Mastercard announced Tuesday that it has acquired Austin-based Vyze, a cloud-based financial technology company.

The financial terms of the deal were not disclosed. Vyze, founded in 2008, has raised $48.1 million to date.

Vyze works with lenders to provide consumer finance products like branded store credit cards, installment loans and lease to own payment plans. It is available in thousands of stores throughout the U.S. It’s also available through online stores and call centers.

“Vyze shakes up traditional models by connecting merchants with multiple lenders, allowing them to offer their customers a wide range of credit options online and in-store,” according to Mastercard. “These financing options provide shoppers with additional payment flexibility at the exact moment of purchase, complementing Mastercard’s existing card and ACH-based solutions.”

“Both consumers and businesses want the best choice and service, exactly when they need it,” Blake Rosenthal, executive vice president of global acceptance at Mastercard, said in a news release. “Vyze adds to our ability to empower banks and other lending partners to participate in the growing trend of retail financing. The combination of their platform with our technology and network complements our existing payments programs.”

The acquisition gives Mastercard even more ways to serve merchants and lenders. Vyze’s platform provides retailers with a one-stop solution for payments and financing customer purchases.

 “Shoppers looking for new ways to pay and merchants looking to sell higher ticket items and deter abandonments has driven a flurry of activity in the ‘Buy Now, Pay Later’ market,” Raymond Pucci, director of merchant services practice at Mercator Advisory Group, said in a news release. “This acquisition creates a new market making approach that supports operation at scale, helping banks offer and merchants shop for the terms that best fit their needs. Mastercard’s existing relationships will assure both take a serious look at this new solution.”

Several top U.S. retailers work with Vyze for special financing options.

“Mastercard has a long history of building an incredibly powerful network, connecting some of the world’s most influential financial institutions, merchants and innovators,” Keith Nealon, CEO of Vyze, said in a news release. “With their relationships and scale, we see a great opportunity to reach exponentially more partners and consumers.”

EverlyWell, the Austin-based healthcare testing platform, announced Tuesday that it has received $50 million more in venture capital funding.

To date, the Austin-based company, founded four years ago, has received $55 million in total funding.

Goodwater Capital led the Series B funding along with Highland Capital Partners. Other investors included Next Coast Ventures, NextGen Venture Partners, SoGal Ventures and others.

Everlywell plans to “use the funding to expand its digital platform and scale existing partnerships with leading brands like CVS and Humana,” according to a news release.

Everlywell is a digital health platform that provides at-home health tests and lab results.

The company makes and sells at 35 home lab testing kits for sexual health, thyroid, metabolism, men’s health, and other health needs. It sells the kits online and at retail stores like CVS and Target.

Julia Cheek, EverlyWell’s founder and CEO, told the Wall Street Journal that the company “has shipped 275,000 kits to date and had more than $20 million in sales in 2018 because it offers an affordable shortcut to the often laborious, expensive process of ordering lab tests.”

“Overall, what we are seeing now is the impact of educating consumers about the possibility of using digital health for certain conditions,” Cheek said in an interview with the Wall Street Journal.

EverlyWell has also been bringing on key executives and has hired former uShip Chief Technology Officer Nick Parker. Other key hires include bringing on former Pinterest executive Jenifer Dasho as chief marketing officer and Executive Medical Director Dr. Marra Francis.

Today, EverlyWell also announced that Dr. Robert Langer will join the company’s Scientific Advisory Board.

“Lab testing is arguably one of the most important steps in preventing and managing illness, but has been largely ignored by digital health companies,” Eric Kim, managing partner at Goodwater Capital, said in a news release. “With a clear consumer pain point and a strong executive team that integrates both consumer and healthcare expertise, EverlyWell is successfully navigating an entrenched industry to offer consumers an opportunity to take charge of their own health.”

Silicon Hills News also named EverlyWell as one of Austin’s 25 Hot Startups to Watch in 2019.

By LAURA LOREK, Publisher of Silicon Hills News

Zoho wants to keep things weird in Austin.

The software company officially announced this week at its annual Zoholics conference that it is moving its headquarters from Pleasanton, Calif. to a 369-acre campus near the Austin airport.

“I like Austin,” said Sridhar Vembu, Zoho’s founder and CEO, when asked during a press conference Wednesday afternoon at Zoholics about the move.

“My only thing is, I hope that not too many people are like us and select Austin because we don’t want to lose it,” Vembu said. “Actually, I was talking to someone today: Austin is how San Francisco used to be 30 years ago. It had the weirdness. It had all this stuff. The artists and the live music.”

On his way back to his hotel Wednesday night, Vembu came across a band playing and had to stop and listen to the music.

“It’s unbelievable,” he said. “I thought man, this is heaven.”

But if too many people move here, they are going to screw it up, like they screwed up San Francisco, Vembu said. That echoes a sentiment many in Austin feel with the dramatic expansion of the technology industry in the past decade.

In addition to Zoho’s new campus, Amazon is expanding its presence with a new building and 800 more employees in the Domain, and Apple is putting in a $1 billion campus in North Austin. And Oracle’s Larry Ellison said its new downtown campus, which opened last year with 2,000 employees will expand to 10,000 employees in coming years.

But Zoho isn’t the typical technology company. And Vembu, sporting jeans, a red Go Zoho T-shirt, and sandals, is not a typical tech founder. He’s a laidback entrepreneur who thinks differently about business and he focuses on long-term accomplishments instead of short-term results.

For example, Zoho, founded 23 years ago, is bootstrapped and has never taken on any outside investment. And its approach to doing business is decidedly different than most in Silicon Valley.

“To do interesting things you cannot have outside investors that have a different mindset,” Vembu said.

In addition, Zoho doesn’t do merger and acquisitions to expand its product line but instead develops all of its own software. It has 7,000 employees today with many of them based at a 45-acre campus in Chennai, India. Zoho makes a suite of software applications to run a business. It calls its Zoho One product “an operating system for business.”

And here’s a fascinating tidbit – Zoho’s campus on the outskirts of Austin off Texas State Highway 71 near Kellam Road – cost less to buy than Zoho’s 45-acre campus in India, said Raju Vegesna, Chief Evangelist at Zoho.

Vegesna heads up Zoho’s Austin operations. The company has been in Austin for about 10 years. It currently leases 27,000 square feet of space in the Bergstrom Tech Center, next to where Opcity has its headquarters. It has 60 employees currently but expects to reach 100 by the end of the year, Vegesna said. He moved to Austin two years and he bought the first 90-acre plot, under the name T&V Holdings, a year ago and recently Zoho bought an adjacent 279-acre tract. The two plots of land are valued at  $4.7 million by the Travis County Property District. But Zoho did not disclose what price it paid.

And here’s another thing that sets Zoho apart:  Zoho is not going to seek incentives from local or state government or ask for tax abatements on the property, Vegesna said. It might ask the City of Austin for help in dealing with getting permits to set up wastewater and water to the site, Vegesna said.

“It’s currently farmland,” he said. “We have cows on the site.”

The land is listed as dry cropland and native pasture on the property roll.

Plans call for Zoho to build a 100,000 square foot building on the campus, which should be complete in 2021, Vegesna said. That building will house about 500 employees, he said. Zoho plans to hire most of those workers locally and plans to keep its Pleasanton office, he said. He doesn’t expect many workers to relocate from California.

Zoho also hopes to open its first Zoho University in the United States at the site. It has a Zoho University in India. At the school, Zoho pays students to learn how to create and use Zoho software. It hires many of its graduates. About 15 percent of Zoho’s engineering workforce is made up of graduates from Zoho University. It’s hoping to have a similar program in Austin, Vegesna said.

“We create our own talent,” Vembu said.

At the Zoholics event, Zoho invited 50 high school students from the Del Valle Independent School District, which is where its campus will be located, to participate in the program. It hopes to work closely with Austin schools, Austin Community College and others in the local education system, Vegesna said.

The Zoholics event at the Palmer Events Center was the largest user conference to date with more than 1,600 people attending, including 200 Zoho employees.

During his keynote talk, Vembu, CEO of Zoho, told the audience that Zoho has a “particular kind of vision” that’s “insanely ambitious.”

“You almost have to be crazy,” Vembu said.

Zoho has a unique culture that focuses on holistic thinking, Vembu said.

“The entire Zoho products suite came from that kind of thinking,” Vembu said.

Zoho has built a culture and strategy with vision, drive and patience, he said.

“We have achieved all of this while keeping the human element at the center,” Vembu said.

Zoho has created 48 software apps for sales and marketing, finance, email and collaboration and more. It put them altogether and offers them to business as Zoho One. The company has seen an explosion in interest from customers in the last few years, Vembu said.

Zoho is succeeding because it has relentless determination to make its software work together and to keep going, Vembu said. It also has patience in execution, he said.

“The patience and boldness especially in today’s world is really, really hard,” he said.

That’s why Vembu seeks solitude. He doesn’t carry a phone with him. He likes to get an hour or two of solitude a day to contemplate, think and create.

Zoho has had a 15-year research and development period. It started its office suite in the fall of 2003, Vembu said.

“It took us 10 years to get to the level where we thought it was something good,” Vembu said.

Being a privately-held company allowed Zoho to take its time to develop Zoho One, a suite of software apps for every kind of business from small to medium to Fortune 500 companies. Its largest customer is a publicly-traded company with 28,000 employees. About 25 percent of Fortune 500 companies are Zoho customers.

Zoho doesn’t have a rush to the “exit,” mentality and that has given the company the ability to do things differently than other tech companies, Vembu said.

“We are not going anywhere,” he said. “There is no exit. Startups now are supposed to aim toward the exit. We said no to that.”

“You do something because you love it,” Vembu said. “Why would we exit what we love?”

Zoho still supports customers, like IBM, which it signed up in 1999.

When competitors melted away during the dot com bust, Zoho was still standing, Vembu said.

“We will survive the present bubble too,” he said. “We believe there is a bubble right now. Tech bubble. Housing bubble. All bubbles always bust.  You need to build durable companies that can navigate these huge cycles…We have built this company to survive these bubbles.”

Freedom from Wall Street is what has allowed Zoho to afford its unique culture, Vembu said.

“We don’t have worry about making particular numbers,” he said.

Zoho believes in cultivating long-term customer relationships and long-term employee relationships, Vembu said.

“We take care of employees. I actually never want to lose them,” Vembu said.

It also doesn’t outsource its customer support. It wants its support people to build careers with Zoho, Vembu said.

Zoho’s compound annual gross revenue grew 37 percent the last five years, said Vijay Sundaram, Chief Strategy Officer of Zoho. The company worries that it might be growing too fast, he said.

The U.S. market makes up 42 percent of Zoho’s revenue, down from 52 percent in 2012, Sundaram said.

But it has big plans for Austin, Sundaram said.

“We are going big in Austin that’s the only way to do it in Texas,” he said. “It’s mind boggling to think you can buy that can of land in a major city only 15 minutes from the airport.”

University of Texas at San Antonio Associate Professor Arturo Montoya is a civil engineer and an expert on how earthquakes and hurricanes impact bridges and buildings.

It’s that expertise that attracted Purdue University principal investigator Shirley Dyke to ask him to collaborate on the Resilient Extra-Terrestrial Habitats Institute for NASA to explore building homes and other structures on the Moon and MARS.

No matter what they encounter in space, the crew has to be prepared to respond to it, Montoya said. And it is his job and others at UTSA to think up worst case scenarios and then subject model buildings to them to see how they hold up. And in space, they are dealing with a whole lot of other factors than on earth like zero gravity, Montoya said. The UTSA research will use computational models and physical models to study adverse conditions on the Moon and Mars and how that might affect various structures.

The five-year project, which involves Purdue University, the University of Texas at San Antonio,  University of Connecticut and Harvard University will receive $15 million in funding.

The new institute “will design and operate resilient deep space habitats that can adapt, absorb and rapidly recover from expected and unexpected disruptions,” according to NASA.

NASA just awarded the project this week to create two new Space Technology Research Institutes.

The other project is called Habitats Optimized for Missions of Exploration, or HOME. That project is led by Stephen Robinson, principal investigator at the University of California, Davis. He is working in partnership with the University of Colorado Boulder, Carnegie Mellon University, the Georgia Institute of Technology, Howard University, Texas A&M University and the University of Southern California. Industry collaborators include Sierra Nevada Corporation, Blue Origin and United Technology Aerospace Systems. 

The two new institutes will help to develop technologies that are “critical to a sustainable human presence on the Moon and Mars,” according to NASA. “The smart habitat, or SmartHab, research will complement other NASA projects to help mature the mission architecture needed to meet challenging exploration goals.”

“Partnering with universities lets us tap into new expertise, foster innovative ideas, as well as expand the research and development talent base for both aerospace and broader applications,” Jim Reuter, acting associate administrator of NASA’s Space Technology Mission Directorate, said in a news release. “We’re excited to work with these two new STRIs to develop smart habitat technologies for exploration missions on the Moon and Mars.”

At the University of Texas at San Antonio, Montoya said he expects to build scaled-down models of habitats for Mars and the Moon and then subject them to radiation, sudden impacts like those a structure in space might encounter from meteorites, extreme heat, and cold and other adverse conditions to see how the structures hold up.

“It’s a very exciting project,” Montoya said.  

UTSA graduate students and undergraduate students will also be involved, Montoya said. And they will work closely with Purdue University and the others involved in the project, he said.

By LAURA LOREK, publisher of Silicon Hills News

Austin’s venture capital investments rose to $704 million in the first quarter of 2019, up 16 percent from the same quarter a year ago, according to the PwC/CB Insights MoneyTree report.

However, the number of deals in Austin dropped almost 8 percent to 37 in the first quarter of 2019, compared to 40 deals for the first quarter of 2018.

That means fewer, but bigger, deals are getting done in the Austin area, which is mirroring what’s going on nationally with VC investments, said John Cummins, partner with PricewaterhouseCoopers, based in Austin.

Overall, Texas companies received $1.16 billion in venture capital in the first quarter of 2019, a 51 percent increase from the same quarter in 2018, according to the MoneyTree Report.

Deals statewide remained relatively flat with 66 reported for the first quarter of 2019, compared to 67 for the same quarter a year ago.

Nationally, California led VC investments in the first quarter with 461 deals worth $13.1 billion, followed by New York’s 201 deals worth $3.8 billion and Massachusetts with 117 deals and $2.7 billion invested. Texas ranked fourth.

The Texas venture capital deals included three big deals worth in excess of $150 million each with Onit, a project management software company in Dallas receiving $200 million, Magnitude Software in Austin receiving $179 million and Peloton Therapeutics in Houston receiving $150 million, said Cummins with PwC. Those big investments led Texas to buck the national VC trend in the first quarter.

Nationally, venture capital investment fell 36 percent in the first quarter to $25 billion, with four percent fewer deals compared to the fourth quarter of 2018, according to the MoneyTree report. And the report showed “mega-deals were also down from a record fourth quarter in 2018, but well above historic levels with 46 deals worth more than $100 million in the first quarter of 2019.”

Another trend that is continuing is a decline in seed stage funding.

“Seed stage deals began to decline starting in Q3’17, at 35 percent of all deals, falling to 24 percent in Q1 ’19,” according to the MoneyTree report.

And the march of the Unicorns continues with ten new private companies valued at $1 billion plus in the U.S.

Artificial intelligence, cybersecurity and fintech are the categories that led investments nationally, Cummins said. Those are all strong categories in Austin also, he said.

Austin’s technology ecosystem continues to build, Cummins said.

“We are always watching the big tech companies that are putting larger and larger footprints in the market, Cummins said. “That is certainly helpful. It will drive competition for talent and drive demand for those types of skill sets.”

Established companies like Facebook, Google, Apple, Oracle, Zoho, Amazon and others moving campuses here will also lead to a maturation of the market and more startup activity, Cummins said.

Not unlike Silicon Valley, folks that defect from these larger companies, might jump down and launch startups, Cummins said.

“Creating that cycle is what Silicon Valley is today,” he said.

And although people have talked of a bubble for years in the tech industry, all signs in Austin look good, Cummins said.

“It’s all positive momentum from what we can tell,” he said. “When you look at these companies, they are developing real products and services and are focused on real business issues. These aren’t just ideas.”

And venture capital firms like LiveOak Venture Partners announcing the close of its second fund, Fund II, with $105 million are all good signs for the venture capital community and Austin startups, Cummins said.

“The quality of the startup community here is strong,” he said.

Austin’s Top 10 Largest VC Deals for the 1^st Quarter 2019    

           Name                                 Industry                           Funding (in millions)

1. Magnitude Software    Software                              $179
2. Siete Family Foods        Food & Beverage                  $90
3. RigUp                                Software                               $60
4. Outdoorsy                       Internet                                 $50
5. CS Disco                            Internet                                $50
6. Ojo Labs                           Mobile & Telecom               $45
7. ScaleFactor                      Internet                                 $30
8. AlertMedia                      Mobile & Telecom               $25
9. MAP Health                      Healthcare                           $25
10. SpyCloud                          Internet                                 $21

Source: PwC/CB Insights MoneyTree Report

Zoho Tuesday announced plans to relocate its headquarters to Austin from California and to create a new 375-acre campus including a 100,000 square foot building in South-east Austin.

The company, which is hosting its annual national users’ conference, Zoholics, at the Palmer Events Center, will release more details later this morning during a presentation along with Zoho’s Founder and CEO Sridhar Vembu and Austin Mayor Steve Adler.

 Zoho “plans to hire hundreds of employees in the Austin area in the years to come, with a focus on finding and training local talent. It will not require its employees to have a four-year degree, due to its in-house technology program, Zoho University,” according to a news release. Currently, Zoho has about 100 employees in Austin.

Zoho also plans to expand its Zoho University, a technology school for high school graduates based in India, to Austin.

Zoho plans to work with Austin’s schools and community colleges to help educate local students. It plans to replicate the Zoho University, which Zoho’s founder Vembu created in 2005.

Zoho University is in Tamil Nadu, India. It is designed as a college alternative to train engineers and developers. Zoho University has graduated around 900 individuals. Today, approximately 15 percent of Zoho employees, including many managers, are Zoho University graduates.

The Zoho University in Austin will be focused on business administration and marketing. “Training will be offered at no cost, providing them with hire-ready skills upon finishing the program,” according to Zoho.

Zoho, based in Pleasanton, Calif, and founded in 1996, is a privately-held company that makes more than 40 business software applications. The company has more than 45 million users in 180 countries and its revenue grew 39 percent last year, according to a news release. Zoho has also recently added offices in Singapore, Mexico, United Arab Emirates, Australia, and the Netherlands.

Zoho has more than 7,000 employees worldwide in 12 offices in five continents. More than 30 different languages are spoken amongst Zoho’s employees.

“As a private company that’s been in operation for more than 22 years, we are invested in long term growth and crafting the very best business solutions for our customers,”  Vembu, CEO and Founder of Zoho, said in a news release. “Without the pressures of shareholders, we can grow with purpose. It is our imperative to invest in our employees and the communities we are in, while making sure our software remains accessible to every type of business, from small to large, whether they exist in yet-to-be-developed, emerging or fully developed markets.”

Zoho makes more than 40 software application for sales, marketing, customer support, accounting, and back-office operations, and an array of productivity and collaboration tools, Zoho is one of the world’s most prolific software companies.

Zoho is the latest technology company to announce a major expansion in Austin. Amazon recently announced it was hiring 800 new employees and building a new office in the Domain. Oracle opened its campus in Austin last year and announced plans to expand further. Apple is putting a $1 billion campus expansion in Austin. Google and Facebook are both expanding in the downtown area.

LiveOak Venture Partners announced Tuesday that it has closed a $105 million fund, its second fund.

The fund was oversubscribed, according to a news release.

Krishna Srinivasan, Venu Shamapant and Ben Scott founded Austin-based LiveOak in 2013 and raised a $100 million fund to invest in early-stage Texas startups. The three founders met while working together at Austin Ventures.

LiveOak’s Fund II has already led investments in six companies including Austin startups Eventador, Osano and Rollick, and Dallas-based AmplifAI, according to a news release.

“Texas is exploding with opportunity,” LiveOak Partner Srinivasan said in a news release. “We are continuing to execute on our proven playbook of creating successful companies for close to 20 years in Texas. Early stage investing is a local neighborhood sport, and as such, we are looking to be the local lead investor and first money in companies to harness their full potential and help create the next generation of category leaders coming out of this market.”

To date, LiveOak has led or co-led 24 investments. Those companies have collectively raised more than $400 million. Its exits include Digital Pharmacist being acquired by KI Investment Management for more than $100 million and Opcity, acquired by News Corp for $210 million.

And its portfolio company, CS Disco recently raised $83 million and moved its headquarters from Houston to Austin. And OJO Labs recently raised $45 million. Its other investments include TrustRadius, Infocyte and Mavenir.

“LiveOak was an outstanding partner for our business,” Chris Loughlin, CEO of Digital Pharmacist, said in a news release. “As the lead investor and most active board member, they supported us through the challenging and successful times. They helped us develop and execute our strategy of building a network of 7,500 pharmacists and pharmacy owners and played an enormous role in sourcing and closing key hires — their team was critical in empowering our vision into the reality of becoming the definitive leader in our category.”

Fund II will continue to focus on entrepreneurs in Texas

“The fund’s focus will still be on first institutional funding for startups headquartered in Texas’ four largest tech hubs: Austin, Houston, Dallas and San Antonio,” according to a news release. “Initial investments will range from $2 million to $4 million and scale up to $10 million over the full company life cycle.”

Quantum computing is still in its infancy.

But in Austin, Strangeworks, founded by William Hurley, aka, Whurley, is spearheading a venture focused on making quantum computing applications accessible to everyone. It is one of a handful of startups around the world focused on tackling the really big problem of creating quantum computing applications.

On Wednesday, Hurley spoke to a packed auditorium to deliver the keynote address at InnoTech San Antonio, an annual IT conference and trade show held at the Norris Conference Center.

A day earlier, the Department of Energy announced it was making $40 million available to teams “with the potential to dramatically accelerate research in quantum computing.” Quantum computing is a combination of quantum physics, computer science, and information theory.

“In the rapidly evolving field of Beyond Moore’s Law computing, QC emerged as one of the most promising computing technologies in recent years,” according to the DOE.

And that’s what Hurley has been saying since launching Strangeworks a year ago at South by Southwest in Austin. The startup raised $4 million in seed stage funding last June. At the InnoTech San Antonio presentation, Hurley said he runs a startup that is capital efficient and he’s selective on his investors.

“Quantum Computing needs long term investment – from founders and investors,” Hurley said.  

Strangeworks has created a quantum computing platform, which it announced at SXSW 2019, to bring the quantum computing industry together to share, collaborate and publish work on quantum computing.

The platform is currently in a private beta. 

“I think these machines will change forever the course of history” Hurley said.

Hurley said his first startup, Chaotic Moon, did mobile and fun stuff. Accenture bought Chaotic Moon. For his next startup, he wanted to do something good for the world. He launched Honest Dollar because the U.S. has a savings crisis and financial products disenfranchise people, he said. Goldman Sachs bought Honest Dollar.

Now Strangeworks is going to be a catalyst for others, Hurley said. Strangeworks is going to make tools that millions of other people will use to change the world, he said. It is targeting applications in the aerospace, energy, finance and pharmaceuticals industries.

Strangeworks is a team of less than a dozen. 

Quantum computing needs collaboration and compounding discovery to thrive, Hurley said. Two guys in a garage in Silicon Valley will not solve quantum computing alone, he said.

At Innotech, Whurley made a call to action on stage, “if you’re working on quantum computing, come collaborate with us”. 

Quantum Computing will not replace classical computers just like air travel didn’t replace train travel, Hurley said.

“But just like with rail travel, at some point you run into an ocean and you need something new,” he said. “Quantum computing will open up possibilities in computing we haven’t even begun to imagine.”