Galvanize has been bought by K12, a publicly traded learning company based in Herndon, Va., for $165 million in cash.
The
deal, which closed on Monday, includes Galvanize’s campus in downtown Austin in
the Northshore building at Second and Nueces and seven other campuses across
the country.
In the deal, K12 gets Denver-based Galvanize’s management, brand recognition, network of alumni, Galvanize campuses and programs in data science and software development, said Nate Davis, Chief Executive Officer and Chairman of K12’s Board of Directors, during the company’s earnings call Monday afternoon.
K12
expects Galvanize to contribute $50 million in revenue this year, Davis said. K12
had more than $1 billion in revenue in 2019.
K12,
founded 20 years ago, serves more than 13,000 students nationwide through
K12-powered Destinations Career Academies, which combine traditional high
school academics with career technical education. With the acquisition of
Galvanize, K12 extends its education platform to adult learners.
Galvanize, founded in 2012, had raised $167.5 million over nine rounds of funding. The company has more than 1,500 employees and thousands of alumni have graduated from its data science and web development programs.
The leadership team will be staying – all the way from the CEO, down to each campus’ employees, said Harsh Patel, Chief Executive Officer of Galvanize.
” We plan on expanding our Military Education programs in Austin in particular as a result of this acquisition, and to expand our Data Science programs there,” he said.
Otherwise, the Galvanize campus in downtown Austin will continue to operate business as usual.
Galvanize’s other campuses are in Boulder, Denver, New York, Phoenix, San Francisco, and Seattle. In addition to its in-person campuses, Galvanize offers full-time and part-time immersive online boot camps.
In
2018, Galvanize bought San Francisco-based Hack Reactor, making it one of the
largest coding programs in the country.
“I am proud to join K12 in our shared goal to bridge the gap between industry demands and education. Together, we will prepare more learners to thrive in the modern digital economy,” Patel said in a news release. “The K12 team believes in Galvanize’s mission to teach industry-relevant skills and lifelong learning techniques. I’m looking forward to continuing our work to make people’s lives better and to make education more accessible and more affordable.”
K12, a for-profit education company that sells online schooling and curricula, said the acquisition of Galvanize positions it as a “premier provider of career readiness education services and a leader in skills training, technology staffing and developing talent and capabilities for Fortune 500 companies.”
There
is a shortage of qualified tech workers nationwide and K12’s acquisition of
Galvanize will help fill those roles. There’s a huge demand for workers to fill
data science jobs in New York, San Francisco, Los Angeles and other tech hubs.
About 85 percent of Galvanize’s graduates are employed with
average salaries of $90,000, within six months of graduating from its programs.
Galvanize’s graduates have gone on to work for 2,250 companies including
Amazon, Facebook, Google, and Apple. Galvanize has also partnered with Fortune
500 companies like IBM, McKesson and Cognizant to upskill their current workforce.
Galvanize also partners with the U.S. military to help train soldiers in
software engineering and serves as a preferred provider of the U.S. Department
of Veterans Affairs’ VET TEC program.
Austin had another outstanding year with startup activity overall on the rise.
And VC funding in Austin reached levels the city hasn’t seen since the Dot Com boom of 2000.
In 2019, Austin-based private companies raised $1.7 billion, up almost 28 percent from 2018, another record year, according to the latest MoneyTree Report from PwC and CB Insights. And Texas startups overall attracted $3 billion in VC investment last year.
A few trends Silicon Hills News has detected in Austin in recent years include a rise in real estate tech companies, a cluster of insure tech companies, new space startups, and more female-founded startups.
The city is also a hotbed of activity in artificial intelligence, machine learning, and big data space.
And more and more startups continue to
move to Austin from California. That is a trend that isn’t going to slow down anytime
soon.
What it does: It has created gun-detection software. It usesexisting security cameras coupled with its specialized software that relies on machine learning and artificial intelligence to identify guns in a public setting.
Why it’s hot: Unfortunately, gun violence is a part of American life now. “The United States has the 28th-highest rate of deaths from gun violence in the world: 4.43 deaths per 100,000 people in 2017,” according to NPR. Athena’s technology helps manage that problem and might be able to prevent violent acts from occurring.
What it does: It is a construction finance company. It provides timely loans at an affordable price to subcontractors in the commercial construction industry.
Why it’s hot: It combines two hot markets: fintech and construction. The commercial and residential construction industries in the U.S. are growing. “The Construction sector has performed well over the five years to 2019, exhibiting a strong turnaround overall,” according to IBISWorld.
What it does: data.world is like GitHub, the world’s
largest software development platform, but it’s an open platform focused on
data sets.
Why it’s hot: The world is awash in data and tools like data.world are helping companies, organizations, and people make sense of these massive data sets and extract valuable insights from them. IDC forecastsworldwide revenues for big data and business analytics to reach $189.1 billion in 2019, an increase of 12.0% over 2018. It expects revenue will be $274.3 billion by 2022.
What it does: It builds robots. Its first product is a hospital assistant named Moxi.
Why it’s hot: Robotics is a hot market and getting hotter. “The global market for robots is expected to grow at a compound annual growth rate (CAGR) of around 26 percent to reach just under 210 billion U.S. dollars by 2025,” according to Statista. “It is predicted that this market will hit the 100 billion U.S. dollar mark in 2020.”
Tom Markusic, CEO and Founder of Firefly Aerospace, photo by Errich Petersen
What it does: Based in Cedar Park, Firefly Aerospace
is developing launch vehicles and spaceships. It also landed a contract with
NASA in November of 2018 to provide lunar payload services.
Why it’s hot: New space is a huge and growing industry. The Space Industry is valued at $350 billion currently and Bank of America Merrill Lynch project that to reach $2.7 trillion by 2040, according to a CNBC news report.”
Funding: Provides homeowners with financing to make all-cash offers on a new home and the homeowner works with their listing agent to sell the home. If they can’t sell it within 6 months, Homeward will buy the home at pre-agreed upon price.
What it does: It’s looking to solve the problem for homeowners that want to move into a new house but can’t do so until they sell their old house. Homeward allows them to move on and not take a discounted price on their old house.
Why it’s hot: The IT market in real estate was valued at $5.49 billion in 2018 and it is expected to reach $10.79 billion by 2024, according to a MarketWatch report. “IT is becoming a driving force necessitating a change in the way real estate companies market products to their clients. The shift from physical records to digital-based records and documents has been the initial steppingstone for the adoption of technology in the real estate sector.”
What it does: Imandra has created algorithms that
ensure a company complies with regulations and is secure. It first applied its
technology to the financial services industry but has since expanded into other
industries.
Why it’s hot: Imandra’s software platform has applications for autonomous vehicles, robotics, and machine learning. Those are some of the fastest-growing technology categories.
What it does: It created a banking platform for self-employed workers.
Why it’s hot: Intuit, the owner of Turbo Tax software, says gig workers make up 34 percent of the workforce and that is projected to grow to 43 percent this year. That’s a lot of independent workers in need of tools. The company, founded in 2017, moved its headquarters from Denver to Austin last year.
The team behind Kronologic, photo by Errich Petersen
What it does: It automates a person’s calendar with its specialized software that uses AI, machine learning and bots to automatically schedule meetings for sales professionals.
Why it’s hot: The global artificial intelligence market is expected to hit $390.9 billion by 2025, according to Grand View Research. It is growing at a compounded annual growth rate of 46.2 percent from 2019 to 2025. In the last year, Kronologic has landed clients like Dell, Insight, Thomson Reuters, CDW, WP Engine, Big Commerce, Outbound Engine and Holt Caterpillar.
What it does: It offers on the spot coverage with
instant approval for injury insurance through its online platform. It
pays up to $20,000 of medical expense reimbursement for each covered accident.
Why it’s hot: As people age, they are staying active longer and continuing to ski, bike, run and do other sports. But some of those activities can be risky. Life by Spot provides on the spot insurance coverage to many weekend warriors participating in a 5K, 10K, Half-marathon, Marathon, Triathlon or other races.
What it does: Literati is a subscription-based
children’s book club aimed at children from birth to 12-years-old. Literati
charges $9.95 a month for a curated box of five books.
Why it’s hot: Busy parents are looking for a way to connect with their children away from computers and screens and books allow for that connection. Literati shops for them. They are able to get a curated book collection and connect to a large community of book lovers.
David Rubin and John Berkowitz, co-founders of OJO Labs
What it does: OJO has created a free assistant that handles queries from homebuyers about whether a house has a swimming pool, a view of downtown, a large kitchen, a large lot, school district, etc. The OJO assistant then sends the homebuyer texts of potential homes with photos and listings. It learns what the person likes and what the person doesn’t like through the interaction. When the person is ready to buy, it refers them to a human agent to handle the home buying experience.
Why it’s hot: “The combined value of
every residential home in the United States was $33.6 trillion at the end of
2019, up 3.4% ($1.1 trillion) from a year ago and 51% ($11.3 trillion) from the
start of the decade,” according to Zillow. And it’s only going up, up, up.
Technology companies like OJO make the real estate market operate more
efficiently.
What it does: The company created an artificial
intelligence-powered app, AskMia, to make sure a doctor’s schedule stays full
and that patients don’t miss appointments.
Why it’s hot: Missed appointments is a $150 billion problem in the U.S. and is costing healthcare providers wasted time and money.
Arlo Gilbert and Scott Hertel, Co-Founders of Osano
What it does: Osano,founded in 2018, is focused on helping companies, particularly mid-sized enterprise companies, comply with privacy laws. It has created an online data privacy platform that companies subscribe to on a monthly basis and keeps them in compliance with GDPR and other privacy laws like the California law.
Why it’s hot: Data protection is a $125 billion industry, according to Arlo Gilbert, Osano’s Co-Founder and CEO. And Berkeley Economic Advising and Research predict companies will spend $55 billion over the next two years just to get compliant with California’s new privacy law that went into effect Jan. 1st.
What it does: It created a peer to peer marketplace to rent recreational vehicles.
Why it’s hot: The RV market is huge and it’s growing. The RV market was valued at $36 billion in 2017 and “is expected to continue to draw in more growth from the tourism sector in the coming years,” according to a MarketWatch report. “Recreational vehicle (RVs) are quickly becoming the crucial aspect of a majority of recreational and camping activities for quite a massive percentage of the global populace.”
What it does: Paradromics has created an implantable device for the brain or a “modem for the brain.” Paradromics’ device is currently in preclinical development. It expects to enter human clinical trials in 2021 or 2022,
Why it’s hot: Paradromics’ technology could
potentially help with treating diseases like ALS which is a progressive
neurodegenerative disease or addiction, and related mental illness disrupting a
massive $100 billion pharmaceutical industry.
What it does: PreFix provides homeowners with a
dedicated Home Manager to fix most things for a low monthly co-payment. The
service includes seasonal preventive maintenance on all appliances and systems.
Why it’s hot: Purchasing a home is a huge expense. Keeping that home in tip-top shape is also expensive. And just like people take their car in for regular maintenance, a home requires regular maintenance. That’s where PreFix comes in. It provides seasonal preventive maintenance on all appliances and systems. Homeowners don’t have to wait until something breaks to give it the attention it deserves. PreFix can save them time and money and inconvenience.
What it does: Rex has created a digital platform to allow homeowners to list, find and buy homes outside MLS.com.
Why it’s hot: The housing market is hot and is expected to continue to grow, according to the National Association of Realtors but there is a shortage of supply as not as many houses have been built following the housing and financial crisis of 2008. And applying technology to the homebuying process is one of the hottest trends in tech right now.
What it does: It created an online marketplace for services and labor for the energy industry.
Why it’s hot: RigUp’s platform matches contract
workers with energy companies. In 2019, the company expected to exceed $2
billion in volume, up 200 percent from a year ago, on its platform.
RigUp is Austin’s latest Unicorn, meaning its market value is projected to be
worth more than $1 billion.
Will Young and Nathan Hackley, Co-Founders of Sana Benefits, courtesy photo
What it does: The company offers premium health benefits for small and medium-sized businesses at 30 percent lower costs than traditional options, according to Will Young, its CEO, and Cofounder.
Why it’s hot: The healthcare industry in the United States is ripe for disruption. The U.S. spends more on healthcare per capita than most countries because of wasteful spending that costs roughly $1 trillion every year in waste, Young said.
What it does: Slingshot is
manufacturing the next generation of satellite, aerial and drone signal
processing with artificial intelligence and analytics capabilities.
Why it’s hot: Slingshot is part of the New Space industry. That industry is expected to increase from $385 billion in 2019 to at least $.15 trillion by 2040.
Techson IP Team: Tom Hochstatter, Davis Hochstatter and Luke Barbin.
What it does: Intellectual property researchers that created its proprietary Limestone patent and technical research platform.
Why it’s hot: Investments in legal tech have risen dramatically in the past two years, according to Forbes. AI and machine learning and automated processes are making the legal industry more efficient and faster. And patents in the U.S. are also on the rise. Last year, the U.S. issued 370,434 patents, up 9 percent from 339,512 in 2018. And “IP-intensive industries accounted for $6.6 trillion in value-added in 2014, up more than $1.5 trillion (30 percent) from $5.06 trillion in 2010,” according to the latest U.S. government 2016 report on IP and U.S. Economy.
Janice Omadeke, CEO and Founder of The Mentor Method, photo by Errich Petersen
Funding: $100,000 Capital Factory prize and
$25,000 MassChallenge Texas award winner.
What it does: It has created a program to increase employee retention and diversity in the workplace. Mentor mentee matching for diversity and inclusion.
Why it’s hot: Companies are spending $16 billion each
year in efforts to keep diverse talent and it’s still not working, according to
Janice Omadeke, The Mentor Method Founder and CEO. And numerous studies have
shown that diverse workforces outperform ones that are not diverse.
What it does: It provides leadership training to companies through a subscription-based model.
Why it’s hot: The Leadership training market is estimated to be worth $366 billion globally, according to TrainingIndustry.com, quoted in a recent Forbes article. That article also detailed the market in the U.S. is worth $166 billion and it’s on the rise.
What it does: It has createdan online platform to help small businesses incorporate and stay compliant with regulators.
Why it’s hot: Small businesses are the backbone of the U.S. economy and contribute the most to its job growth. Small businesses need tools like Zen Business to make complicated parts of running a business easier.
Correction: This article has been updated to explain the role Homeward plays in the home selling process.
Locale, a hospitality startup that rents upscale apartments for short and long stays, recently announced that it has received $11 million in venture capital funding.
The Austin-based company,
founded in 2016, has raised $14 million to date.
Amplo Ventures led the
Series A round of investment with participation from Susa Ventures, Malkin
Holdings, Rogue Insight Capital and Metropolis Capital Partners.
Locale transforms apartments into hotel rooms for business, leisure and extended stay travelers. The company operates in Austin, Houston, Dallas, San Francisco, Nashville, and Minneapolis. Locale has partnered with multifamily groups like Greystar, The Dinerstein Companies, and AMLI on multiple projects across the country.
Locale, which has 20 employees, has seen its revenue grow 200 percent year over year, according to a news release. The company plans to use the funding to invest in “digital product innovation, enhanced in-room offerings, and executive-level hiring,” according to a news release. It also plans to expand operations in Denver, Nashville and Charleston.
“We first decided to back Locale when we
realized how thoughtful they are in building the next generation of
accommodations for travelers,” Sheel Tyle, founder and CEO of Amplo, said in a
news release. “We are now increasing our commitment to Locale as it continues
to redefine the short-term rental category by introducing a premium apartment
hotel brand centered around quality in-room products, intentional design, local
curation and most importantly, a superior hospitality-driven experience.”
Nitesh Gandhi founded
Locale after spending many years in the hotel and vacation rental industry.
“This year has been an exciting one of expansion for Locale—from the number of cities which we are located to the number of guests we’ve served,” Gandhi said in a news release. “It’s been an important stepping stone in achieving our ambition to create the leading modern apartment hotel brand. This latest round of funding, together with our invaluable real estate and brand partnerships, will help Locale’s continued growth, which includes a number of full-building deals currently in development that will allow travelers to experience Locale’s artfully curated approach to hospitality in a complete environment.”
Firefly’s rocket and stand following the fire show minimal damage, according to the company, photo by Firefly Aerospace
At Firefly Aerospace’s 200-acre testing and manufacturing facility in Briggs, Texas, a fire broke out when the company tested the first stage of its rocket last week.
The fire occurred at 6:23 p.m. on Wednesday when the rocket’s four engines were fired “a small fire broke out in the engine bay at the base of the rocket’s stage,” according to Firefly.
“The
5-second test was immediately aborted, and the test facility’s fire suppression
system extinguished the fire,” according to Firefly. “The cause of the anomaly
is under investigation.”
Firefly’s test engineers were conducting a planned test of the first stage of the company’s “Alpha” launch vehicle. The test was to be the first in a series of propulsion tests to verify the design and operation of the stage and involved a short, 5-second firing of the stage’s four engines.
Yesterday evening we attempted to hotfire test the Alpha first stage for the first time. Unfortunately, after the four Reaver engines ignited, an engine bay fire developed (flame jet to the left in video). The system immediately shut itself down and the fire was quickly pic.twitter.com/YGYcEshrd9
“Firefly
engineers are reviewing test data from the stage to identify potential causes
for the test failure, and Firefly will share results of that investigation once
it is complete,” according to the company. “Firefly is committed to workplace
safety, and at no time during the test were Firefly operations personnel or the
public in danger. Firefly is coordinating closely with local authorities and
emergency response personnel as it investigates the anomaly and refines its
contingency procedures.”
It
was the first time Firefly tested this stage of the rocket, Tom Markusic, Firefly
CEO and Founder, said during an interview with KXAN television station.
Firefly Aerospace is building rockets on a stretch of land about an hour northwest of Austin in Burnet County. The company set up its production and testing facility there about five years. It has successfully completed several tests of its rocket engines in the past.
This is the first time anything went wrong that caused the test to shut down and the fire suppression system to kick in, according to Firefly.
In his interview with KXAN, Markusic explained that it’s not uncommon for problems to occur when testing rocket engines. In this case, one of the engines experienced a fuel leak and the projection of the fuel caused a fireball which then signaled for the test shut down and the fire suppression system to kick in.
Minimal damage occurred to Firefly’s first stage of the rocket in the incident, according to the company.
Firefly’s Alpha rocket is expected to launch from the Vandenberg Air Force Base in California in June, said Eric Salwan, Firefly’s director of commercial business development.
Firefly Aerospace’s facility in Briggs is in a remote stretch of former ranchland in the town of Briggs with a population of fewer than 300 people. The footprint of the test site has quickly grown as Firefly has added additional buildings on its design site to build different stages of the rocket and to house more workers. In one building, a team creates the launchpad for the rocket launch, in another adjacent building, a team works on various stages of the rocket and rocket engines and a third building houses the rocket cone and other parts.
The
testing pad for the rocket engines is a short drive from the design facility.
Firefly’s launch vehicles service the small-to-medium-sized satellite market. Its Alpha rocket will deliver payloads to low earth orbit and its larger Beta launch vehicle will deliver larger payloads to low earth orbit and payloads to Geostationary Transfer Orbit.
When fully assembled, Firefly’s two-stage Alpha rocket will
be about 95 feet tall and will weigh 119,049 pounds. The first stage is powered
by four engines affixed to its base. The second stage of the rocket is what
delivers the payload to orbit. “It features a pump-fed, bell nozzle engine.”
Firefly Aerospace
also landed a contract with NASA in November of 2018 to provide lunar payload
services.
Austin-based data.world had its best year ever in 2019, said Brett Hurt, CEO, and Co-Founder.
“2019 will go down in history as the year data.world found enterprise product-market fit and revenue has taken off in a big way,” Hurt said.
data.world is like GitHub, the world’s largest software development platform, but it’s an open platform focused on data sets. It has built a collaborative data resource that is used by researchers, journalists, universities, companies, and others. It also mirrors the U.S. and U.K.’s open data portals, data.gov and data.gov.uk.
And last year, data.world launched its enterprise-grade
software as a service data catalog.
That product took off after data.world bought Capsenta, which was founded at the University of Texas at Austin in 2015. Capsenta brought its data integration software, Ultrawrap and its real-time collaborative, knowledge graph schema modeling tool Gra.fo to data.world. And Juan Sequeda Ph.D. joined data.world as a principal data scientist.
“It was a huge breakout year for us on the enterprise side
with fortune 500 companies,” Hurt said.
Tens of thousands of companies are using data.world for
their own internal private data community and to collaborate around, Hurt said.
data.world also integrates with data programs like Tableau and Snowflake, he
said. And two-thirds of the integrations have been built by the companies
connecting these open data sets to their tools, Hurt said.
data.world team photo, courtesy photo
data.world also announced Tuesday that the company has successfully received recertification as a B Corporation by B Lab. A B Corp is a for-profit business that is certified by the nonprofit B Lab. It means the company voluntarily meets higher standards of transparency, accountability, and performance.
data.world has been a B-Corp since it
launched in 2016. It is one of only 17 Austin-based
Certified B Corporations and was named a “Best for the World” honoree in the governance
category by B Lab in 2017, 2018, and 2019.
data.world is bringing together people globally to
collaborate on data sets addressing some of the world’s biggest problems
including poverty, nutrition, and climate change, Hurt said.
“We’ve become the world’s largest collaborative data
catalog and community,” Hurt said.
Since data.world became a B Corp other technology companies have followed. Osano, a data privacy company that is part of the Hurt Family Investments, launched as a B Corp. And another one of Hurt’s portfolio companies is in the process of converting from a limited liability company to a B Corp., Hurt said.
“That’s one neat thing that has happened,” Hurt said. “We’ve
become a bit of an example – it’s a much more soulful and better way of being.”
“The world is becoming a place where people care about intentionality and business and why not build that into the business from the beginning,” Hurt said.
And data.world’s general counsel testified in the
Texas House for the passage of the public benefit corporation law. In 2017, Texas
was the 37th state to adopt the B-Corp law.
“You never know where good intentionality is going to
take you – it’s been a decision we’ve made since the beginning of the company
that has unintended consequences,” Hurt said.
For example, the government of Mozambique is using data.world’s
platform to share open data sets, Hurt said.
“I have a call every week with some large organization
like the new data science institute at the University of California at San
Diego – they are trying to put something like what we do out in the world and
they are looking for a platform like ours,” Hurt said. “I know that because we
are a B Corp that has led to a lot of those partnerships. It’s led to this
beautiful place where a lot of people proactively reach out to us because we’re
a B Corp.”
Being a B Corp. has also helped with recruiting, Hurt
said. Millennials and Generation Z really care about the purpose of a company,
Hurt said. data.world has 60 employees based in Austin.
data.world is Hurt’s sixth company as an entrepreneur.
It is scaling rapidly and even faster than Bazaarvoice, his last company, he
said. The company has raised $44.7 million to date.
“It took two and half years of enterprise selling to get to that kind of global agreement at Bazaarvoice – at data.world, it has taken less than one,” Hurt said.
data.world has signed one of the largest insurance companies
in the U.S. as a customer, Hurt said. It also signed its first global agreement
with one of the largest companies in the world where any of its brands can come
on board, he said.
During the last three days, data.world has been rolling out to over 30,000 people worldwide at one of its enterprise customers, Hurt said. The companies don’t want their names publicized because data.world gives them a proprietary advantage, he said.
Lanham Napier, co-founder of BuildGroup and Jessica Ewing, co-founder of Literati
Jessica Ewing, co-founder, and CEO of Literati called the founding of her company the summer of the pivot.
She pitched so many different versions to investors including Etsy for authors, a curated enterprise book service for businesses, the first data-driven publishing house and others.
“You name it, I pitched it,” Ewing said. “It just kept
getting crazier, crazier and crazier.”
Investors were not interested in books at that time, Ewing
said.
“I might as well have popped into these meetings with a horse and buggy,” she said.
Ewing talked about her entrepreneurial journey with Lanham Napier, co-founder of BuildGroup, last Thursday at BuildGroup’s conference held at the Hotel Van Zandt in downtown Austin.
Ewing eventually decided to focus on children’s books. She founded Austin-based Literati in 2016 with Kelly Carroll. Literati is a subscription-based children’s book club aimed at children from birth to 12-years-old. Literati charges $9.95 a month for a curated box of five books. Parents have seven days to return the books they don’t want in a pre-paid envelope and they pay retail prices for the ones they want to keep.
In October of 2019, Literati received $12 million in Series
A funding.
Ewing, a native of Michigan, comes from a long line of
entrepreneurs. Her father and grandfather were both entrepreneurs. She went to
Stanford University where she studied mathematics and artificial intelligence
and when she graduated, she joined Google. She became a senior product manager.
In her mid-20s, she found herself in a bit of a dilemma.
“I was climbing a ladder, but against the wrong wall,”
she said. “I just had a deep sense of unease that I was in the wrong city, in
the wrong job, about to marry the wrong person.”
“It looks so good on paper, all of it, and my parents
were so proud, but it just felt all wrong,” she said.
She decided she needed to change.
“The journey of entrepreneurship really begins when
you are willing to break from the pack,” Ewing said.
Her first step on her entrepreneurial journey began
when a friend at Google encouraged her to do an outdoor survival course. She
signed up to do a 28-day course with the Boulder Outdoor Survival School, Ewing
said. That experience gave her a tremendous amount of courage. It took her a
year and a half, but she quit her job at Google to become a writer.
“I spent five years trying my hand at writing a novel,”
Ewing said.
Life seems like a series of odd coincidences, but
often when you look back at your life’s trajectory, there is an arch that
suddenly starts to emerge kind of like a very well written novel, Ewing said.
That’s where Literati started, Ewing said.
When Ewing finished her novel, she entered the world
of literary agents and publishing houses. She had to write handwritten letters
to contact them. She thought there had to be a better way to organize the world
of publishing through technology. She felt motivated to build something. The first
version of the platform was to connect writers with publishers and agents, and
it was called Excerpt, Ewing said. She put a lot of time, energy and her own
money into creating it. Ewing built it from Austin because her brother lived here,
and she moved to Austin to write her novel.
Ewing went to Silicon Valley to try to raise money for
her venture.
“It was just a bloodbath,” she said.
She thought her background would attract investors. But
very quickly she got shut down so fast.
“I didn’t understand the size and scale of what Sequoia would want to back,” she said. Sequoia, based in Menlo Park, is an early-stage venture capital company that has backed Apple, Google, Oracle, PayPal, YouTube, Instagram, and others.
Every day, she woke up and pitched her startup. She
had a team at that point counting on her. She got so much feedback that she
learned from every rejection and all the advice.
“It was so many no’s, but it was so many helpful tips,
tricks, intros,” she said. “My definition of a great investor is not someone
who writes me a check but someone who leaves me a little bit better off from
having known them.”
Napier asked Ewing for tips for entrepreneurs looking
to raise money.
The number one tip is you must be resilient, Ewing said.
“You have to be willing to change and grow,” Ewing
said. “I wasn’t used to rejection before I started raising capital.”
“It’s really tough on your ego and it starts to sow
seeds of doubt on yourself and your business,” she said.
Entrepreneurs must know what problem they are trying
to solve, and they must really, really want it, Ewing said.
“You have to get used to the idea of rejection and
reframe success,” Ewing said. “And you also have to try not to take it so
personally.”
Literati is starting in kids’ books with plans to move
into other areas as well, Ewing said. Literati is built around its community of
people who love books, she said.
“It’s about being part of a community that is trying
to raise your child in a world that has become very transactional,” she said. Literati
is not going to compete with Amazon, it’s creating value in a different way,
she said.
Literati wants to help parents raise a generation of readers who grow up with print books. It provides an analog experience that is an alternative to computer and mobile phone screens, Ewing said.
“I really, really believe we need to build technology that serves life and not a life that serves technology,” she said. “I still believe that books are these magic objects that carry a lot of value in the world.”
Ian Rickey, Chief Technology Officer of BuildGroup Data Systems and Open.Exchange and Jim Curry, Co-Founder of BuildGroup
BuildGroup, an Austin-based venture capital firm founded in 2015 which raised a $330 million fund, launched an analytics platform for investors and startup founders last week.
It’s called Open.Exchange focused on matching investors with the best startups, and vice versa, said Jim Curry, head of BuildGroup Data Services.
“We built it for ourselves, but it was still a closed
system benefiting only us,” Curry said. “And we believe open is better than
closed.”
Open.Exchange officially launched its beta program last
Thursday at BuildGroup’s first conference held at the Hotel Van Zandt in downtown
Austin. About 300 people attended the event which featured a series of talks on
business models, Open.Exchange, big tech in Austin and spotlighted Literati and
Yonder, two Austin-based startups.
Former Rackspace Chief Executive Officer Lanham
Napier founded BuildGroup along with Curry, and Klee Kleber, former Chief
Marketing Officer at Rackspace and WP Engine. Its portfolio companies include Anaconda,
Fiix, Vidmob and Yonder.
Curry is heading up Open.Exchange along with Ian
Rickey.
About a decade ago, Rackspace started a project called OpenStack, an open-source cloud software. Curry, a former senior vice president of strategy and corporate development at Rackspace and co-founder of OpenStack, wants to bring the open-source movement to investing with Open.Exchange.
“We wanted to take these lessons and apply them to
private capital markets today,” Curry said.
Finding information on private companies is hard
unless you have access to it in a fundraising process, Curry said. Venture Capital
firms do not share information with one another. VC firms often receive
thousands of pitches a year, and only invest in a handful of companies. Startup
founders seeking funding often go into a black hole with little or no feedback
on why they got an interview or not.
“Market operations are opaque,” he said.
There are no standard rules on how to operate in this
marketplace, Curry said.
“In the private market there are lot of people who
want to participate,” he said.
Open.Exchange gives them the platform to do so.
“It’s a data-driven, transparent, collaborative community,” Curry said.
The goal is to be frictionless and to match up capital
with companies as quickly as possible, he said.
“If you do that well, you drive liquidity way up,” he
said. “If you do that, you drive cost down for every single participant.”
Curry and Rickey demonstrated the platform at the
event showing the deal flow process for an investor. It’s a very similar
process for entrepreneurs, Curry said.
Open.Exchange’s dashboard looks like a customer
relationship management program for investments.
Investors and startup founders both upload data to the
platform. Open.Exchange provides information on companies based on industry,
location, stage of growth, and how much money they have raised to date.
Investors complete a profile with information on
previous investments and their interests.
Companies looking for funding also fill out profile
information and upload documents related to their business including pitch decks.
Open.Exchange is powered by artificial intelligence and
machine learning with humans in the loop, Curry said.
“We want to make it progressively better,” Curry said.
“The more you interact with the system, the smarter it gets.”
Open.Exchange also ranks companies on several factors and provides a score based on that ranking. Right now, it’s built around BuildGroup’s thesis on investing in startups with what it dubs a modern business model involving a subscription, technology stack, community, and marketplace. It scores a company on its use of data science in its value proposition, leveraging of modern software and integration into other services, and benefits from network effects.
“Today, all of this is done manually for us,” Curry
said.
Through BuildGroup’s own investment process, it came
upon a problem that needed a solution. So much of the investment process and
the appeal for capital is done on paper and in closed systems with little
feedback ever given to the entrepreneur seeking capital, Curry said. With the
Open.Exchange system, the entrepreneur can receive immediate feedback, he said.
Open.Exchange could potentially become like a private
stock exchange for companies seeking capital and investors looking for good investments,
Curry said.
The 4-Star boutique hotel, which opened in 2015, is a symbol of the transformation that has taken place in downtown Austin in the last decade. The neighborhood once filled with single-family homes is now an entertainment district with bars and restaurants and several high-rise hotels and condominium projects under construction or just completed.
Across the street from the 16-story Hotel Van Zandt, the Quincy, a 30-story tall mixed-use office building is being constructed on what used to be a gravel parking lot.
Nate Baker, CEO and Founder of Qualia Labs
“Austin is on fire right now, it’s unbelievable,” said Nate Baker, CEO, and Founder of Qualia Labs, a real estate technology company that streamlines the homebuying process. Qualia hosted the real estate summit that brought together some of Austin’s hottest real estate technology companies along with real estate professionals.
Qualia is part of that growing real estate tech hub in Austin. It opened an office here three years ago with sales and customer success as its major focus, Baker said. Today, Qualia has 170 people in Austin, more than its San Francisco headquarters, and they are in a variety of roles including product development, he said.
While Qualia is considering relocating its headquarters
to Austin, San Francisco still has more engineers than Austin, Baker said.
“I think that will change at some point,” he said.
Austin is an easy sell to employees, Baker said. They
enjoy the quality of life here and the cost of living is affordable, especially
compared to San Francisco, he said.
Austin is also ripe for innovation in the real estate
market with a handful of real estate tech companies here addressing problems in
the industry, Baker said. Among them, OJO Labs, Opcity, which was acquired by
Realtor.com in 2018, and Homeward, which allows consumers to make all-cash offers to secure their
next home before selling their existing home.
Everyone is working to make it easier to buy or sell a
house, Baker said.
“It’s really a hard process today,” Baker said. “You
would think that it would be better.”
Buying and then selling the same house costs 10 percent to 15 percent of the home’s value and involves a lot of work for the homebuyer, homeowner and real estate industry professionals, Baker said.
Qualia created software focused on the backend of the
transactions.
“It’s kind of solving the guts of the paperwork and
escrow and the really complicated stuff behind the scenes,” Baker said. “What
it does is it makes it really easy for the consumer to do a transaction.”
Qualia’s primary customer is the title agent, but more
than 600,000 real estate agents and lending officers also use Qualia to manage
their transactions, Baker said.
“Our focus is to help the way things are get better rather than try to get rid of anybody,” Baker said. “That never works. You must build for how it is and make it better.”
Ben Rubenstein, Opcity CEO, and Co-Founder
Opcity Co-Founder and CEO Ben Rubenstein spoke at the summit about the future of real estate agents.
“They are still going to be a really critical part of
the transaction but won’t necessarily do the same jobs that they do today,” Rubenstein
said.
A lot of the search and discovery process is going to
go away, he said. And a lot of the taking people around to their homes is going
to go away, he said.
“Certainly, the negotiation process is going to remain,”
he said. “There will be fewer agents in the long run, but they will be doing
many more transactions.”
Another big piece he talked about is how title organizations can be closer to the transaction.
“Today, most of the title marketing is going directly
to agents and finding ways for agents to refer them business,” Rubenstein said.
“I think in the future, title and lending will partner with portals like Realtor.com
to have a seamless experience.”
“Consumers want to be responded to much faster,” he
said. “And they also want a one-stop end to end solution. Realtor.com is the concierge
on the entire journey.”
Realtor.com bought Opcity in 2018 for $210 million.
Since then, Opcity is slowly transitioning its brand to Realtor.com, Rubenstein
said.
The company is also growing dramatically in Austin. It recently opened a 30,000 square foot tech hub on the East Side, and it has maxed out space at its 50,000 square-foot headquarters at the Austin Bergstrom Tech Center on the Southeast Side, he said. They are on the hunt for larger headquarters and they plan to hire 500 new employees this year, he said. Already, Opcity has 660 employees.
Austin has become a hotbed for the real estate tech
industry, Rubenstein said. There is a lot of money pouring into this space, he
said.
John Berkowitz, CEO, and CoFounder of OJO Labs
OJO Labs has seen that evolution underway in Austin also, said John Berkowitz, its CEO, and Co-Founder. He spoke at the summit about artificial intelligence and its impact on the real estate industry.
“We’re applying AI and machine learning to a lot of parts
of the real estate journey,” he said.
AI is going to reduce menial tasks and help people make
better decisions through big data, he said.
“The big headline coming out of it is this is going to make specific groups of real estate agents very effective and be able to handle more transactions,” he said. “It’s going to extend the country’s best agents to more consumers. Remove the things agents don’t like to do and increase the things they do like doing.”
Real estate agents don’t want to respond to a niche message about a home at 3 a.m., real estate agents do want to sell homes, he said.
OJO has created a virtual assistant that
helps homebuyers and sellers. Its agent uses natural conversations conducted
via text messages to help a person find a house.
Last year, OJO moved its headquarters to
the top floor of a newly completed four-story building at 1007 South Congress
Ave. Construction is still underway in the area as developers
complete another office building, hotel and more. It’s part of the commercial
real estate boom underway in Austin.
And Berkowitz thinks this is just the
beginning of Austin’s evolution as a tech center. And with Keller Williams, The
Guild, Homeward and other innovators in the real estate industry based here,
Austin is becoming known for its real estate technology, Berkowitz said.
“We just have that momentum,” he said. “It’s
just going to keep going.”
There are some serious investors and
entrepreneurs moving to Austin from the West Coast contributing to the city’s
growth, he said.
“I don’t think people realize this is literally day
one,” Berkowitz said. “Whatever we have
seen in the last decades, it’s nothing compared to what is coming. You are going
to see this become ground zero for a lot of innovation and a lot of change.”
Adam Gauvin, Wikibuy’s Co-CEO and vice president of product at Capital One and Walt Roloson, Co-CEO and vice president of business at Capital One
Austin has become an eCommerce hub.
And that’s thanks, in part, to homegrown startups like Wikibuy, which was acquired by Capital One for an undisclosed sum in November of 2018.
Other major Austin players in the
eCommerce industry include RetailMeNot, Bazaarvoice, BigCommerce, Dosh, Convey,
H-E-B Digital, Black Locus/Home Depot, and Favor.
And Austin
is also home to Walmart’s Digital Innovation Center downtown and Amazon’s major
hub in the Domain.
Austin’s
technology industry is attracting major retail players and nurturing home-grown
startups.
“Becoming part of Capital One was beyond our dreams,” said Adam Gauvin, Wikibuy’s Co-CEO and vice president of product at Capital One.
“We had a
lot of interest from a lot of players,” he said. “Capital One was someone we knew,
and they were like-minded.”
Capital One Financial Corp., based in McLean, Virginia, is one of the nation’s top 10 largest banks. It’s known for its Capital One credit card with the slogan “what’s in your wallet?” and famous spokespersons like Taylor Swift and Jennifer Garner. Capital One also operates two Capital One Cafes in Austin which allow people to grab a coffee and work remotely.
Since its acquisition, Capital One has provided investment and allowed the company the freedom to explore new areas, Gauvin said. And Wikibuy has grown dramatically, he said. Wikibuy has gone from 19 employees to 30 employees in Austin and 75 employees nationally, he said. The site has grown from one million users to three million users, he said. And Wikibuy is serving more than 30,000 e-commerce sites and it’s growing, he said.
And both
Gauvin and Walt Roloson, Co-CEO and vice president of business at Capital One,
are still running the company from Austin. They met with media at the Hotel Van
Zandt for a briefing on their business Wednesday morning.
Wikibuy started out as a comparison-shopping engine. A shopper would search for a product and Wikibuy would offer up the best price. It still does that, but it also has a browser attachment now that can automatically apply coupons to purchases and offer cash-back rebates to shoppers.
Wikibuy competes with sites like Austin-based RetailMeNot, Austin-based Dosh and Rakuten, formerly eBates, with its North American headquarters based in San Mateo, Calif.
E-Commerce
overall is booming as more consumers turn to the Internet to make purchases.
Holiday
retail sales hit $730.2 billion in 2019, up 4.1 percent, compared to the same
time a year earlier, according to the National Retail Federation. Online and
other non-stores sales made up $167.8 billion of that amount, up nearly 15
percent from a year earlier.
Another
trend is mobile shopping is growing 20 percent to 30 percent a year, Gauvin
said.
Wikibuy plans to grow steadily from Austin as online shopping becomes an even bigger part of the overall retail industry, Gauvin said.
“We’ve had
pretty steady success,” he said. “Our hope is we continue to make a bigger dent
in the marketplace.”
Finding a parking space in downtown Austin is an increasingly difficult task that FlashParking seeks to solve.
And the Austin-based company landed $60 million in strategic investment from the Growth Fund of L Catterton, a private equity firm.
FlashParking plans to use the funds to scale its parking
solution into connected mobility hubs.
Founded in 2011, FlashParking previously raised $4.3 million.
FlashParking provides parking lot owners with real-time data so they can raise or lower parking prices depending on demand.
“FlashParking is a best-in-class
parking solutions provider with proven technology and an industry-first
cloud-based software solution,” Michael Farello, Managing Partner, L Catterton
Growth Fund, said in a news release. “We are pleased to partner with the
FlashParking leadership team to accelerate the Company’s growth and facilitate
the delivery of mobility services to consumers and businesses.”
In the coming months, FlashParking plans to announce new partnerships
with transportation, logistics, and mobility companies that are leveraging its
platform.
“Over the last nine years, we have built the FlashParking
platform with quality and adaptability in mind by making it cloud-based,
mobile-first, and future-ready. This unique platform has allowed us to
configure an operating system that’s not only the best solution for parking
infrastructure today but also a model that’s ready for tomorrow,” Juan
Rodriguez, co-founder of FlashParking, said in a news release. “With this
funding from L Catterton,
we’ll be able to quickly scale our mobility hub operating system and become the
only company that can turn customers’ parking assets into facilities that
enable every facet of mobility, including mobile-enabled parking and valet,
staging for TNCs, charging for electric vehicles, cleaning and servicing, drone
launching and landing, and points for delivering.”
FlashParking already has a partnership with Texas Medical Center
(TMC), the world’s largest medical city. Its mobility platform controls 30,000
parking spaces via 230 lanes across 34 facilities while simplifying parking,
reducing congestion, improving traffic flow, and enhancing the experience for
the more than 10 million patients, visitors, staff, and students who visit TMC
annually.
In addition to TMC, FlashParking serves more than 6 million parkers per month and processes $1 billion in transactions at more than 1,300 locations worldwide.
L Catterton current and past investments include ClassPass, Artsy,
Vroom, Get Your Guide, and Enjoy.
