A year ago, Anna Pobletts and Cole Hecht hatched the idea for Passage, a passwordless authentication service for a website that uses biometrics.

They were both working at an Austin-based cybersecurity company when they decided to launch their own venture. This week, Passage emerged from stealth operations and launched its beta, and announced $4 million in seed-stage funding led by LiveOak Venture Partners with participation from Next Coast Ventures, Tau Ventures, Secure Octane, and various angel investors.

Today, everything online requires a password from airline reservations to banking applications, subscription services, and retail shopping sites.

The problem is consumers often use the same password across multiple sites and that increases their vulnerability to hackers.

The cybercrime problem is huge and growing. Cybersecurity Ventures expects global cybercrime costs to grow by 15 percent per year over the next five years, reaching $10.5 trillion U.S. dollars annually by 2025, up from $3 trillion in 2015.

“We want the Internet to be safer,” said Hecht, Passage’s Co-Founder and Chief Executive Officer.

Passage’s solution relies on biometrics, face, and fingerprint authentication to access websites online, Hecht said.

“It’s a unique time,” Hecht said. Today, more and more people are familiar with biometrics because they have smartphones and computers that rely on facial recognition or fingerprints to access the devices.

“We have great biometric devices in our pockets,” he said. Passage has created an application that allows web developers to build that technology into websites. Passage allows users to log in to web applications with Face ID, Touch ID, Windows Hello, and other biometrics built into their devices.

Compared with other forms of user authentication, biometrics offer improved security and a smoother login experience for users, said Pobletts, Passage’s Co-Founder and Chief Technology Officer.

For example, a lot of consumers will abandon an online shopping cart when they go to check out because they forgot their password. Passage’s system allows for easy authentication through biometrics and allows businesses to reduce cart abandonment, user churn, and password-related support costs, Pobletts said. Biometrics also eliminates phishing and account takeover attacks and reduces the risks of a breach when businesses store and manage passwords, she said.

With the new financing, Passage plans to introduce its application to more developers, and it also plans to hire more employees, Hecht said. The company has 5 full-time employees, and they work out of an office at WeWork University Park.

“Consumers are getting really comfortable using biometrics on mobile devices,” Hecht said. The biometric identification only exists on the smartphone or laptop the person is using to access the website.

“It is only tied to the device,” Hecht said.

Passage allows developers with a few lines of code to enable their users to register and log in to websites with only their face or fingerprint, Hecht said.

“Passage is poised to change the fundamental way we interact with the Web,” Creighton Hicks, Partner, LiveOak Venture Partners, said in a news release. “Imagine a world where you seamlessly signup, login, and checkout online – no matter which device you’re on, without having to remember or lookup your password.”

Passage is excited to lead the way for developers wanting to implement better authentication for their users, Pobletts said.

In the next few years, biometric authentication will become commonplace online, Hecht said.

“Passage makes biometric passwordless authentication accessible to all developers and makes the open-source standard WebAuthn easy to integrate in any environment,”  Chris Aniszczyk, CTO, Linux Foundation, said in a statement. “Improving security practices should be top of mind for everyone and I highly encourage all developers to support passwordless authentication in their applications.”

Cart.com announced on Thursday that it has raised $240 million in new equity and debt funding.

With the new funding, Cart.com plans to roll out its eCommerce platform for online brands internationally. The company has raised $380 million to date.

Legacy Knight Capital Partners, the growth equity arm of Legacy Knight Multifamily Office, led the equity round with participation from Citi Ventures, Visa, and other Fortune 100 brands. J.P. Morgan and TriplePoint Capital provided the venture debt financing.

In December, Cart.com moved from Houston to Austin. The company reports its revenues have grown 400 percent last year and it now has more than 850 employees. Founded in September of 2020, Cart.com makes eCommerce software and provides services to scale businesses online. Cart.com reports processing more than $3 billion in gross merchandise value over the last 12 months.

“With this new funding, we’re poised to continue our strategy of acquiring top providers from across the eCommerce value chain, while staying hyper-focused on meeting the evolving needs of the brands we serve,” Omair Tariq, CEO of Cart.com, said in a news release.

Cart.com has recently acquired FB Flurry, fulfillment and customer care provider, and SellerActive, a leading provider of software as a service eCommerce tools. The two acquisitions bolster Cart.com’s support of merchants nationally.

“Citi Ventures is excited about the future of commerce and we were particularly impressed by how quickly and seamlessly Cart built a comprehensive platform to power e-commerce. Omair’s industry expertise and M&A playbook have enabled the company to rapidly identify targets, execute acquisitions, and fully integrate new partners into Cart’s unified platform. Citi Ventures looks forward to supporting the Cart team on its continued expansion,”  Luis Valdich, Managing Director at Citi Ventures.

“The Cart.com team is building a platform that can help sellers of all sizes grow faster as the future of commerce becomes increasingly digital,” Rubail Birwadker, Senior Vice President of Global Digital Partnerships at Visa said in a news release.

“What Omair and the team at Cart.com have accomplished in the last 14 months is nothing short of remarkable. They have proven they have the ability to rapidly execute on their vision of building the first fully end-to-end eCommerce platform at a massive scale,” David Sawyer, Chief Operating Officer and Managing Partner of Legacy Knight said in a news release.

Austin has become a world-renowned place to launch new brands and consumer packaged goods.

And a big reason is that Whole Foods is based in Austin and H-E-B is based in San Antonio.

Central Texas is an incubator for new products and one of the accelerators behind scaling those products is SKU, which this week announced its 10 cohort of startups since it launched in 2011.

SKU picked six companies to participate in its 12-week accelerator program. SKU also announced it also selected six startups to participate in its first Atlanta program. They are Beyond The Equator, Holmes Applesauce, Mocktail Club, NoBull Burger, Pulp Hot Sauce, and UP TO GOOD Energy.

The Austin 2022 SKU Companies are: (descriptions provided by SKU)

Happy Moose: Happy Moose Juice, founded by Ryan Armistead, crafts the juices and functional wellness shots from upcycled, heirloom produce sourced directly from the fields of independent, family farms.  

Mesa de Vida: Founded by personal chef Kirsten Helle Sandoval, Mesa de Vida offers chef-crafted, multi-tasking meal starters and salt-free seasoning blends to easily transform simple ingredients into a healthy gourmet meal. 

Raeka Beauty: Raeka Beauty was founded by Raeka Panda to bring New Generation Ayurvedic South Asian ingredients to the forefront. The company continues its mission of making Ayurveda-based beauty products more affordable and accessible through its efforts. 

Rollin’ and Bowlin’: Founded by Austin Patry and Sophia Karbowski, Rollin’ n Bowlin’ is a plant-based snack brand that is focused on simplicity, health, and convenience. 

Tend: Tend, the world’s first real-food prenatal bar, provide an all-natural, delicious alternative to prenatal vitamins. Created by Behzad and Hannah Varamini, the bars are made using 25 nutrients from fruits, vegetables, nuts, and seeds.

Yips Yogurt Chips: Co-founded by Erin Vranas – Head Yipster – Yips are the first chips made from real probiotic Greek yogurt, available in flavors like Almond Butter Banana and Superberry Chocolate.

Meet Austin’s newest unicorn: SparkCognition, an artificial intelligence software solutions startup.

The company announced it has closed on $123 million in a Series D funding round. The funding round gives the company a valuation of $1.4 billion. To date, the company has raised $300 million in funding.

SparkCognition plans to use the funding for sales and marketing, research and development and to facilitate growth.

The round was represented by new and existing investors, including March Capital, Doha Venture Capital, B. Riley Venture Capital, AEI Horizon X, Temasek, Alan Howard, and Peter Löscher.

 SparkCognition’s customers are in a wide range of industries including oil and gas, renewables, manufacturing, financial services, transportation, and government.

“Our AI solutions address core infrastructure challenges, including asset optimization, preventing zero-day cyberattacks, augmenting skill gaps, and enabling climate change initiatives,” Amir Husain, Founder, and CEO of SparkCognition, said in a news release. “This additional capital will enable us to deepen our subject matter expertise, enhance our patent portfolio, and accelerate the diversity of problems we solve for customers, maximizing their return on investment.”

SparkCognition reported revenue increasing 90 percent in 2021 compared to 2020 and bookings increasing five times. It also reported its intellectual property portfolio grew by 75 percent.

In addition, SparkCognition completed three acquisitions in 2021. It expanded further into financial services, maritime, and renewable energy markets.

The company also opened its HyperWerx facility, a 50-acre showcase for artificial intelligence, Internet of Things, robotics and autonomous drone technology, and Industry 4.0.

“SparkCognition understands the value of using technology to solve the world’s most critical problems,” Peter Löscher, former CEO of Siemens, said in a news release. “They have an amazing track record of delivering world-class AI solutions that empower organizations to run a more sustainable, safe, and profitable business.”

Tim Heyl, founder of Homeward, drew inspiration to become an entrepreneur from his father.

His dad was fired for moonlighting around the time Tim was born. His dad launched a book-on-tape kiosk rental business that became a video store. When his employer found out they fired him. Tim’s dad went on to create a chain of ten video stores which he sold to Blockbuster in the early ‘90s.

His dad used money from selling his video business to start Heyl Homes, a luxury home builder. Today, Heyl Homes is one of the largest custom home builders in Austin.

“I grew up thinking I would go work for my dad,” Heyl said. “But I think what rubbed off on me more than homebuilding and even real estate was that entrepreneurial bug.”

Heyl watched his dad go through major highs and lows. His dad builds luxury spec homes and when the economy is up, things are great but when the housing market goes in the tank, life gets tough, Heyl said.

“I think having a parent who is an entrepreneur you sort of grow up with an expectation that it’s Ok to work for yourself or take risks or not have a stable income,” Heyl said. “All of those things that seem so odd to people seem a little more normal to me having seen it.”

During high school and college, Heyl always had a job, but he never really liked his job. He was bored and frustrated, and he wanted to do something he was passionate about. When he graduated from college in 2009 with a finance degree, he interviewed at 30 banks. But it was right after the 2008 financial and housing crisis, and Heyl couldn’t get a job.

“I was living in my parent’s basement,” Heyl said. “I couldn’t afford to put gas in my car. I used up my savings trying to figure out how to get a job.”

That’s when he decided to get his real estate license. And he read Gary Keller’s book “The Millionaire Real Estate Agent.” Heyl fell in love with entrepreneurialism and the book taught him how to build a business. He realized he could be a real estate agent and a business owner.

Initially, Heyl struggled because he didn’t know what he was doing. But after about a year, he figured it out and he never looked back.

“I was hoping my dad would hire me to work at his company, and he told me I needed to go work somewhere else for a couple of years, which is the best thing he could have done because it really forced me to go spread my wings and figure this thing out,” Heyl said. “And I fell in love and never turned around.”

In 2009, Austin’s housing market was floundering, and homes took about 185 days to sell, Heyl said.  Despite the challenging market, Heyl figured out how to build his business. And in 2012, at 24, he became Austin’s number one real estate agent.

With the commissions from his home sales, Heyl hired full-time salaried employees and created The Heyl Group, a real estate team with listing specialists, showing agents, marketers, transaction managers, and more.

At The Heyl Group, he created other businesses including a title company, home insurance agency, a real estate coaching and training business and a company focused on lead generation.

 “The real estate industry is filled with small business owners,” Heyl said. “They are incredibly motivated and passionate, but a lot of them lack the systems to turn that into a business.”

That’s where Heyl saw opportunities.

“But the challenge was these businesses that I created, while it was a cash flowing machine, I hadn’t solved any problems uniquely in the homebuying transaction,” Heyl said.

When he turned 30 Heyl did a lot of journaling and through that experience, he came up with the idea for Homeward. He also realized that he wanted to make a bigger impact on the world. He saw a real opportunity to make the home buying experience more modern and as enjoyable and seamless as Netflix.

That spawned Heyl’s brainchild: Homeward which solves a problem he encountered as a real estate agent. Homebuyers couldn’t buy a new home until they sold their old home. Homeward allows its customers to make all-cash offers to secure their next home before selling their existing home. The Homeward Cash Offer eliminates the financing, home sale, and appraisal contingencies.

The company filled an unmet need in the market and has grown quickly as a result. Homeward had 20 employees in 2020 and today it has 400. The company expects to hire another 300 employees this year, Heyl said.

Homeward also had the largest funding round of 2021 landing $371 million, including $136 million in equity and $235 million debt. The company has used the funds to move into new markets. It’s now in Texas, Colorado, Georgia, Arizona, and it plans to expand further into Florida, California, Washington, Oregon this year, Heyl said.

The pandemic hasn’t slowed its operations. When it hit, Homeward shut down its office and it’s never gone back. It is a fully remote company, and it will remain that way, Heyl said.

Heyl has three kids under the age of seven and working from home allowed him to see them and his wife more often. He also wasn’t stuck in traffic during a commute.

“I started to see all these benefits,” Heyl said. “Everybody has got a life. You work to live. You don’t live to work.”

Working remotely forces people to get better at things they weren’t good at before, Heyl said.

And as the recovery from the Pandemic continues, Homeward isn’t slowing down.

“The next five years are going to completely transform what we’ve known about how to buy a home,” Heyl said. “We’re doing it in a new fun way.”

South by Southwest’s Pitch Competition showcases some of the world’s most innovative companies.

SXSW this week announced the 45 finalists in nine categories featuring four Austin-based startups. The Austin-based startups are Mod Tech Labs in the artificial intelligence, robotics, and voice category, Nephrodite in the health, wearables, and well-being category, Kiro in the smart cities, transportation and logistics category, and Pinwheel in the social and cultural category.

The 14th annual SXSW Pitch Competition will take place at the Hilton Austin Downtown on Saturday, March 12, and Sunday, March 13 before a live audience and a panel of judges.

“From 2009-2021, 572 companies have participated in SXSW Pitch, with over 82% receiving funding and acquisitions in excess of $14.5 billion,” according to SXSW.

The following are the descriptions of the four Austin-based SXSW Pitch finalists.

Mod Tech Labs
Austin, TX

MOD helps creative agencies digitize the real-world with AI-powered capture and 3D software workflows for enhanced retail marketing and monetization. Transforming photos and videos into 3D digital content faster with a no-code automated SaaS platform. Enabling 3D visuals of products, people, and worlds across devices and interactive content needs.

Nephrodite
Austin, TX

Nephrodite is developing HollyTM, a combined implantable and wearable device that represents a change in the way End-Stage Renal Disease and dialysis care is delivered. Our device will offer mobility and independence to patients enjoying freedom to do as they choose with their time.

Kiro Action
Austin, TX

Kiro Action, a modern refuge that is deployed in 4-hours by 4 people with no special machinery or heavy equipment built to the code of commercial and home applications. The same product can be a backyard office, yoga studio, flex room and shelter the unhoused. Scalable, flat-packed, cost effective and dignified housing.

Pinwheel
Austin, TX

Pinwheel’s philosophy is that we let kids be kids when their exploratory spirits are cultivated as creators rather than consumers.

Radical Girl Gang, an Austin-e-commerce marketplace for women-owned brands, is shutting down after failing to raise funding.

Most recently, Radical Girl Gang launched a $350,000 crowdfunding campaign on the Republic platform.

The Austin Business Journal first wrote about Radical Girl Gang’s shutdown.

“It pains me to share that after two incredible years spearheading the movement to shop women-owned, Radical Girl Gang is officially closing on January 31st, 2022,” Bre Cruickshank, the company’s founder, wrote on a LinkedIn post.

“As you may know, I started this business as a solopreneur with $0 in the bank, bootstrapping year one and proudly growing by 12X. I set out to fundraise in 2021 as venture capital funding to women-owned businesses simultaneously dropped to a five-year low of just 2.2%,” Cruichshank wrote. “For the last year, that’s what I’ve been going up against as a young, female, first-time founder building a women-centric business.”

Radical Girl Gang raised $16,550 from 55 investors of a $350,000 round on Republic before shutting down the fundraising campaign on Dec. 10^th.

Radical Girl Gang launched in November of 2019 and reports that it supported more than 100 emerging women-owned brands nationwide, half of which were founded by women of color.

“We’ve championed the LGBTQ+ community, raised thousands for nonprofits, and directed nearly $200K towards women-owned businesses,” Cruickshank wrote.  “All by voting with our dollars.”

Radical Girl Gang had four employees and had raised an angel round of investment in December of 2020, according to its Pitchbook profile.

Austin-based Geothermix received a $2.5 million grant from the U.S. Department of Energy to establish new geothermal energy and heat production from abandoned oil and gas wells.

The company is among four projects selected by the U.S. Department of Energy to receive a total of $8.4 million.

The Department of Energy’s focus is to partner with existing well owners and operators to use their idle or unproductive wells to access geothermal energy. It’s part of the Biden-Harris Administration’s goal of a carbon-free grid by 2035.

It’s also supporting the creation of clean energy jobs and helping to transition some of the oil and gas workforce to the production of renewable energy.

“With this initiative approach, we can transform existing fossil fuel wells into productive sources of sustainable, clean geothermal energy,” Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman said in a news release. “These efforts will demonstrate how to leverage our existing oil and gas workforce and infrastructure, bringing more geothermal energy online and transitioning our energy workforce into the growing clean energy economy.”

Geothermix is founded by Kirk Nuzum, a geologist in the oil and gas industry, and Mukul Sharma, a professor and chair in the department of petroleum and geosystems engineering at the University of Texas at Austin.

Geothermix plans to conduct a field demonstration of a novel method to generate electricity from fluids produced at existing oil and gas facilities. Its goal is for thermoelectric generators using low-quality heat, that is currently wasted, to produce electricity with a near-zero carbon footprint.

“The successful development and implementation of this technology could have a transformational impact on the energy recovery rate in oil and gas installations,” according to the project proposal.

The Department of Energy also gave grants to ICE Thermal Harvesting of Houston, Transitional Energy of Aurora, Colorado and the University of Oklahoma at Norman.

The program is part of the Wells of Opportunity initiative, funded by the Geothermal Technologies Office, that launched in 2020 and focuses on bringing geothermal online using existing infrastructure to lower costs and reduce development timelines. It funded three projects in 2021.

Infocyte, a cybersecurity software company started in San Antonio by two U.S. Air Force veterans, has been acquired by Datto Holding Corp.

Datto, a cybersecurity and data backup company based in Norwalk, Connecticut, did not disclose the purchase price.

Infocyte, founded in San Antonio in 2013, moved to Austin in 2018. Chris Gerritz and Ryan Morris co-founded Infocyte. They both formerly worked as officers in the U.S. Air Force on Security Hill at Lackland Air Force Based in San Antonio in cyber security roles.

Infocyte created software that detects and responds to cyberthreats. The company’s patented technologies continuously collect and correlate data from endpoints to identify potential threats. Security professionals monitor the network to respond to cyberthreats.

“Infocyte’s offerings are complementary to Datto RMM Ransomware Detection and SaaS Defense application security products in those same NIST stages,” Tim Weller, CEO of Datto, said in a news release.

“We look forward to joining Datto and to further securing the SMBs and other clients served by its vast network of MSPs around the world,” Curtis Hutcheson, CEO of Infocyte, said in a news release. “Securing endpoints from advanced threats continues to be a top challenge for SMBs. With Datto’s partner community and growing security portfolio, we will be able to dramatically expand our reach to millions of endpoints under management, enabling Datto’s partners to provide their SMB customers with leading detection and response technologies.“

Prior to its acquisition by Datto, Infocyte had raised $12.7 million in venture capital from LiveOak Venture Partners, Toba Capital, and other private investors.