region to meet the growing demand for
software developers and data scientists,” Lawrence Mandes, Co­founder of Galvanize, said in a news release.

Galvanize already has campuses in San Francisco, Seattle and Colorado. Galvanize, founded in 2012, has raised $21.1 million in two rounds from one investor: University Venture Fund, according to its CrunchBase profile.

Galvanize Ventures, an incubator that does seed and early stage investments, has invested $1 million in Testilio and $535,000 in Self Lender, both Techstars graduates based in Austin, according to its CrunchBase listing.

People Pattern Hires Former Facebook Executive Doug Wolfe

Doug Wolfe, COO People Pattern. courtesy photo

Doug Wolfe, COO People Pattern. courtesy photo

People Pattern announced recently it has appointed Doug Wolfe as its Chief Operating Officer.

Wolfe, previously served as head of operations for Atlas at Facebook. He has a lot of experience in marketing technology and digital media.

As COO, Wolfe will oversee People Pattern’s product, sales, finance, partnership, recruitment and marketing.

“People Pattern is taking off as marketers look for new ways to find and activate customers,” Ken Cho, co-founder and CEO of People Pattern, said in a news release. “His operating experience, character and process-driven approach will further elevate our business, helping scale our technology and custom solutions to a global client base. Our evolution is taking place in days not years, and we are thrilled to welcome him to the team.”

Wolfe joins Cho and People Pattern co-founder and University of Texas computational linguistics professor Jason Baldridge in creating a new marketing paradigm centered in Audience Insight, public identity and data science. The company reports its revenue has quadrupled in the last year with customers like McDonald’s, Campbell’s, HP, Cisco, Planned Parenthood and Pernod Ricard.

“More than 90% of marketers say they don’t know enough about their audience,” Wolfe said in a news release. “I decided to join People Pattern because I wanted to be part of an innovative company based in Austin, and it fit my criteria for the type of company I want to be part of: a smart and fun team, products that create real value in a big market and a need for the kind of operating leadership I can provide. People Pattern has all of that, with incredible early clients who are re-thinking the way they market. It’s an opportunity that I couldn’t pass up.”

Wolfe started his career in the U.S. military, serving as a Captain in the United States Marine Corps (veteran of Operation Iraqi Freedom) and assistant professor of Naval Sciences at Northwestern University before joining Morgan Stanley as an associate. He holds an MBA from Kellogg School of Management at Northwestern University.

Silicon Hills News did this profile of People Pattern earlier this year.

Austin Wins “StartUp in a Day” SBA Competition

Photo licensed from iStockphoto.com

Photo licensed from iStockphoto.com

Everyone who has ever run a small business can tell you there is a lot of red tape and bureaucracy to deal with to get the venture off the ground.

Now the City of Austin is aiming to make the process as simple as possible. This month, the U.S. Small Business Administration announced Austin as one of 28 winners in the first StartUp in a Day competition.

The program is designed to take the pain out of registering for permits and licenses on a local level and drastically reduce the time it takes to set up a business in Austin.

“The City of Austin continues to provide great assistance to small businesses in their local neighborhoods,” Yolanda Olivarez, SBA Region VI Administrator, said in a news release. “I am extremely proud of the leadership within this city, who continues to strive for more economic growth and job creation by supporting our small businesses,”

The City of Austin will receive $50,000 to support the development, implementation, and improvement of online tools that let entrepreneurs learn about the business startup process.

UT Spinout Capsenta Helps Healthcare Companies Harness Data

iStock_000045124042_LargeBy HOJUN CHOI
Special Contributor to Silicon Hills News

Anyone familiar with the University of Texas at Austin is no stranger to the words “what happens here changes the world.”

To Capsenta, a spin out smart data startup from a UT computer science lab, that motto is more than just a rallying call to donors and fans of the university.

The company, which officially launched in July, seeks to change the way companies around the world mines databases for information. It offers a data translation and integration software allowing its customers to combine and analyze relational databases in a faster and more economic and efficient way.

Traditionally, when combining relational databases for analysis, businesses complete a three-step process involving extracting data from current locations, transforming the data so it is consistent and searchable and loading the data into a newly created warehouse or repository. David Arnold, Capsenta’s co-founder and CEO, said the tedious process, known as ETL, is costly and time consuming.

Capsenta’s patented technology replaces this process, using an application called Ultrawrap, software developed at UT’s Miranker Laboratory.

“There was a need to bring forward these tools, which whole industries were built on, to better weave and integrate with a new world of data,” Arnold said.

Juan Sequeda, who completed his Ph.D in computer science in May, developed the platform under the mentorship of Daniel P. Miranker, the lab’s namesake.

“The process of integrating databases could be done manually, but these were processes that turned out to be inefficient and vulnerable to human error,” Sequeda said.

Another weakness of the traditional process, Sequeda said, was not all relational databases were built to be easily combined with one another.

imgres-2Using their collective knowledge and experience with what is referred to as “semantic web” technology, Sequeda and Miranker designed software to “wrap” around database warehouses from multiple sources so it can be analyzed and cross referenced without being moved.

What brings these databases together, Sequeda said, is a layer of “semantic” technology filling gaps between existing relational databases, which allows Ultrawrap to address specific queries companies may have.

Ultrawrap not only streamlines data integration through its automated process, it also saves users time and money by not requiring them to repeat the ETL process every time a specific question needs to be answered.

Miranker, who is listed as a co-founder of the company along with Sequeda and Arnold, had a hand in smoothing out the licensing process with the university, which owns equity in the company. He said Arnold and Darren Selsky joined the company in 2014 after first serving as advisors to the project at the Austin Technology Incubator.

“The Austin Technology Incubator was largely responsible for the matchmaking with our business team,” Miranker said.

Arnold and Selsky both have backgrounds with close ties to health information and technology. Selsky, who has spent his entire career in the health IT industry, said his work with information connectivity within hospital systems has helped him recognize Ultrawrap’s applicability in the healthcare industry.

“Data that big companies have always been stored, but aren’t necessarily available in a form can be shared and used to increase the quality of care,” Selsky said.

MedAxiom, an information resource and service provider for cardiology organizations, began using the startup’s data integration platform in April. Ryan Graver, president of MedAxiom Ventures, is responsible for creating relationships between its members and other industry segments, such as health IT, medical device and pharmaceutical companies.

“Consistently, we hear that ‘actionable intelligence’ is really probably the biggest area in which we see a gap in the industry,” Graver said. “A lot of that gap stems from the technologies we currently have and don’t have to unlock the data that is already out there.”

Actionable intelligence, in the world of big data, lets companies and organizations know whether or not they should make changes based on the copious amount of information in their data warehouses.

Medicine doctor working computer interfaceHe said MedAxiom, which serves 320 organizations and more than 6,000 physicians in the cardiovascular health industry, provides a hub for sharing and benchmarking data to help these healthcare providers evaluate and improve upon their performance.

Though the company has used more traditional methods to combine and analyze large databases for more than a decade, Graver said the Ultrawrap solution helps create a marketplace in which these organizations and physicians can gain access to this knowledge in a more efficient way.

“We can use Capsenta’s technology to better pinpoint patients who have certain health conditions and ensure these patients are receiving the proper care,” Graver said.

The majority of the startup’s customers have been related to the health industry, many of which are in the medical device business. The software has, however, proved to be functional in other realms, such as legal and transportation.

“You try not to get distracted with going too broad too fast because it dilutes your focus and it dilutes your ability to build great examples of what your technology can do within a vertical market,” Arnold said.

Arnold said the startup, with seven employees, is preparing to raise additional funds. It has already raised about $750,000 in seed stage financing, Arnold said.

Because the company’s business model does not require a large customer service team, Arnold said it looks to add to its sales and marketing team, largely to expand into other markets in and outside the healthcare industry.

Targeted Technology Funds San Antonio Life Sciences Startups

By LAURA LOREK
Reporter with Silicon Hills News

Paul Castella, cofounder and senior managing partner of Targeted Technology, courtesy photo

Paul Castella, cofounder and senior managing partner of Targeted Technology, courtesy photo

Entrepreneurs in the life sciences industry in San Antonio for years complained about the lack of venture capital.

In 2008, Paul Castella and Alan Dean, cofounders and senior managing partners of Targeted Technology, a venture capital firm based in San Antonio, decided to do something about that.

“The quality of innovation we have here in San Antonio is really meaningful,” Castella said.

To help fund ideas, Castella and Dean created the first $11.2 million Targeted Technology Fund and invested in 12 companies. Since then, four of those companies have been sold. Its first investment, Vidacare sold to Teleflex for $262.5 million in 2013. Early investors made 4.2 times a return on their investment, Dean said.

ENTrigue Surgical sold to ArthroCare for $42 million in 2013. More recently, in June, an Australian company, TFS Corp. bought ViroXis Corp. and Santalis Pharmaceuticals for a combined cash and stock deal initially worth $45.3 million.

“It was a very small fund,” Castella said. “We started it during the financial meltdown of 2008. We had our first close in 2009. We ended up with 12 companies in that portfolio and we’ve sold a third of them. All of the other investments are viable and potentially exit able.”

Alan Dean, cofounder and senior managing partner of Targeted Technology

Alan Dean, cofounder and senior managing partner of Targeted Technology

Targeted Technology also has investments in Birmingham, Alabama, because Dean moved there in 2006 to serve as managing partner of Greer Capital Advisors, a venture capital fund. He now splits his time between his two houses in San Antonio and Birmingham.

“It gives us a bigger geographic reach and both communities have a lot of activity in this area and they are underserved by venture funds,” Dean said.

Previously, Dean served as director of technology transfer at the University of Texas Health Science Center at San Antonio. Castella shared office space with Dean at the university where Castella worked on his startup, CardioSpectra, founded in 2005. He served as co-founder and president. The company sold in 2007 to Volcano Corp. for $63 million.

Both Castella and Dean have extensive experience in the biotechnology and medical technology industry. They play “a critical role in growing and nurturing our local innovation ecosystem,” said Ann Stevens, president of BioMed SA.

“The founders are life science entrepreneurs themselves and understand firsthand how the scarcity of local venture funding and the necessity for San Antonio entrepreneurs to raise money elsewhere was holding our life science sector back,” Stevens said.

Photo licensed from iStockphotos.com

Photo licensed from iStockphotos.com

In 2014, Targeted Technology launched its second fund with $42 million in venture capital. Many of the same investors from the first fund also participated in the second one, Dean said. It has made investments in nine companies so far and a few more currently undergoing due diligence that the company declined to disclose.

“We could certainly spend a lot more money than we have,” Castella said. “The second fund is $42 million and it’s all accounted for now. It only took us two years to spend $42 million. We could easily spend double that.”

Recently, Targeted Technology worked to attract German-based Cytocentrics Bioscience’s international headquarters to San Antonio. The company makes a medical device called a CytoPatch Machine. Its patch clamping technology evaluates drug interactions with human cells and analyzes data. The company has pledged to create 300 jobs and invest $15 million locally in the next eight years.

“The importance of Targeted Technology to the local ecosystem cannot be overstated,” Stevens said.

Targeted Technology invested in biotech serial entrepreneur Fred Dinger’s latest venture, Aerin Medical, an ear, nose and throat device company. The company is in the process of moving from California to Austin, where Dinger lives.

“Obviously we’re very keen on investing with Fred,” Castella said.

Dinger founded Osteobiologics, which sold to Smith and Nephew, then C2M Medical, which sold to Tornier and ENTrigue Surgical, which sold to ArthoCare.

Gabriele Niederauer, an executive who has worked with Dinger on a number of his startups, now serves as CEO of Bluegrass Vascular Technologies, another company in Targeted Technology’s portfolio, which moved from Kentucky to San Antonio.

“That’s what happens when you have a critical mass of biotech and life science companies – people move to another company,” Castella said. “A company gets bought and you still have trained skilled people and they tend to gravitate to entrepreneurial activities. “

Targeted Technology plans a third fund in a few years.

“Our next fund we would like it to be much larger because the opportunities are here and they’re growing,” Dean said.

“It creates its own momentum,” Castella said. “We support ideas that originate here. But truthfully most of what we’ve done is bring ideas in. That’s a function of having a venture fund this stage, which is fairly rare. A small amount of money can attract in significant opportunities.”

Targeted Technology has brought companies in from Kentucky, Canada, California, Ohio, Houston, Birmingham and Australia.

“If you have a team that’s capable of working deals and has a focus not just on investing but all of the ancillary functions necessary to support a company it’s a good mechanism for attracting opportunities,” Castella said.

Photo licensed from iStockphotos

Photo licensed from iStockphotos

Targeted Technology’s longest investment is in Bio2 Medical, creators of the Angel Catheter to protect critically ill patients from Pulmonary Embolism. Its average investment is about five years, Castella said.

“A lot of the companies we invest in have very significant technology in the sense that they have the potential to radically improve healthcare,” Castella said. “Vidacare was a life saving device that changed EMS. Bio2 is a device that will have a huge impact on hospital patient outcomes. Bluegrass is focused on vein access and Cytocentrics will open up a whole new avenue of drug research.”

Even though Targeted Technology is in South Texas the area is not shortchanged for transformational technologies, Castella said.

“In San Antonio, it’s been more of an organic, grinding path to get things going,” Dean said. “But it starts building on itself.”

Targeted Technology is also working to create a biotech accelerator and incubator in San Antonio. Birmingham has Innovation Depot, founded eight years ago, which has more than 100 companies today, Dean said.

“San Antonio could benefit from a similar program,” Castella said. “We are willing to work to help develop one of those here.”

A group from San Antonio visited the Innovation Depot in Birmingham recently to learn from the activity there.

Targeted Technology, with eight employees, has eight companies working out of its office in the Stone Oak area. They are all fund investments and they are focused on changing the world, Dean said.

“We want to make money for our investors but we really, really appreciate that we’re in the space where we save lives or improve lives with our technology,” Dean said. “This is more than just a job.”

Invictus Medical Sells a Device to Help Newborn Babies

By LAURA LOREK
Reporter with Silicon Hills News

Tom Roberts, Invictus Medical’s President and CEO

Tom Roberts, Invictus Medical’s President and CEO

Invictus Medical is a homegrown San Antonio biomedical startup focused on improving the lives of newborns.

In 2010, Daniel Mendez, Israel Cruz and Nicholas Flores, all engineering undergraduates at the University of Texas at San Antonio, invented a device, initially called the aqua bonnet, during an engineering senior design class. One of the engineer’s wives worked as a nurse in a Neonatal Intensive Care Unit and explained the problem about babies developing cranial deformities because of all the pressure on their heads.

So the students developed a soft helmet-like medical device to relieve pressure and help prevent flat-head syndrome in newborn babies. They won the UTSA CITE entrepreneurship and technology competition in 2010.

The students decided to assign their invention to UTSA, which filed the initial patent application. In 2011, the students formed a company and the university licensed the technology to the company and provided further funding for the patent process. For providing those services, the university took an undisclosed equity stake in the venture, said Jackie Michel, director of technology transfer and commercialization at UTSA.

“This turned out to be one invention that makes my heart happy because it fulfills the mission of the university which is to disseminate knowledge for the benefit of society,” Michel said. “It’s a remarkable story.”

In May, Invictus Medical received Food and Drug Administration clearance to begin marketing its medical device, now known as the GELShield, which provides extracranial pressure relief for babies. Invictus is now selling the GELShield to hospitals nationwide. The device, which comes in small, medium and large sizes, focuses on relieving pressure on baby’s heads. That pressure can cause plagiocephaly, a cranial deformity exhibited in infants resulting from repeated external pressure to one area of the head. The condition can result in a baby having a misshaped or flat head. In addition to cosmetic issues, studies have linked the condition to development delays in infants and toddlers.

Already, more than 100 hospitals have expressed interest in the GELShield, said Tom Roberts, Invictus Medical’s President and CEO. The market is large for the device, he said. Nationwide, hospitals run about 1,200 Neonatal Intensive Care Units. Invictus is also working on an application to expand international sales to Canada and eventually Europe.

“In the United States every year there are four million babies born and about 20 percent to 30 percent of all babies develop some kind of cranial deformity,” Roberts said. “It can appear along a spectrum from a flat spot to a more pronounced cranial deformation.”

The problem affects one million infants annually, Roberts said. It’s the problem Invictus Medical’s GELShield helps to solve.

The Baylor University Medical Center in Dallas just completed a validation study using the device in its neonatal intensive care unit with 42 babies. The test began in February of 2014 and finished in the fall of 2014.

“We evaluated the product for safety, fit and function,” said Chrysty Sturdivant, advanced clinical specialist and lead of the study at Baylor University Medical Center in Dallas.

“We wanted to make sure it didn’t cause any other problems like skin irritation or temperature changes or something unknown,” she said. And they found it did not cause any problems, she said.

Right now, nurses in Neonatal Intensive Care Units manually rotate the babies in their care every three to four hours. In the past, they’ve used pillows and other aids to prop the baby’s head. With the GELShield, the device provides the cushioning and relieves pressure to the baby’s head to help prevent deformities.

Newborn at Baylor Medical wearing one of Invictus Medical's GELShield devices, courtesy photo

Newborn at Baylor Medical wearing one of Invictus Medical’s GELShield devices, courtesy photo

The Invictus GELShield eases the care for the baby because the nurses don’t have to fiddle with pillows any longer to make sure they are positioned correctly under the baby’s head, Sturdivant said.

“Now it’s easy to tell,” she said. “The medical device is either on or off the baby’s head.”

Before the Invictus GELShield, the market did not provide a device like this to help babies with this problem, she said.

“Our product relieves the amount of pressure being applied on the baby’s head by up to 85 percent,” Roberts said.

The GELShield still allows the baby to continue to move his or her head, Roberts said.

To date, Invictus Medical has raised $5 million and is in the process of securing an additional $4.5 million in Series B funding. That money will go to help market and sell the GELShield.

Roberts joined the company early on in 2011. He spent 30 years working for companies in the medical device industry including for Roche Diagnostics and Kinetic Concepts. He wanted to run a startup. Randy Goldsmith, head of the Texas Technology Development Center, known as T3DC, introduced him to Invictus Medical, which is in the T3DC incubator program.

“I was looking for something I could be very passionate about,” Roberts said. “I had an immediate connection with Invictus.”

Invictus, which means unconquerable in Latin, is a tribute to the young engineering students who started the whole thing, Roberts said. The students are no longer involved in the day-to-day operations of the company but remain shareholders in the venture.

Invictus now has 12 employees and it has outgrown its current space at 12500 Network Drive and is planning to move to larger headquarters soon, Roberts said. The company plans to add a few employees this year but expects its workforce to expand to 25 employees by 2018. It contracts with four separate manufacturing plants to make its GELShield devices.

Invictus has five distribution partnerships with 55 sales people nationwide, Roberts said.

But Invictus is not stopping with the GELShield product.

“We’re building a world class medical company,” Roberts said. “We’re not a one product company.”

Invictus_Logo_TagInvictus recently secured the worldwide commercialization rights from Northern Illinois University in Dekalb, Illinois for a second innovative technology focused on active noise reduction in the neonatal intensive care units. The company received a Phase I grant from the National Science Foundation for $240,000 to research and development the technology. It is also eligible to apply for a Phase II grant worth $750,000. George Hutchinson, Invictus’ Chief Technology Officer, is heading up the research, Roberts said.

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