Avnet announced Monday its plans to acquire Ascendant Technology, based in Austin.
Phoenix-based Avnet, an electronics component maker, did not disclose terms of the deal.
Ascendant Technology, an information technology consulting firm, helps businesses create ecommerce, web content management, cloud computing and other solutions. It had revenue of approximately $90 million in 2011.
Founded in 2003, Ascendant Technology has more than 500 employees. The acquisition, pending customary regulatory approval, is expected to close within 45 days.
Avnet’s stock, traded under the symbol AVT on the Nasdaq market, closed up nearly 2.5 percent at $36.83.
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A Web app firm, Bloomfire Inc. has landed $10 million in financing from Austin Ventures and Redpoint Ventures.
The Austin-based startup has created a productivity web app targeted at companies and their employees.
The product sounds like a corporate Pinterest-like application with an interactive component that allows employees to share documents, videos, pictures and charts online in real time. The application can be used as a training tool.
“Bloomfire addresses old-school productivity problems with a new-school approach, using social software to create and share valuable information within an enterprise,” Chris Pacitti, general partner at Austin Ventures said in a news statement. “It essentially allows you to clone your best sales people, reducing costs, improving productivity and accelerating new business opportunities that drive your bottom line.”
A group of seasoned entrepreneurs founded Bloomfire including CEO Craig Malloy, who founded and sold LifeSize to Logitech, CTO Dave McCann, formerly an executive at LifeSize and Chief Evangelist Josh Little, former national training manager at Stryker Instruments.
Running a technology startup takes perseverance, money, luck, talent and the ability to adapt quickly.
That’s the takeaway from Bill Boebel’s Startup Ignite talk at the Geekdom in San Antonio Friday night.
Boebel, now an angel investor and managing director of Capital Factory in Austin, gave the audience of about 60 people an overview of how he co-founded Webmail.us and later sold it to Rackspace Hosting.
In 1999, Boebel and his friends, Pat Matthews and Kevin Minnick, founded FieldParty.com, which created searchable city event directories. They dropped out of Virginia Tech University just 20 hours short of getting their degrees to work on the business full time. FieldParty.com raised $120,000 in angel money, largely from friends and family, and on March 10, 2000, the website launched – the same day the Nasdaq started crashing when the great Dot Com bubble burst.
“The world changed the day we launched,” Boebel said.
Immediately, potential investors stopped returning calls, he said. “The website was live in three cities: Blacksburg, Charlottesville and Harrisonburg, Virginia.”
That’s when the company changed names to Exedent Technologies and pivoted from searchable directories to creating content management systems for events for newspapers. The company landed 20 customers paying $50 to $100 a month.
Exedent gave away the product for free to the Virginia Tech University newspaper to serve as a reference customer for other newspapers. The problem was “the newspapers didn’t understand the Internet,” Boebel said. “They thought it was a threat to put their content online.”
So Exedent created a general-purpose content management system.
“It was a pretty cool product at the time,” Boebel said.
But Boebel, Matthews and Minnick had $100,000 in credit card debt and the company was running out of money. Exedent laid off its entire workforce except two employees who received minimum wage.
The company pivoted again into a company that would “do anything for a buck” including content management systems, webmail hosting, search engine optimization and website development.
“We would do whatever people would pay us to do,” Boebel said. “With each change we had confidence that this was the right path.”
Then, the money just about ran out and Boebel said he “thought about quitting.”
Matthews took a job selling books door to door. Minnick took a regular job to support his family. They all decided to go back to college and work crazy side jobs to keep the business afloat. They moved the offices into the basement of a townhouse.
In 2002, they got lucky. Spam and viruses started to plague people’s email inboxes on the Internet. The company started heavily promoting its secure email hosting services. Boebel, using his search engine optimization skills, secured the top keywords for “email hosting” and “webmail” on Yahoo.
“Overnight, it started to become clear that the email thing was a thing,” he said.
In yet another pivot, they added a “c” to the company’s name to create Excedent and decided to focus exclusively on email and “build the most kick ass email company.”
“We had only $1,200 in the bank and no credit to draw from and servers to pay,” Boebel said.
Its bill for Server Vault, a hosting service, cost $1,200 a month, he said.
Luckily, the company landed its first major customer and asked for a $50,000 prepayment. That along with $30,000 raised from a private investor and a $50,000 bank loan from a friend, and the company was funded, Boebel said.
They took advantage of the fact that big companies didn’t quite understand that if a company had a professional looking website that they could still be in the basement of a townhouse, Boebel said.
Also, for two years, they paid pennies for search engine keywords that led to “awesome leads” and customers, he said.
At the end of 2002, the company had $250,000 in revenue. Minnick quit his other job and went back to work for the company full time. The next year revenue doubled with 1,200 customers. They ran a lean operation, Boebel said.
“Lean wasn’t cool back then,” he said.
In 2004, they rebranded the company to Webmail.us and focused on the small business market and partnered with Rackspace as a reseller of its services. Webmail.us had more than 500 resellers. It moved its servers from Server Vault to Rackspace. They also moved the company to the Virginia Tech Research Park and switched from a Windows-based system to Linux and open systems. By the end of the year, the company had $1 million in revenue and 4,000 customers and eight employees.
At the end of 2004, the company also raised $500,000 in venture capital from local angels and Pat Condon, a founder of Rackspace.
In 2005, the company had revenue of $2 million, 13,000 customers and 25 employees. Webmail.us was the place work in Blacksburg, VA and the company got its pick of computer science graduates from Virginia Tech University.
Then in February of 2006, Google launched Gmail, Webmail.us’s first real competitive threat, Boebel said.
Despite the threat from Google, business continued to grow. By the end of 2006, Webmail.us had $4 million in revenue and 30,000 customers.
In 2007, Webmail.us was looking to raise $3 million to expand the company’s operations, but it never closed on the round, Boebel said. Instead, Rackspace acquired Webmail.us in September of 2007. That year, the company had made Inc. 500’s list of fastest growing private companies, ranking at number 217.
When Rackspace bought Webmail.us, the company had revenue of $8 million, 72,800 customers and 65 employees.
“By this point, Rackspace was our largest reseller and we were their fifth largest customer,” Boebel said. It was Rackspace’s first acquisition.
“Essentially, we had the autonomy to run the hosted email business inside Rackspace,” Boebel said. Webmail.us moved customer support to San Antonio but continued to grow the Blacksburg offices.
From 2008 to 2010, Boebel worked at Rackspace and continued to double the email hosting revenue annually. He left the company and moved to Austin two years ago.
Austin has a more developed ecosystem for startups than San Antonio, Boebel said. It’s also a great place to raise a family. He is married and has a two-year-old son.
“A lot of things are happening in San Antonio, but not a lot of things are bringing it together,” he said. He said he hoped Geekdom would change that and serve as a catalyst for San Antonio’s technology community.
Today, Boebel acts as an angel investor in several technology startups, primarily based in Austin. His investments include WP Engine, a WordPress web hosting site and InfoChimps, a data management business.
His investment criteria centers on the people behind the startup.
“I’ve just got to really like the team,” Boebel said. “I definitely look for ones where I get along with the team really well.”
At Webmail.us, the founders hired people they liked and wanted to hang out with after work. That’s the same strategy Boebel uses in his investments.
(Rackspace is a sponsor of SiliconHillsNews.com)
The U.S. Senate today passed the JOBS Act, whose acronym stands for Jumpstart Our Business Startups, which includes a crowd funding provision to allow entrepreneurs to raise money directly from small investors through crowd funding sites.
The Senate passed the bill 73-26.
Now the legislation goes back to the House, which must vote on the amended version. The house passed the bill earlier this month in its previous form.
“Crowdfunding will allow small businesses to bypass Wall Street and go straight to Main Street for financing, freeing every American to invest in a local business or the next great idea,” U.S. Senator Scott Brown, (R-MA) who sponsored the Crowdfund Act provision, said in a news statement. Colorado Senator Michael Bennet (D) and Senator Jeff Merkley (D-OR) also sponsored the bill.
“Crowdfunding is an important way to harness potential investments in small businesses and start-ups in Colorado and across the country,” Bennet said in news statement. “This amendment will help bring our securities regulations into the 21st century while driving innovation, promoting job growth and supporting small businesses in a way we have not seen before.”
The bill allows entrepreneurs to raise up to $1 million per year through a Securities and Exchange Commission crowd funding portal. The amended Senate bill requires more disclosures from companies seeking to raise crowd source funds, including financial statements.
“The House bill would allow individual investors to invest up to $10,000, or 10 percent of their annual income a year, whichever is less. The Senate bill would limit those investments to the greater of $2,000, or 5 percent of either annual income or net worth, if either figure is less than $100,000,” according to the New York Times. “Investors with annual income or net worth of more than $100,000 could invest up to $100,000 or 10 percent of annual income, the Senate amendment states.”
The legislation is already spawning new startups focused on crowd funding.
On Wednesday, CrowdFund Securities, based in Dallas, launched. It’s accepting applications from entrepreneurs and investors and plans to offer crowd funding services as soon as its legal.
“We are excited about this explosive market and the promise it holds for needed capital for hundreds of thousands of start-ups, film producers and small companies nationwide,” David Marlett, an attorney, CPA and the site’s founder, said in a news release.
Arts-focused Kickstarter, which has raised more than $200 million for all kinds of projects in the past two years, is one of the most well known crowd funding sites in the United States. It does not allow companies to seek investors on its site. But several businesses have raised funds by pre-selling products under development on the site.
IndieGoGo and RocketHub also allow people to raise from funds online.
Ok, this is a stretch for a technology blog.
But file this under what happens when old tech dies?
The Pay Phone Revival project plans to turn abandoned pay phone booths into interactive art objects. The project’s founders are seeking $5,915 on Kickstarter to complete its funding. If it meets its goal, the art installations will be on display from February through October of this year.
So far, they’ve raised $2,783 and they’ve still got 10 days to go. You can find out more about the project on Kickstarter.
Insights from SXSW Interactive 2012
View more presentations from David Crandall
The Senate is expected to vote on the Jumpstart Our Business Startups Act or JOBS Act, today.
Among other things, the bill would allow small businesses to do crowd funding (on formats like Kickstarter) or sell up to $10,000 worth of stock to individuals. It would also allow small companies to publicly advertise for investors. The bill has garnered a lot of support among tech startup companies. Angel List, a social network of startup companies and investors, has heavily promoted the bill and has garnered 5,330 signatures on a petition delivered to Senators in favor of the legislation.
The Jobs Act passed the House earlier this month.
A number of prominent investors support the legislation including Steve Case, founder of America Online, and the National Venture Capital Association.
You can watch the debate and vote via C-Span live. You can read the complete details of the bill here.
BY SUSAN LAHEY
Special Contributor to Silicon Hills News
InfoChimp's Dean Cruse, VP Marketing, Winnie Hsia, Marketing Manager, Dhruv Bansal, CSO & Co-founder, Adam Seever, VP Engineering, Holly Wood, Office Manager, Huston Hoburg, Web Engineer, Joseph Kelly, CEO & Co-founder
Dhruv Bansal and Flip Kromer, two of Infochimps’ founders, were budding research scientists, graduate students at the Center for Nonlinear Dynamics at the University of Texas Physics Department. They had no real thought of building a startup. But it did occur to them that not only they, but lots of other people, had the daunting task of looking for answers in giant sets of data—Big Data. Data sets too big to be accessed by normal computers in normal time frames. Sets that require tons of storage and processing capacity.
Bansal, for example, had a school project that required him to laboriously collect and assimilate demographic information on five million students who had taken the Texas Assessment of Knowledge and Skills.
Kromer understood Big Data not only as a scientist but as someone who held a degree in computer science.
So they suspected that the people who dealt in Big Data would rejoice if someone created a marketplace where you could find whatever chunk of Big Data you might need–like stock prices over the last 30 years or weather patterns over the last 100. They just couldn’t figure out how to monetize it.
“We didn’t perceive it to be a business project,” said Bansal. “It was just two graduate students building this service that would make our lives easier…but it was difficult to garner the resources needed to do this right. How do you get funding if you’re not planning to make money?”
Along came Joe Kelly, who responded to a Craigslist ad placed by Bansal and Kromer, seeking a developer for the physics department’s website. They didn’t hire Kelly. But he didn’t go away, either. Kelly was fascinated by chaos theory and data sets. Not a physicist, he had taken a year of business school, run a Chinese import company, an adventure travel company, and traveled around the Caribbean in a sailboat for three years. The way Bansal put it, Kelly kept bugging Bansal and Kromer, wanting to hang out with them and learn more about what they were working on. One day it dawned on them he might be just the guy to turn Infochimps from a graduate school project to a real business.
Now the guy who wasn’t quite up to par to build a website is the CEO.
Infochimps started as a data marketplace—a place you could sell all the data you compiled on coniferous plants of the Northern Hemisphere or incidences of actual injury involving slipping on a banana peel. It’s a place you could go to buy someone else’s research on geologic findings on a particular igneous rock.
In 2010, about a year after it started, Infochimps got $1.2 million in funding from venture capital firm, DFJ Mercury. This followed $375,000 in seed financing from angel investors. The company said it would use the money to increase the amount of data available to its customers. Currently it manages about 15,000 public and proprietary data sets for download and API access.
As a business model, Bansal said, that worked fine. But customers kept asking if Infochimps would help them turn their tidal waves of data into actionable information sets.
“A lot of our customers were saying ‘We already have too much data internally. We can’t handle it. We’d love to be able to take advantage of the data we have.” At first, Bansal said, they said no.
“Then we realized it was better to say ‘Yes.’ There’s immediate revenue.”
So, over the last several months, the company has been adding a whole new set of skills to its business model. It acquired Data Marketplace, a data company and Keepstream, that curated Tweet data. The second company was, Bansal said, a talent acquisition. It replaced its original CEO, attorney and co-founder Nick Ducoff, with Kelly in November 2011. When a company’s vision changes, Bansal said, everyone doesn’t see the future the same way. Ducoff and Infochimps “parted amicably” according to public reports.
And last month, Infochimps introduced its platform for helping customers use data more meaningfully. The company has developed specific tools: Ironfan for handling stack data; Wukong which simplifies Hadoop streaming; Swineherd, which runs scripts and workflows for file systems; and Wonderdog, a Hadoop interface for elastic search.
With these tools, Bansal said, and some customization, Infochimps can help companies of various sizes from multiple industries translate its Big Data into actionable information.
“Every major company I talk to is looking at ways to use Big Data technology to extract insights,” said Paul D’Arcy who is connected in the Austin Big Data community because of his role as executive director for America’s Marketing for Dell. But he’s offering his personal opinions here.
“None of them has the expertise to piece together open source technology to develop the components to do this. It takes time and investment…. Big data is one of the three or four biggest trends in technology right now and Infochimps is innovative in that they’ve built one of the first systems with all the pieces for organizations of any size to take advantage of all these technologies.”
One of Infochimp’s customers is Austin startup Black Locus, which provides pricing information on thousands or millions of products across retailers. The service helps retailers make adjustments to boost their place in the market.
Infochimps was able to speed Black Locus’s implementation of its service by months, as it does for many startups, Bansal said. Black Locus said Infochimps helps it help its customers.
“Infochimps provides us with a scalable infrastructure for dealing with the sheer quantities of data we collect and process,” said Trebor Carpenter, director of engineering for Black Locus. “This allows us the ability to focus on our core technology and algorithms. As trendy as Big Data has become, there are plenty of people claiming to be data scientists simply because they can correctly spell “hadoop.” But the Infochimps platform helps us transform a firehose of data into insight our customers can use to win in the marketplace.”
The percentage of companies that can really leverage their Big Data is tiny, Bansal said. But the number of companies that use it growing fast. Infochimps aims to help companies at all ends of the spectrum. Startups are a big target market because of Infochimps capacity to speed their process to market by months. But its prospective customer base is broad, especially with newer open stack technology that allows companies to get cloudlike technology from their computers.
“A lot of bigger companies started trying to solve their own data problems and came up with their own solutions and shot themselves in the foot,” Bansal said, referring to clients like the one that realized it was running more than 150 servers that weren’t producing anything.
Now everyone from Mom-and-Pop operations to giant corporations needs more efficient ways to pull valuable information from the giant, growing, waves of data being created through the internet, social media and other sources.
“When we first started,” Bansal said, “we had to explain what Big Data was. Now it’s everywhere.”