Self Financial raises $50M to help the subprime consumer build credit and savings at the same time

Self Financial, a fintech company that aims to help consumers build credit and savings at the same time, announced today it has raised $50 million in Series E funding.

Altos Ventures led the financing, which also included participation from Meritech Capital and Conductive Ventures and brings the Austin-based startup’s total raised to $127 million since its 2015 inception.

The company, as many fintechs these days, aims to make building credit and savings more accessible, regardless of a person’s financial history. It requires no hard credit check to get started. 

“We’ve been focused on delivering high-quality, low-cost products that help with mainstream credit access,” said Self founder and CEO James Garvey.

Today, Self Financial has 200 employees, up from about 80 at the beginning of this year. The startup, which was initially founded in California but relocated to Austin after participating in the Techstars program in the city, plans to do more hiring with its new capital.

Garvey declined to reveal hard revenue figures, saying only that Self is going to do “nine figures” of revenue this year, about 2x compared to 2020. Self’s active customer base has more than doubled in the past 12 months to about 1 million today. Over time, it has served more than 2 million customers.

The fintech’s flagship product, he said, is basically secured installment loans, or small-dollar loans with a deposit account that has a CD (certificate of deposit) connected to it.

After using that product successfully customers can then get access to Self’s Visa credit card.

Image Credits: Self Financial

Self’s Credit Builder products are issued via its three bank partners. But the company has built its own proprietary core technology platform that Garvey says “powers everything behind the scenes.” The company’s products are available via iOS and Android, as well as through a desktop application.

Beginning this month, Self will allow people who hold an H-1B or L 1 work visa or student visa to open Credit Builder accounts, a move Garvey said “opens the door for more people to participate who are new to the U.S. credit system.”

“We believe everyone should have the opportunity to improve their financial future,” he added.

Part of Self’s longer-term goals include entering the insurance market, as well as the planned launch of another product designed to help give its customers access to credit.

“Credit score is used for a lot of things, and in many states it’s an important factor in determining the cost of auto insurance,” he said. “We’re going to be helping our customers to get access to auto insurance as one of the benefits of a higher credit score.”

The company plans to use its new capital to hire about 50 to 100 people over the next 12 months, Garvey said. Recently it named Kathleen Leonik to serve as its chief compliance officer. She has previously held leadership positions at Juniper Bank, Barclaycard and, most recently, Mercury Financial. She also worked in compliance at First USA, Bank One and Chase.

Altos Ventures Managing Director Anthony Lee described Self as a pioneer in the increasingly crowded space. This week, TomoCredit, which has the similar goal of helping underrepresented consumers build a credit history, announced it has raised $10 million. And last week, Varo Bank — the first  U.S. neobank to be granted a national bank charter — raised a massive $510 million in a Series E funding round at a $2.5 billion valuation.

“James and his team at Self have had a clear mission from day one: to build credit and savings for millions of Americans who are marginalized by the mainstream financial system,” said Lee. “It’s a mission that is going to take decades to realize and we are happy to be there for the journey.”

For Silverton Partners’ Managing Director Morgan Flager, who participated in Self’s Series A-D rounds, Garvey’s passion has been key to its repeated investments in the company.

When you have a founder with a clear and noble vision for solving a critical problem this massive, it is hard to say no as an investor,” he told TechCrunch.

The firm was also drawn to Self’s mission to “lift up” subprime consumers.

“Many of the offers that target subprime consumers are expensive and restrictive,” he said. “Self Financial is unique in that it intends to break this cycle, rather than just profit from it in a different way.”

#altos-ventures, #apps, #austin, #credit-history, #finance, #fintech, #funding, #fundings-exits, #recent-funding, #self-financial, #startups, #tc, #venture-capital

Please stop adding more lanes to busy highways—it doesn’t help

The intersection of Interstates 10 and 610 in Houston, Texas, during evening rush hour.

Enlarge / The intersection of Interstates 10 and 610 in Houston, Texas, during evening rush hour. (credit: Getty Images)

You often hear people say that the definition of insanity is doing the same thing over and over again and expecting different results. I bring this up because of an interesting—if infuriating—thread I read this morning about Texas’ plan to widen I-35 as it cuts through the heart of Austin.

Unsurprisingly, the state wants to build more lanes, which it thinks will ease congestion. At some points, this could leave I-35 as much as 20 lanes wide; this will require bulldozing dozens of businesses along the way. An alternative that would have buried 12 lanes of the highway in two levels of underground tunnels was apparently considered too costly.

But it would be wrong to single out this 8-mile proposal as an outlier. In Houston, the state plans to widen I-45 despite plenty of opposition, including from the Federal Highway Administration. And you don’t have to look far to see other state governments wanting to build new roads to reduce congestion.

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#atlanta, #austin, #cars, #chicago, #department-of-transportation, #georgia, #highway-planning, #houston, #i-270, #i-35, #i-45, #i-495, #illinois, #induced-demand, #maryland, #texas, #traffic

ICON lands $207M Series B to construct more 3D-printed homes after seeing 400% YoY revenue growth

Creating single-family homes for the homeless using 3D printing robotics. Developing construction systems to create infrastructure and habitats on the moon, and eventually Mars, with NASA. Delivering what is believed to be the largest 3D-printed structure in North America — a barracks for Texas Military Department.

These are just some of the things that Austin, Texas-based construction tech startup ICON has been working on.

And today, the company is adding a massive $207 million Series B raise to its list of accomplishments.

I’ve been covering ICON since its $9 million seed round in October of 2018, so seeing the company reach this milestone less than three years later is kind of cool. 

Norwest Venture Partners led the startup’s Series B round, which also included participation from 8VC, Bjarke Ingels Group (BIG), BOND, Citi Crosstimbers, Ensemble, Fifth Wall, LENx, Moderne Ventures and Oakhouse Partners. The financing brings ICON’s total equity raised to $266 million. The company declined to reveal its valuation.

ICON was founded in late 2017 and launched during SXSW in March 2018 with the first permitted 3D-printed home in the U.S. That 350-square-foot house took about 48 hours (at 25% speed) to print. ICON purposely chose concrete as a material because, as co-founder and CEO Jason Ballard put it, “It’s one of the most resilient materials on Earth.”

Since then, the startup says it has delivered more than two dozen 3D-printed homes and structures across the U.S. and Mexico. More than half of those homes have been for the homeless or those in chronic poverty. For example, in 2020, ICON delivered 3D-printed homes in Mexico with nonprofit partner New Story. It also completed a series of homes serving the chronically homeless in Austin, Texas, with nonprofit Mobile Loaves & Fishes.

The startup broke into the mainstream housing market in early 2021 with what it said were the first 3D-printed homes for sale in the U.S. for developer 3Strands in Austin, Texas. Two of the four homes are under contract. The remaining two homes will hit the market on August 31. 

And recently, ICON revealed its “next generation” Vulcan construction system and debuted its new Exploration Series of homes. The first home in the series, “House Zero,” was optimized and designed specifically for 3D printing.

For some context, ICON says its proprietary Vulcan technology produces “resilient, energy-efficient” homes faster than conventional construction methods and with less waste and more design freedom. The company’s new Vulcan construction system, according to Ballard, can 3D print homes and structures up to 3,000 square feet, is 1.5x larger and 2x faster than its previous Vulcan 3D printers.

From the company’s early days, Ballard has maintained ICON is motivated by the global housing crisis and lack of solutions to address it. Using 3D printers, robotics and advanced materials, he believes, is one way to tackle the lack of affordable housing, a problem that is only getting worse across the country and in Austin.

ICON’s list of future plans include the delivery of social, disaster relief and more mainstream housing, Ballard said, in addition to developing construction systems to create infrastructure and habitats on the moon, and eventually Mars, with NASA.

ICON also has two ongoing projects with NASA. Recently, Mars Dune Alpha was just announced by NASA, ICON and BIG – and ICON so far has finished printing the wall system and is onto the roof now. Also, NASA is recruiting for crewed missions to begin nextfFall to live in the first simulated Martian habitat 3D printed by ICON.

Project Olympus represents ICON’s effort to develop a space-based construction system for future exploration of the Moon and “to imagine humanity’s home on another world.”
“Our goal is to have ICON tech on the Moon in the next decade,” Ballard said.

When asked, Ballard said the most significant thing that has happened since the company’s $35 million Series A last August has been the “the radical increase in demand for 3D-printed homes and structures.”

“That single metric represents a lot for us,” Ballard told TechCrunch. “People have to want these houses.”

To tackle the housing shortage, the world needs to increase supply, decrease cost, increase speed, increase resiliency, increase sustainability… all without compromising quality and beauty, he added.

“Perhaps there are a few approaches that can do some of those things, but only construction scale 3D printing holds the potential to do all of those things,” he said.

ICON has seen impressive financial growth, with 400% revenue growth nearly every year since inception, according to Ballard. It’s also tripled its team in the past, year and now has more than 100 employees. It expects to double in size within the next year.

Image Credits: Co-founders with next-gen Vulcan Construction System / ICON

The series B funds will go toward more construction of 3D-printed homes, “rapid scaling and R&D,” further space-based tech advancements and creating “a lasting societal impact on housing issues,” Ballard said.

“We have already stood up early-stage manufacturing and are in the process of upgrading and accelerating those efforts in order to meet demand for more 3D-printed houses even as we close the round,” Ballard said. “In the next five years, we believe we will be delivering thousands of homes per year and on our way to tens of thousands of homes per year.”

Norwest Venture Partners Managing Partner Jeff Crowe, who is joining ICON’s board as part of the financing, said his firm believes that ICON’s 3D printing construction technology will “massively impact the housing shortage in the U.S. and around the globe.”

It is “enormously difficult” to bring together the advanced robotics, materials science and software to develop a robust 3D printing construction technology in the first place, Crowe said.  

“It is still harder to develop the technology in a way that can produce hundreds and thousands of beautiful, affordable, comfortable, energy efficient homes in varying geographies with reliability and predictability — not just one or two demonstration units in a controlled setting,” he wrote via e-mail. “ICON has done all that, and…has all the elements to be a breakout, generational success.”

#3d-printing, #austin, #construction-tech, #funding, #fundings-exits, #greentech, #icon, #jeff-crowe, #norwest-venture-partners, #oakhouse-partners, #proptech, #real-estate, #recent-funding, #robotics, #startups, #tc, #venture-capital

Austin transplant Geoff Lewis wants to pop Silicon Valley’s ‘self-referential’ bubble

Austin has made headlines over the past year for a number of reasons: It’s home to Oracle’s new headquarters. Tesla is building a massive gigafactory in the Texas capital. And people, mostly tech workers, are leaving the Bay Area in droves to settle in the city, driving up home prices in the process.

It’s not just tech workers. A number of venture capitalists have set up shop in Austin, including Jim Breyer of Breyer Capital and Palantir co-founder Joe Lonsdale, who said last year he was moving his venture capital firm, 8VC, from Silicon Valley to the city.

The latest VC to call Austin home is Geoff Lewis, founder & managing partner of Bedrock Capital, a four-year-old early-stage venture capital firm with $1 billion in assets under management. Lewis started his investing career at Founders Fund, where he was a partner for several years. He either serves or has served on the board of companies such as Lyft, Nubank, Vercel and Workrise. 

Lewis also led early investments in Wish, Upstart, Tilray, Canva, Rippling, ClearCo, Flock Safety and a number of other unicorns. He’s largely credited with popularizing the phrase “narrative violation” to describe promising companies that are overlooked or underestimated because they are incongruent with popular narratives.

In making the move to Austin, the investor said he had grown disillusioned with Silicon Valley and the region’s continued lack of focus on solving what he described as real-world problems. In a recent Medium post, Lewis said he was first introduced to Austin after backing Workrise (formerly called RigUp), a marketplace for skilled trade workers. In fact, he was the company’s first seed investor eight years ago, and has gone on to invest in the company eight subsequent times. Today, Workrise is valued at nearly $3 billion.

Lewis said he was drawn to the company, not just because it was “going to be huge” but also because it was “much more concerned with real people and real places than today’s Silicon Valley behemoths.”

“Put simply, it is a more humane technology company,” Lewis writes. “And it’s my search for this more humane genre of technological innovation that brought me to Texas. I’ve lived on the coasts and built my career as a Silicon Valley technology entrepreneur and investor, but I’ve never felt of the coasts or as an insider in Silicon Valley — I didn’t go to Stanford nor grow up rich.”

TechCrunch talked with Lewis to get more details around his decision to move his firm to Austin, learn more of his views on why Silicon Valley is too much of “a bubble” (spoiler alert: they may not be popular with many of you!) and how he plans to invest in more of Texas’ nexus of startups.

This interview has been edited for brevity and clarity.

TC: I understand that you grew up in Canada. How did you first get involved in the tech industry to begin with?

Lewis: I started off as an entrepreneur myself, building a SaaS company in the travel space [Topguest]. I founded that business in New York City and in 2009, ended up moving my team to San Francisco. I spent most of my career from 2009 to 2021 mostly bouncing between New York and SF. We ended up selling that company in 2011 and it was a reasonably okay outcome. I joined Founders Fund in 2012, where I just fell in love with investing. I ended up really having a special trajectory there and 2012 was a great time to be a young VC in San Francisco and Silicon Valley. I ended up specializing in marketplaces, both consumer and enterprise, backing companies like Lyft and Canva early. I also did the firm’s first fintech investment in Latin America, backing Nubank, and now that company has a $30 billion valuation. 

I grew up with pretty modest means and by 2017, I figured I had done well enough as a VC and I should strike out on trying to get back to what I wanted to do, which was more entrepreneurial. So we founded Bedrock in late 2017. We’re on Fund III now and really it’s been consistent with the investment philosophy I pursued — trying to find what we call narrative violations, or these counter narrative companies that are being overlooked or underestimated. We were very early investors in Cameo, which is now obviously a pretty well-known business, for example.

TC: You initially chose to base Bedrock in New York. Why?

Lewis: When I was at Founders Fund I had a home in both cities (SF and NYC) so I was the kid who grew up in Calgary, Canada, and wanted to live on the coasts and be in the center of the action. But we decided to actually headquarter Bedrock in New York in 2017 because we had an inclination that Silicon Valley was becoming a little bit overly self-referential and wanted to be a bit outside of the noise. New York is less of a one-horse town, so we decided to base the firm there, but really invested in, and continue to invest, everywhere across the country, and quite honestly around the world. We invested in WordPress in the early days, and more recently in Argyle and Lambda School.

TC: Tell me about this migration to Austin. At what point did you decide this is where you want to be and what drew you here? 

Lewis: My first visit was in 2012 when I invested in Workrise, so I came to Austin quarterly for board meetings for years. And then a family member of mine actually got a position at UT (University of Texas). So that made me more excited about spending more time here. And then the real impetus I’d say happened, as I think it did for many people, during the pandemic. I remember in February, my partner Eric [Stromberg] and I had this conversation where we were like, “OK, COVID is going to have a deeper impact on New York City.” We saw it coming and decided we should get out of New York. At first, I moved to Hawaii and it was just a bit too isolated to live year-round, so I was like, “What’s a place that combines access to nature that’s not being in a big city but still has a nexus of smart, interesting people. I also was looking for a place where it would be easy to hop on a plane and get to either coast. Austin was the obvious choice. So many of my friends from the Bay Area were moving there, one after another, and loving it. So by January 2021, we had made the decision to move our firm here.

I don’t believe everyone should move to Austin. I don’t think it’s right for everyone, but I do think it’s right for us.

TC: Having myself lived in both the Bay Area and Austin, I actually see a number of growing similarities between the two. What do you say to that? Do you also feel like the culture is spilling over here?

Lewis: I have friends who are locals and have been here in some cases for like a generation-plus, and in other cases, have lived here since they were kids. They are really alarmed by how the city is changing, certainly like the real estate crisis, especially if you’re anywhere close to the core, is just absolutely insane. They’re definitely not used to the California and New York transplants. I definitely think it’s a problem that the city somehow does not quite have the infrastructure from a housing standpoint and from a transportation standpoint to support the growth on that; it’s a very big problem. I don’t think it’s a healthy long-term dynamic where you’ve got locals that really don’t like the newcomers coming in. So I think that is a big problem and I don’t quite know what the solution is.

But I think the wealth inequality is far less of a problem here than it is in the Bay Area. To me, that’s the number one thing that’s much better about Austin. Yes, there’s a homeless problem and yes there are people struggling here, but we’re not anywhere near the wealth inequality situation that exists in the Bay Area, which is like the most unequal — from a wealth standpoint — place in the country.

People can still get by here. And then I think the fact that it’s a blue city in a red state is actually really important. I’m pretty much an apolitical person and not that engaged in American politics but I do think there’s a dynamic where you’ve got a diversity of views and a diversity of opinions. There’s a natural tension that doesn’t exist in San Francisco and I think that leads to a more healthy set of policies over time.

TC: I know you’re planning to invest in more startups in Austin and Texas but not exclusively, right? 

Lewis: Yes, we will invest anywhere and everywhere but already we have four investments in companies we met here in Austin, three of which we have made just since April. One is a Dallas-based company, Leader, that has built a leadership development platform for enterprises. Another is a stealth company based here in Austin and we’ve also put money in a cryptocurrency analytics company that is not technically based here but has an office in Austin.

I definitely expect we’ll be making more investments in Texas than we used to now that we’re on the ground here.

TC: In your blog post, you made the statement that “innovators in Texas seem to care about real people in real problems more than the obstructions from reality to animate too much of Silicon Valley.” And I thought that was interesting and probably could stir up some controversy and backlash. Can you elaborate on that?

Lewis: I think there’s sort of this cultural dynamic where you have people that truly do live in these bubbles and so when you’re in the technology industry in San Francisco or quite honestly the entertainment industry in Los Angeles, I think folks just live entirely in this sort of self-referential bubble. And you only communicate and only ever interact with people that are in the same industry as you, and I think that leads to just a very, quite honestly parochial sort of inward looking worldview. There is something about a place that is less dominated by technology. When you think about Texas as a state — yes, tech is a major employer in Austin, but tech does not dominate the state of Texas by any means. It’s a huge state, there are lots of people here. There is a much smaller tech community. So definitionally, I think people tend to be friends with people from different walks of life. And I think people are just much more keyed into practical problems and issues.

There’s a Houston company that I’m not an investor in but that I’m really excited about the business, SolidEdge. It’s innovating chemical manufacturing in more environmentally sustainable and cost-effective ways, which to me is very much more of a real-world, practical problem type company. 

You’ve got Leader, which is trying to do leadership development for churches and faith organizations, using software. It feels like a company that just would never get started out of San Francisco where nobody is religious, and no one goes to church. So I do just think it’s a much different vibe here where you’ve got people that are less siphoned off from the real world versus living in this bubble, which is quite unhealthy. I don’t want to spend my time on another widget. I want to invest in things that are gonna actually have an impact on the world.

TC: This will likely be an unpopular opinion with many, and your comments might provoke some defensiveness. What would you say to any counterarguments?

Lewis: It’s not zero sum. The vibe here is I think a healthier one for me but I realize it’s not for everyone. Obviously there are many companies that have dramatically improved the world that have come out of the Bay Area. There are also companies that arguably have been net negative for society. These things are always open to debate. Whether something’s good for the world or bad is fundamentally subjective. I think at the very least Texas is a place where there’s a little bit more freedom to debate those opinions.

#austin, #bedrock-capital, #funding, #geoff-lewis, #tc, #venture-capital

Verifiable secures $17M for its API that manages healthcare provider information

Less than a year after its $3 million seed round, Verifiable snapped up another $17 million for its healthcare provider credentialing API toolkit.

The Austin-based company’s technology creates an infrastructure for healthcare provider data management that puts providers at the center. Verifiable founder Nick Macario told TechCrunch that data fuels critical operations across health systems and insurance carriers, like contracting, credentialing, enrollment, claims and directories. All of this is being done manually now, and often inaccurately, which is leading to billions of dollars of annual waste.

Verifiable’s infrastructure manages healthcare providers and automates the verification of provider data, enabling automation of business processes like credentialing, payer enrollment and network management for virtual healthcare platforms, health systems and insurance payers. It is able to reduce credentialing turnaround times by over 70%, Macario said.

Insurance payers is the newest part of the company’s expansion that includes verifying provider directories. For example, the information that pops up when someone performs an in-network search on their healthcare plan’s website to find a certain provider in their area.

The Altman brothers led the $17 million Series A round and was joined by David Sacks/Craft Ventures and a group of individual investors including Flexport’s Ryan Petersen, Rippling’s Parker Conrad, Front’s Mathilde Collin, Syapse’s Jonathan Hirsch, Todd Goldberg and Rahul Vohra. Tiger Global and existing investors also participated in the round.

Macario was also planning to raise another round of funding, but he said the combination of an inflection point with the product and Jack Altman’s continued investment interest made it a good time to start scaling the team.

Altman said the general space of healthcare technology has potential. It is also a topic near to him — his wife is a nurse. He was speaking to her about what Verifiable was working on, and she told him that there are still teams of people doing this.

“So much data is flowing through, and because healthcare is such a massive part of the country’s GDP, there is so much potential that can be unlocked,” Altman added. “I love Verifiable’s positioning around the provider. They are the people between the healthcare system and the patient, so to have access to their data, patients can form a relationship with them, which is a powerful position.”

In addition to expanding into insurance payers, Macario intends to use the new funding to double his team of 26 employees by the end of the year. The company has openings for engineers, operations and go-to-market talent.

Verifiable works with companies like Lyra Health, Talkspace, Modern Health, Headway, Wheel, Quartet Health, Forward and provider networks to automate credentialing, compliance processes and provider operations.

“We have seen significant growth from customers and users over the past year,” Macario said. “We are making hundreds of thousands of unique verifications and will continue to double down on providers, use cases and insurance providers.”

 

#api, #apps, #austin, #craft-ventures, #funding, #health, #healthcare-technology, #jack-altman, #nick-macario, #recent-funding, #startups, #tc, #the-altman-brothers, #tiger-global, #verifiable

Mark Cuban-backed Eterneva raises $10M to turn your loved one’s ashes into diamonds

The loss of a loved one is perhaps one of the most traumatic things a person can experience.

When it comes to memorializing someone after their death, most people think of planning funerals and/or picking out caskets or tombstones. And those things are typically done with the help of a funeral home.

Enter Austin-based Eterneva, which is building a rare direct to consumer brand in the end-of life-space. The four-year-old startup creates diamonds from the cremated ashes or hair of people and pets. It’s a highly unusual business but one that seems to be resonating with people seeking a way to keep a piece of their loved ones close to them after their death.

Since its inception, Eterneva has seen triple-digit growth in sales — including in 2020, when it more than doubled its revenue, according to CEO and co-founder Adelle Archer. And today, the company is announcing an “oversubscribed” $10M Series A led funding round led by Tiger Management with participation from Goodwater Capital, Capstar Ventures, NextCoast Ventures and Dallas billionaire Mark Cuban. (For the unacquainted, Tiger Management is the hedge fund and family office of Julian Robertson from which Tiger Global Management descended.)

“It was an extremely competitive round,” Archer told TechCrunch. “We received three term sheets and were able to put together an all-star investment group.” That investment group included Capstar Managing DIrector Kathryn Cavanaugh, who also joined Eterneva’s board; Lydia Jett – one of the top female partners at Softbank overseeing their $100B Vision Fund and Kara Nortman, managing partner at Upfront Capital, one of the first women to make managing partner at a VC fund and co-founder of Angel City with actress Natalie Portman.

Archer and co-founder Garrett Ozar launched Eterneva in the first quarter of 2017 after working together at BigCommerce. The company’s origin story is a very personal one for Archer. Her close friend and business mentor, Tracey Kaufman, was diagnosed with pancreatic cancer and ended up passing away at the age of 47. With no next of kin, Kaufman left her cremated ashes to her aunt, best friend and Archer.

“We started looking into different options but all the websites we landed on were so lackluster, somber and overwhelming,” Archer recalls. “Tracey was the most amazing person, and I felt like when you lose remarkable people, you needed better options to honor and memorialize them.”

At the time, Archer was working on a lab-grown diamond startup. Over dinner with a diamond scientist during which she was discussing her mentor’s death, the scientist said, “Well, you know Adele, there is carbon in ashes, so we could get the carbon out of Tracey’s ashes and make a diamond.”

The thought blew Archer’s mind.

“I knew that I had to do that, 100%. Tracy was such a vibrant person, it suited her so perfectly,” she said. “And I’d have a part of her with me all the time.”

Image Credits: Eterneva; Co-founders Garrett Ozar and Adelle Archer

It was the first diamond ever created by Eterneva, and it gave Archer a chance to be a customer of her own product, which she believes has helped in building an experience for her other customers. Soon, she became “fully focused” on the idea, which she viewed as a way to give grieving people “brightness and healing and a beautiful way to honor their loved ones.”

Since inception, Eterneva has created nearly 1,500 diamonds for over 1,000 customers. It can do colorless or nearly any color including black, yellow, blue, orange and green. The entry price for an Eterneva diamond is $2,999 and that goes up based on the size and color. Pets make up about 40% of Eterneva’s business.

“We view ourselves as the complete opposite tone of everything else in this space,” Archer said. “A lot of people are trying to solve planning and logistics around the end of life. We’re about helping people move forward, and building a platform for the celebration of life.”

The process to create the diamond is intricate, according to Archer, taking 7 to 9 months. The intent is to bring the customer along the journey by sharing the process with them at each stage through videos and pictures.

“We do it in parallel with their processing grief, which is super isolating,” Archer said. “They are usually in a different place with their grief than when they first started.”

One of the plans with the new capital is to enable more people to participate in person with the process such as, starting the machine work, or telling the jeweler stories about their loved one and coming up with a custom design that might have little details that represent aspects of their loved one’s life.

The company also plans to use the money to scale their funeral home channel program nationwide via Enterprise partnerships and scaling its operations and capacity in Austin so it can keep up with demand.

Eterneva is banking on the fact that more and more “people don’t want traditional funerals anymore.”

“They want personalization and meaning,” said Archer. “We plan to evolve the platform with different products and services down the road.”

The startup also wants to continue to build awareness around its brand. Recently, it’s seen more than a dozen videos on TikTok about its diamonds go viral, according to Archer.

Prior to the Series A, Eterneva has raised a total of $6.7 million from angels and institutions. Its seed round was a $3 million financing led by Austin-based Springdale Ventures in 2020. Mark Cuban first became an investor in the company when Archer and Ozar appeared on Shark Tank. Cuban took a 9% stake in the company in exchange for a $600,000 investment. Despite claims that the company was a scam, Cuban has stood by the science behind it and put money in the latest round as well.

Via email, he told TechCrunch he views an Eterneva diamond as “a unique, socially responsible way to stay connected to loved ones.”

 “There is still so much upside and growth in their future,” Cuban wrote. “So I doubled down.”  

He went on to describe the creation of diamond from the hair or ashes of a loved one as “such an intense personal commitment.”

“Eternava takes a very emotional and difficult and helps people walk through their journey in a trusted way that I don’t think anyone else can come close to,” Cuban added.

#actress, #austin, #co-founder, #diamond, #funding, #fundings-exits, #goodwater-capital, #investment, #kara-nortman, #managing-partner, #mark, #mark-cuban, #recent-funding, #startups, #synthetic-diamond, #tiger-management, #venture-capital, #vision-fund

Austin-based Fetch Package secures $60M in equity & debt after tripling ARR in 2020

Fetch Package, a last-mile package delivery company for apartment communities, has raised $50 million in a Series C round of funding and closed on a $10 million venture debt facility.

Michael Patton founded Fetch in May 2016 after being frustrated by having packages lost at the apartment community in which he was living. 

“I took the time to research how communities were handling packages. What I found was that some communities are receiving up to 300 to 400 packages a week and trying to manage that volume manually, adding a significant time burden on the team,” he told TechCrunch. “I knew there had to be a better way and that solution needed to be one that could easily handle the future of package delivery as e-commerce was gaining significant traction.”

Fetch launched its operations in Dallas in February of 2017 with the goal of solving “the package problem” for apartment communities. The startup, which later moved its headquarters to Austin, has seen impressive growth.

By the end of 2017, the SaaS company was servicing approximately 2,000 apartments in the Dallas area. Over the next three years that number grew to almost 150,000 doors being serviced out of 25 warehouses in 15 markets, including Atlanta, Austin, Charlotte, Chicago, Denver, Houston, Orlando, Portland, Phoenix, Arizona and Seattle.

Fetch currently has just over 200,000 doors, or around 700 communities, across the country under contract. It says it works with seven of the top 10 nationally recognized apartment management companies in the country, in addition to “a majority of the largest owners and developers.” Last December, it inked a national preferred vendor agreement with management giant Greystar. Fetch delivered about 3.5 million packages in 2020, and hit the 2.5 million mark for volume in June 2021. The company says it’s currently on track to deliver more than 8 million packages by the end of the year. 

While the company would not disclose hard revenue figures, Patton says it tripled its year-over-year ARR (annual recurring revenue) in 2020 and GAAP revenue grew 6x year-over-year. Over the last two years, Fetch has seen “record sales,” he added, and is on pace to surpass 300,000 units by year’s end. Austin-based Ocelot Capital led its Series C round, which also included participation from Greenpoint Partners, Alpaca VC and Rose Park Advisors. Existing backers Iron Gate Capital, Signal Peak Ventures, Venn Ventures, Pando Ventures and Seamless also put money in the round. 

In addition to the equity raise, Signature Bank provided the company with a $10 million venture debt facility. The latest financing brings Fetch’s total funding to more than $92 million, and triples its valuation from its $18 million Series B raise last August.

Andrew Townsend, managing member at Ocelot Capital, believes that Fetch is “solving for a major bottleneck within the supply chain that is often overlooked.”

“We expect e-commerce delivery volume to continue to grow for the foreseeable future and Fetch is the only scalable solution available to multifamily operators,” he said. 

What makes Fetch stand out, in his view, is that the company can “efficiently” manage the fluctuations in package volume in ways that traditional parcel storage solutions cannot. It also provides apartment residents with the “unique convenience of on-demand doorstep delivery that aligns with the varied schedules of apartment dwellers,” Townsend added.

All packages at Fetch’s client communities are sent to the company’s facilities using a unique code identifier. The company then coordinates scheduled, direct-to-door delivery with residents directly via its app in a time frame that it says “works best for their schedule.”

“This takes the property out of the package management business and provides residents with a convenient amenity,” Patton said.

Fetch works with a mix of W2 employees as well as 1099 contractors to fulfill their service. On the W2 side, Fetch has had a 50% increase in total employees since the middle of last year, with about 350 employees today. This is in addition to the “thousands” of independent contractors/gig economy workers who also serve as drivers in all their markets.

Looking ahead, Fetch will use its new capital primarily to expand into new markets, with plans to launch in South Florida, Philadelphia, San Francisco, Nashville, Minneapolis and a “few other markets” over the next two quarters. Over the next 18 months, the company intends to launch around 20 new markets. The money will also go toward investing in its tech stack and operational infrastructure, Patton said.

#apps, #atlanta, #austin, #e-commerce, #fetch, #fetch-package, #funding, #fundings-exits, #houston, #logistics, #minneapolis, #ocelot-capital, #package-delivery, #phoenix, #real-estate, #recent-funding, #saas, #seamless, #series-c, #signal-peak-ventures, #startup, #startups, #supply-chain, #venture-capital

Texan city to deploy intelligent traffic system from Velodyne Lidar

Velodyne lidar sensors will create a real-time 3D map of this dangerous intersection in Austin to help the city make its roads safer.

Enlarge / Velodyne lidar sensors will create a real-time 3D map of this dangerous intersection in Austin to help the city make its roads safer. (credit: Velodyne)

American roads have never been especially safe compared to those in other countries. But the pandemic made things worse, with shocking rises in crashes and deaths of both drivers and pedestrians in 2020 despite a decrease in the number of miles Americans traveled. Reducing this catastrophic casualty rate is a goal of the autonomous vehicle industry, which often cites a (probably misleading) statistic claiming that 94 percent of all fatal crashes are due to human error.

But some of the technology companies driving the AV revolution are also interested in improving traffic infrastructure. On Wednesday, Velodyne Lidar announced that it will deploy a lidar-based traffic-monitoring system to a dangerous intersection in Austin, Texas, as part of its Intelligent Infrastructure Solution.

The system will create real-time 3D maps of roads and intersections, replacing the current combination of inductive loop detectors, cameras, and radar. Velodyne has joined Nvidia’s Metropolis program and will use Nvidia Jetson AGX Xavier edge processors to interpret the lidar data.

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#austin, #cars, #edge-computing, #nvidia, #texas, #traffic-safety, #velodyne

Meet Nickson, the furniture-as-a-service startup that Barack Obama’s ex-financial adviser just backed

Ever toured an apartment and fall in love with the model unit?

You’re not alone. Harvard Business School grad Cameron Johnson is a former institutional real estate investor and Greystar exec turned startup founder that realized that very often, “renters would try to rent the model apartment.”

This got him thinking. People would love to rent a model apartment in a building, and no one likes to move. This spelled opportunity in Johnson’s mind.

So in 2017, he came up with the idea of Nickson, a Dallas-based startup that fully furnishes apartments on demand.

Image Credits: CEO and founder Cameron Johnson / Nickson

“I thought ‘What if you gave people the ability to simply rent the model, or the ability to add everything in their space needs with a few clicks, similar to how a cable modem comes to your house ’ ” CEO Johnson said. “I wondered, ‘Why can’t we do that for everything else?’ ”

But Nickson doesn’t just provide furniture such as beds and sofas, it delivers all the essentials too — from extension cords to pots and pans to silverware to curtain rods. By partnering with a variety of retailers, the startup claims that it allows users “to make their new spaces move-in ready in as little as 3 hours.” 

Users take a style quiz and share apartment layout details. Nickson’s designers create an initial layout based on the dimensions of an apartment, desired functions (such as work from home) and the volume of furnishings based on a person’s lifestyle. Once the layout is complete, Nickson creates a custom design, including all furnishings and home goods. 

Upon signing up, users pay a one-time installation fee for the furniture-as-a-service offering, and then a monthly subscription charge for the duration of a lease — starting at $199 a month for a studio to $500 a month for a 3 bedroom apartment. The startup also offers concierge services such as a household supply starter kit and maid service, as an add-on to its flat monthly subscription.

Nickson is currently only live in the Dallas market, but plans to expand into other cities over the next 12 months, including expanding its beta tests in Austin and Houston. And it’s just raised a $12 million Series A to help it advance on that goal. 

A fund managed by Pendulum Opportunities LLC, a wholly owned subsidiary of Pendulum Holdings LLC, led the Series A round, which also included participation from Motley Fool Ventures, Revolution’s Rise of the Rest and Backstage Capital. 

The COVID-19 pandemic has disrupted the global supply chain, leading to delivery delays for consumers. Nickson has purchased items over time that it stores as local inventory, making it even more attractive to renters who don’t want to deal with delays and hunting down furniture and essentials, Johnson said. The convenience Nickson offers led to its user base growing 700% in 2020 compared to the year prior, he added.

Robbie Robinson, co-founder and CEO of Pendulum, said his firm was drawn to invest in Nickson due to a combination of Johnson’s “vision, secular shifts toward renting and subscription consumption and the company’s disruptive business model.” (Robinson is President Barack Obama’s former financial adviser, and recently founded Pendulum to invest $250 million in founding startups of color).

Kabir Ahmed, vice president at Pendulum, added that he believes Nickson’s model is superior to the concept of renting one-off furniture pieces in that it offers an “end-to-end, turnkey solution.”

This seamless experience is highly differentiated and offers a compelling value proposition for the consumer,” he said.

Of course, Nickson is not the only company attempting to turn the stodgy furniture rental industry on its head. Other startups offering similar services as Nickson include Oliver Space, Fernish and The Landing.

But Nickson claims that it stands out from the competition in that it “takes care of everything” beyond furniture (including artwork and toilet wand brushes) and that it can curate space and bring it all in before a renter even shows up.

“No other competitor in this space offers this level of service, detail or turnaround,” Johnson says. “You can literally arrive at your new home with a suitcase and toothbrush, and it’s ready to ‘live in.’”

#apartment, #austin, #backstage-capital, #barack-obama, #cable-modem, #ceo, #dallas, #funding, #fundings-exits, #harvard-business-school, #houston, #motley-fool-ventures, #president, #real-estate, #recent-funding, #startup, #startup-company, #startups, #venture-capital, #vice-president

DealHub raises $20M Series B for its sales platform

DealHub.io, an Austin-based platform that helps businesses manage the entire process of their sales engagements, today announced that it has raised a $20 million Series B funding round. The round was led by Israel Growth Partners, with participation from existing investor Cornerstone Venture Partners. This brings DealHub’s total funding to $24.5 million.

The company describes itself as a ‘revenue amplification’ platform (or ‘RevAmp,’ as DealHub likes to call it) that represents the next generation of existing sales and revenue operations tools. It’s meant to give businesses a more complete view of buyers and their intent, and streamline the sales processes from proposal to pricing quotes, subscription management and (electronic) signatures.

“Yesterday’s siloed sales tools no longer cut it in the new Work from Anywhere era,” said Eyal Elbahary, CEO & Co-founder of DealHub.io. “Sales has undergone the largest disruption it has ever seen. Not only have sales teams needed to adapt to more sophisticated and informed buyers, but remote selling and digital transformation have compelled them to evolve the traditional sales process into a unique human-to-human interaction.”

The platform integrates with virtually all of the standard CRM tools, including Salesforce, Microsoft Dynamics and Freshworks, as well as e-signature platforms like DocuSign.

The company didn’t share any revenue data, but it notes that the new funding round follows “continued multi-year hyper-growth.” In part, the company argues, demand for its platform has been driven by sales teams that need new tools, given that they — for the most part — can’t travel to meet their (potential) customers face-to-face.

“Revenue leaders need the agility to keep pace with today’s fast and ever-changing business environment. They cannot afford to be restrained by rigid and costly to implement tools to manage their sales processes,” said Uri Erde, General Partner at Israel Growth Partners. “RevAmp provides a simple to operate, intuitive, no-code solution that makes it possible for sales organizations to continuously adapt to the modern sales ecosystem. Furthermore, it provides sales leaders the visibility and insights they need to manage and consistently accelerate revenue growth. We’re excited to back the innovation DealHub is bringing to the world of revenue operations and help fuel its growth.”

#articles, #austin, #business, #cloud-applications, #crm, #distribution, #docusign, #enterprise, #freshworks, #funding, #fundings-exits, #general-partner, #israel-growth-partners, #recent-funding, #sales, #salesforce, #startups, #tc

Homeward secures $371M to help people make all-cash offers on houses

Trying to buy a house in a competitive market is perhaps one of the most stressful things an adult can go through.

Competing with a bunch of people all putting offers on a house that fly off the market in a matter of days is not fun. One startup that is trying to give home buyers a competitive edge by giving them a way to offer all cash on a home has just raised a boatload of money to help it keep growing.

Austin-based Homeward, which aims to help people buy homes faster, announced today it has raised $136 million in a Series B funding round led by Norwest Venture Partners at a valuation “just north of $800 million.” The company has also secured $235 million in debt.

Blackstone, Breyer Capital and existing backers Adams Street, Javelin and LiveOak Venture Partners also participated in the equity financing, which brings Homeward’s total equity raised since inception to $160 million. 

Homeward’s model seems to be appealing to both home buyers (including first time ones) and agents alike, with lots of growth occurring since May 2020 when it raised $105 million in debt and equity. The company declined to reveal hard revenue figures but noted that its GMV (gross merchandise value) run rate is up over 600%+ year over year.

Also, as of March, Homeward says it had experienced a 5x increase in the volume of homes transacted and 9x year over growth in the number of new customers. Plus, It’s hired 161 employees since January alone, and currently has a headcount of 203, up from about 33 at this time last year. 

CEO Tim Heyl founded the real estate startup in late 2018 on the premise that in most cases, sellers prefer to receive all cash offers because they are more likely to close. Loans can fall through, but cash is cash.

Heyl started the company after having worked in the industry for the previous decade, first as a broker then as the owner of a title company. During that time, he saw firsthand many of the problems in the industry. And one conundrum he frequently ran into was people not wanting to make an offer on a home without knowing for sure their current house would sell in a certain amount of time. This is a dilemma many are facing during the COVID-19 pandemic as demand outweighs supply in many major U.S. cities.

“The pandemic has greatly increased demand for our product,” Heyl told TechCrunch. “It’s a historic seller’s market with unprecedented demand from buyers and the lowest inventory levels in decades.”

The company plans to use its new capital to “double down” on its offering, scale up to meet “outsized demand” and open additional markets. Currently, Homeward operates in Texas, Colorado and Georgia.

“Right now, we have a waiting list in every market across the country, so this growth capital will enable us to meet that demand,” Heyl said. Its ultimate goal is to open its offering to agents nationwide.

Homeward also plans to double the size of its title and mortgage teams in the latter half of the year so it can offer its clients and partner agents “a single streamlined experience.” It’s also planning to integrate its consumer and internal software systems for approvals, offers and closing “so everyone can be on a single platform and we can eliminate confusion and waste,” Heyl added.

So, how does it work exactly? Homeward will make an all-cash offer on behalf of a customer wanting to buy a house. Meanwhile, that customer can hire an agent (from brokerages such as Redfin or Keller Williams) to list their home with less pressure to sell it in a certain amount of time or at a discounted price. Once Homeward buys a home, it will lease the property back to its customer until they sell their house, get a mortgage, and can buy the property back from Homeward, plus a 2 percent to 3 percent convenience fee. During the process, Homeward offers a predetermined guaranteed price for its customer’s home with the promise that if it’s unable to sell the house for at least that amount, it’ll buy the house from them.

Heyl believes Homeward’s “alternative iBuyer” model is a better deal for customers since it doesn’t purchase a customer’s old home for below market value. The company also works with agents, and not against them, he said. For example, its offerings are available to any agent, but the company “strategically” partners with top brokerages and teams, providing them with what it describes as “dedicated support, white-label branding, and digital marketing tools to help them stand out from the crowd and attract more clients.”

“Most alternatives to traditional real estate minimize or replace the agent,” Heyl said. “But we are agents ourselves, and we’ve built this for agents.”

Homeward is profitable on a per unit basis if you count transaction revenue minus costs to acquire and complete each transaction, according to Heyl. However, it is not yet profitable on a net income basis.

Jeff Crowe, managing partner at Norwest Venture Partners, will join Homeward’s board as part of the funding.

“Homeward is innovating at the intersection of real estate and fintech — that’s the next frontier,” he said. “Homeward’s cash offer addresses real problems for homebuyers in all market conditions, and the team has identified a winning strategy by partnering with agents and their clients.”

Jim Breyer of Breyer Capital describes Homeward as one of Austin’s most innovative companies.

“We are inspired by the company’s mission to build home finance solutions to overcome the limitations of the traditional mortgage and we are proud to support them as they continue to scale rapidly and efficiently,” he said.

#austin, #blackstone, #breyer-capital, #broker, #ceo, #colorado, #economy, #finance, #funding, #fundings-exits, #georgia, #jeff-crowe, #jim-breyer, #liveoak-venture-partners, #managing-partner, #norwest-venture-partners, #proptech, #real-estate, #real-estate-tech, #recent-funding, #redfin, #startup, #startups, #tc, #texas, #united-states, #venture-capital

Workrise, once known as RigUp, raises $300M at a $2.9B valuation

Workrise, which has built a workforce management platform for the skilled trades, announced today that it has raised $300 million in a Series E round led by UK-based Baillie Gifford that values the company at $2.9 billion.

New investor Franklin Templeton joined existing backers including Founders Fund, Bedrock Capital, Andreessen Horowitz (a16z), Moore Strategic Ventures, 137 Ventures and Brookfield Growth Partners in putting money in the round. WIth this latest financing, Workrise has now raised over $750 million.

You may know Austin-based Workrise better as its former name, RigUp. The company changed its name earlier this year to reflect a new emphasis on industries other than just oil and gas after the industry took a beating in recent years.

In 2020, Workrise laid off one-quarter of its corporate employees as the industry took an even bigger hit from the COVID-19 pandemic. It currently has over 600 employees in 25 offices.

Despite the rocky start to the year, Workrise apparently ended up rebounding. Its gross revenue has tripled since 2018, going from just under $300 million to about $900 million to close out 2020.

Workrise was founded in 2014 as a marketplace for on-demand services and skilled labor in the energy industry. In October 2019, it raised a $300 million Series D round led by Andreessen Horowitz(a16z) that valued the company at $1.9 billion.

Since then, Workrise has broadened its reach to include wind, solar, commercial construction and defense industries. In a nutshell, it connects skilled laborers with infrastructure and energy companies looking to staff and manage projects efficiently. Workrise’s online platform matches workers with over 500 companies in its network, manages payroll and benefits and provides access to training.

The company plans to use its new capital to continue to expand into new markets.

“The shift to clean energy and a redoubling of investment in infrastructure are opening up jobs that are desperately in need of filling,” said Workrise co-founder and CEO (and former energy investor) Xuan Yong in a statement. “Our platform makes it easier for skilled workers to find work and for companies to hire in-demand workers.”

Dave Bujnowski, investment manager at Baillie Gifford, points out that Workrise’s online management platform is “disrupting a sector that’s so far been slow to adopt new technologies.”

Workrise now serves more than 70 metro areas in the U.S., including Atlanta, where the company is matching trade workers with commercial construction companies, and in Broomfield, CO where the company trains and matches workers to jobs across the U.S. wind industry. 

The company also offers trade workers access to training that equips them for energy and infrastructure jobs that are on the rise. Last year, Workrise placed more than 4,500 workers, or nearly a third of all its workers placed in 2020, in renewable-energy jobs. 

Specifically, the company says in total, it placed 8,000 unique workers in jobs in 2019 with 13% in renewables. That number jumped to 15,000 in 2020.

#andreessen-horowitz, #atlanta, #austin, #baillie-gifford, #bedrock-capital, #clean-energy, #energy, #energy-industry, #finance, #founders-fund, #franklin-templeton, #funding, #fundings-exits, #hiring, #merchant-services, #moore-strategic-ventures, #oil-and-gas, #on-demand-services, #recent-funding, #startups, #united-states, #venture-capital

Multicoin Capital debuts new $100M fund to bet on crypto startups and tokens

Crypto startups couldn’t be hotter as currencies push past all-time-highs and investor appetite reaches mania for new projects. Crypto investment firms that have been investing in blockchain startups for years are not only beginning to see major movement from their portfolio, but are gaining renewed appetite from LPs after a lengthy crypto winter to make bigger, more audacious bets.

Austin-based Multicoin Capital has been around since 2017 investing in blockchain startups, cryptocurrencies and tokens with a venture fund and separate hedge fund. Today, the firm announced its raise of its second venture fund as it aims to further capitalize on rampant excitement in the crypto world. The new $100 million fund will help the company back new entrants in the space including companies tackling DeFi, digital collectibles, Web3 and crypto-enabled infrastructure.

Multicoin’s team says that it has already been investing out of this fund for several months and it seems the timing is more aligned with the promotion of three of the firm’s employees — Matt ShapiroMable Jiang, and John Robert Reed — to Partner status. The team is just 12, but is looking to expand as they build out their remote presence in other geographies.

The firm’s previous bets include The Graph, Solana, Torus, StarkWare and Arweave, among others.

#articles, #austin, #bitcoin, #blockchain, #cryptocurrencies, #cryptocurrency, #cryptography, #decentralization, #decentralized-finance, #financial-technology, #multicoin-capital, #technology

Homebound aims to help solve Austin’s housing shortage problem

The sheer volume of people migrating to Austin from all over the country, but particularly from the San Francisco Bay Area, has been making headlines for a while now.

One result of this continued migration is a steady surge in housing prices due to increased demand and low inventory that dropped to nearly zero earlier this year. Now, Homebound, a Santa Rosa, California-based tech-enabled homebuilding startup, is entering the Austin market with the goal of helping ease some of the pain felt in the city by offering an alternative to buying existing homes.

Homebound has raised about $73 million over the years from the likes of Google Ventures, Fifth Wall, Khosla, Sound Ventures, Atomic and Thrive Capital. It raised a $35 million Series B last April and then closed on a $20 million convertible note late last year. CEO Nikki Pechet and Atomic managing partner Jack Abraham founded the company in 2017 after Abraham lost his home to wildfires.

Essentially serving as a virtual general contractor, Homebound combines technology and a network for “vetted” and licensed building “experts” to manage the new home construction from the design phase to completion. The startup has developed tools to track and manage hundreds of unique tasks associated with building a home.

Up until this point, Homebound has been focused on helping homeowners navigate the challenges and complexities of rebuilding after wildfires in California. But this month, Homebound will be expanding to Austin, its first non-disaster market, with the goal of taking learnings from those rebuilds and applying the same “streamlined, tech-enabled building process” to make custom homebuilding an option for local homeowners.

I talked with Homebound’s CEO and co-founder, Nikki Pechet, to learn more.

With Homebound, she said, the company is out to serve as a “next gen” homebuilder to make it possible “for anyone, anywhere to build a home.”

Austin’s housing market is definitely overheated, with homes going 10-30% above asking in some cases (I should know, I live here).

“Homeowners have been reaching out to us from across the country asking us to come to their market,” Pechet said. “We’re already seeing Austin grow faster than any of our other markets did in their early days. It’s going to be a huge market for us.”

It’s a model Pechet envisions replicating in other cities with similar housing supply issues such as Miami, Tampa, Raleigh and Charlotte.

“This is just the start,” Pechet said. “We’re taking the platform to markets across the country to help exactly with this issue.”

The company starts by helping a potential homeowner identify land they want to build on, or help them find a lot among the inventory Homebound has already built up. From there, it can help with everything from architectural plans to design to actual construction via its platform. Homebound offers a set of plans for people to choose from, with varying levels of customization.

Building costs for a typical single-family home in the Austin area will start around $300,000 depending on the size, complexity of house, lot size and location. That does not include land cost. Some people are opting to build second units on existing properties.

“In most cases, people can build a new home for less than they can pay for an existing home just because of the dynamics,” Pechet said.

#atomic, #austin, #california, #fifth-wall, #google-ventures, #homebound, #jack-abraham, #model, #proptech, #real-estate, #santa-rosa, #sound-ventures, #startup-company, #startups, #tampa, #thrive-capital

Austin’s newest unicorn: The Zebra raises $150M after doubling revenue in 2020

The Zebra, an Austin-based company that operates an insurance comparison site, has raised $150 million in a Series D round that propels it into unicorn territory.

Both the round size and valuation are a substantial bump from the $38.5 million Series C that Austin-based The Zebra raised in February of 2020. (The company would not disclose its valuation at that time, saying now only that its new valuation of over $1 billion is a “nice step up.”)

The Zebra also would not disclose the name of the firm that led its Series D round, but sources familiar with the deal said it was London-based Hedosophia. Existing backers Weatherford Capital and Accel also participated in the funding event.

The round size also is bigger than all of The Zebra’s prior rounds combined, bringing the company’s total raised to $261.5 million since its 2012 inception. Previous backers also include Silverton Partners, Ballast Point Ventures, Daher Capital, Floodgate Fund, The Zebra CEO Keith Melnick, KDT and others. 

According to Melnick, the round was all primary, and included no debt or secondary.

The Zebra started out as a site for people looking for auto insurance via its real-time quote comparison tool. The company partners with the top 10 auto insurance carriers in the U.S. Over time, it’s also “naturally” evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. It recently launched a dedicated home and auto bundled product, although much of its recent growth still revolves around its core auto offering, according to Melnick.

Like many other financial services companies, The Zebra has benefited from the big consumer shift to digital services since the beginning of the COVID-19 pandemic.

And we know this because the company is one of the few that are refreshingly open about their financials. The Zebra doubled its net revenue in 2020 to $79 million compared to $37 million in 2019, according to Melnick, who is former president of travel metasearch engine Kayak. March marked the company’s highest-performing month ever, he said, with revenue totaling $12.5 million — putting the company on track to achieve an annual run rate of $150 million this year. For some context, that’s up from $8 million in September of 2020 and $6 million in May of 2020.

Also, its revenue per applicant has grown at a clip of 100% year over year, according to Melnick. And The Zebra has increased its headcount to over 325, compared to about 200 in early 2020.

“We’ve definitely improved our relationships with carriers and seen more carrier participation as they continue to embrace our model,” Melnick said. “And we’ve leaned more into brand marketing efforts.”

The Zebra CEO Keith Melnick. Image courtesy of The Zebra

The company was even profitable for a couple of months last year, somewhat “unintentionally,” according to Melnick.

“We’re not highly unprofitable or burning through money like crazy,” he told TechCrunch. “This new raise wasn’t to fund operations. It’s more about accelerating growth and some of our product plans. We’re pulling forward things that were planned for later in time. We still had a nice chunk of money sitting on our balance sheet.”

The company also plans to use its new capital to do more hiring and focus strongly on continuing to build The Zebra’s brand, according to Melnick. Some of the things the company is planning include a national advertising campaign and adding tools and information so it can serve as an “insurance advisor,” and not just a site that refers people to carriers. It’s also planning to create more “personalized experiences and results” via machine learning.

“We are accelerating our efforts to make The Zebra a household name,” Melnick said. “And we want a deeper connection with our users.” It also aims to be there for a consumer through their lifecycle — as they move from being renters to homeowners, for example.

And while an IPO is not out of the question, he emphasizes that it’s not the company’s main objective at this time.

“I definitely try not to get locked on to a particular exit strategy. I just want to make sure we continue to build the best company we can. And then, I think the exit will make itself apparent,” Melnick said. “I’m not blind and am very aware that public market valuations are strong right now and that may be the right decision for us, but for now, that’s not the ultimate goal for me.”

To the CEO, there’s still plenty of runway.

“This is a big milestone, but I do feel like for us that this is just the beginning,” he said. “We’ve just scratched the surface of it.”

Early investor Mark Cuban believes the company is at an inflection point.

” ‘Startup’ isn’t the right word anymore,” he said in a written statement. “The Zebra is a full fledged tech company that is taking on – and solving – some of the biggest challenges in the $638B insurance industry.”

Accel Partner John Locke said the firm has tripled down on its investment in The Zebra because of its confidence in not only what the company is doing but also its potential.

“In an increasingly noisy insurance landscape that includes insurtechs and traditional carriers, giving consumers the ability to compare everything in one place is is more and more valuable,” he told TechCrunch. “I think The Zebra has really seized the mantle of becoming the go-to site for people to compare insurance and then that’s showing up in the numbers, referral traffic and fundraise interest.”

#accel, #animals, #austin, #auto-insurance, #ballast-point-ventures, #connect, #finance, #financial-services, #floodgate-fund, #funding, #fundings-exits, #hedosophia, #insurance, #insurtech, #john-locke, #life-insurance, #machine-learning, #mark-cuban, #model, #recent-funding, #silverton-partners, #startups, #the-zebra, #united-kingdom, #united-states, #venture-capital, #zebra

6 VCs talk the future of Austin’s exploding startup ecosystem

For years now, a growing number of tech companies — large and small — have either relocated their headquarters to Austin or opened another office or campus in the Texas capital. They’ve been drawn to the city for a number of factors, including its laid-back lifestyle, no state tax, a business-friendly environment and lower cost of living (for now).

The impact on the city’s startup ecosystem is noticeable in the growing number of entrepreneurs (many of whom worked at some of the tech giants who have a big presence in the city) and investors calling Austin home.

Most recently, Tesla’s plans to build a gigafactory in the city and Oracle’s announcement that it was relocating its headquarters here have made national headlines.

The comparisons to the Bay Area abound — from the burgeoning and maturing startup scene to an overheated and competitive housing market.

All the while, venture capitalists see several key areas of opportunities. At one point, Austin was once a big enterprise software city. While software is still big here, a number of other sectors are growing including CPG (consumer packaged goods) and real estate tech, among others.

What follows is a survey of some of the top VCs in the city and their projections about the growth of Austin’s ecosystem.

Here’s who we spoke to:

  • Eric Engineer, S3 Ventures
  • Morgan Flager, Silverton Partners
  • Joshua Baer, Capital Factory
  • Carey Smith, Unorthodox Ventures
  • Krishna Srinivasan, LiveOak Venture Partners
  •  Zaz Floreani, Next Coast Ventures

Where do you see Austin’s startup scene five years from now? The city has attracted a wide range of people over the years, including more big tech and startups very recently. How will it add up to something more than the sum of the parts?

Eric Engineer of S3 Ventures believes that by 2030, the Texas startup ecosystem could be the country’s second largest.

“Tech ecosystems benefit from virtuous cycles. As more talented people move to Texas, more capital will follow them, which will then attract more talent, and so on,” he said.

Morgan Flager of 16-year-old Silverton Partners says since Silverton’s inception more than 16 years ago, the state’s largest VC firm has always bet on Austin and, more broadly, on Texas.

“We’ve always felt that if Austin wins, we win, and that’s how we’ve run our business,” he says. “But we are just one organization, and now we are joined by many others who are also betting on Austin and want to do their part to make this ecosystem better…Moving forward, a critical component of success is fostering this existing philosophy of community collaboration, which has already played a part in making Austin such an attractive place to be. Austin is a place where people want to succeed by helping their community succeed, and they aren’t willing to sacrifice the former for the latter. If we continue to hold on to that core philosophy as we grow, we’re in for an amazing future.”

Joshua Baer of Capital Factory believes that in 5 years from now, Austin will have gone from “up and coming” to “arrived” and from the top of the Tier 2 cities to a competitive Tier 1 city. Two of the big signs of this, he predicted, will be a new cohort of Austin unicorns from the likes of Aceable, Apptronik, Disco, Eagle Eye, Everlywell, ICON, and Zen Business combined with big Series A funding rounds of the likes the city has not seen since the days when there was only one big VC firm in town called Austin Ventures.

Unorthodox Ventures Founding Contrarian Carey Smith hesitates to predict, noting that it’s hard enough just to characterize the scene as it is right now.

“There are so many companies of so many different sizes doing so many different things, and there isn’t really a unifying characteristic beyond growth and innovation. It really could go any direction,” he says.

LiveOak Ventures’ Srinivasa points out that Texas has tremendous number of Fortune 500 companies and, as a result, folks with deep domain in major industries such as energy, healthcare, real estate, hospitality and retail.

“This domain knowledge when cross-pollinated with the surging tech talent from big tech and startups has already had a multiplicative effect and is further accelerating entrepreneurial activity,” he said. Besides big tech talent and the continued maturation of the current startup ecosystem that is already underway, we will all continue to spawn an even greater number of incredible category leaders in the years to come. As such, we feel the Austin startup scene is poised to grow faster than ever before.”

Floreani of Next Coast Ventures projects that in five years, Austin will see signs of a maturity of the current market with potentially half a dozen unicorns and half a dozen startups finally going public.

Remote work is pushing and pulling the global workforce. This means that some offices will disappear from Austin, even with more companies moving in, but also more locals who work remotely for companies elsewhere. How do you see these factors impacting the city’s tech evolution?

Eric Engineer of S3 Ventures says that talented people are choosing Austin because of all it has to offer from a lifestyle perspective – not just the job. He believes remote work could ease some of Austin’s growing pains as workers will commute fewer days per week. That will give the city more time to develop the additional transportation infrastructure it needs to handle the continued growth, Engineer said.

Silverton Partners’ Flager thinks remote work shifts the playing field some because it allows workers more choice with respect to where they want to live versus where they have to live to get the job they want.  And while it will give people more freedom and make certain things we do more efficient, he thinks most roles will require a hybrid solution where remote work is complemented by in-person interactions. “Thankfully, Austin has both — it is a desirable place to live and it has a rapidly growing tech community,” he said. “This is part of the reason we’re seeing such an influx of talent moving here at the moment.”

Joshua Baer believes that when people can work anywhere, they won’t actually work everywhere. He thinks there will be big winners that attract much more talent than other places, and that Austin will be one of the biggest winners in the tech migration of the next 5 years. “More companies will move their headquarters here, and more people will choose to work here for offices that have headquarters elsewhere,” he predicts.

Remote work doesn’t work for Unorthodox Ventures’ Carey Smith and he doesn’t believe it will work for Austin long-term. When he briefly worked from home at the start of the pandemic, he felt far less connected to the people I work with — and yet was even busier as remote work added “so much difficulty to even simple tasks.”

“I really thrive with face-to-face meetings and appreciate the hustle and bustle of the office. It keeps all of us motivated,” Smith said. “In short, it’s the lubricant that keeps my wheels turning, and I think it’s required to keep driving innovation in Austin.”

What industry sectors do you focus on within Austin (and beyond)? What is happening in Austin now that you’re most excited to fund?

Over the past 15 years, S3 Ventures has primarily investing in B2B software companies (two-thirds of its portfolio are in this space). But it has also had successful exits in consumer digital experiences and healthcare.

“Texas has an incredibly diverse economy, and so the technology innovation is also broad-based,” Engineer said. “We are seeing huge sectors of the economy (financial services, real estate, health care, education, skilled trades, hospitality, industrial, energy, manufacturing) that were slower to digitize, now start to embrace cloud-based solutions across their entire organizations.”

Silverton Partners has always been a generalist fund. That said, there are several dislocations occurring at the moment that are hard for the firm to ignore, according to Flager. Specifically, he said, there’s rapid disruption in digital health, fintech /insurtech, and education. “The playbooks in these massive industries are being rewritten and we are certainly looking for entrepreneurs who have a strong point of view relative to what the future will look like,” Flager added.

Capital Factory’s Joshua Baer believes the variety of the city’s startup scene is part of what makes it so vibrant. “If it’s hot in tech, it’s happening in Austin,” he said. Some of the areas that have been big recently include artificial intelligence and machine learning, consumer packaged goods, drones, e-commerce, healthcare, marketplaces, robotics and SaaS.

Unorthodox Ventures’ Carey Smith said his firm is focused on investing in companies making tangible products that solve real problems. And unlike many other VCs in the city, and even though it’s a big part of the culture in Austin, he’s not a fan of software. “I prefer the challenge of manufacturing consumer goods,” he said. “Beyond that, software companies lack diversity and only benefit a small sliver of society with the jobs they create. Manufacturing, on the other hand, helps everyone from GEDs to PhDs.”

LiveOak Venture Partners invests across pretty much all industries. In the past year, it has backed companies in proptech, fintech, retail, supply chain, business compliance, cyber security and edtech.

Proptech, in particular, is exciting to LiveOak, and the city has seen success in companies such as Opcity and OJO Labs. Another area with big potential are startups working in legal/compliance. Disco and Mitratech are large companies headquartered in Austin and there are exciting fast growing newcomers like Osano, Eventus and Litlingo.

For Next Coast’s Floreani, the increased number of successful B2C startups in Austin hitting scale is promising “as it cements our talent pool and secret sauce beyond Austin’s early days of being know as a semiconductor and SaaS town.”

“We still have great software entrepreneurs but we also have the DNA to do consumer and media if you consider EverlyWell, Literati, FloSports, Atmosphere, to name a few,” she said.

What are some of the local challenges you’ve encountered or seen founders struggle with? More generally, how should people looking to hire in, invest in, or relocate to Austin think about doing business in the city?

The general consensus among local investors is that Austin’s tech community is welcoming and collaborative and that they all went to serve as a resource to anyone thinking of moving to the city. S3 Ventures’ Engineer said his firm has had several recent transplants from both coasts share how they were pleasantly surprised by this culture – especially compared to what they were used to.

Silverton’s Flager acknowledges that moving is always a challenging event, but moving during COVID is certainly a class of its own.

“I’ve seen some founders struggle with finding strong community ties after relocating to Austin in the midst of a pandemic,” he said. “Almost everything is virtual and that makes integration with a new ecosystem more difficult. Part of my role as an investor and steward of the Austin ecosystem is to facilitate more connectivity within the founder community. As the vaccine rollouts continue and in-person contact becomes safer, Silverton is planning to host a series of community building events to better integrate founders moving here.”

Capitol Factory’s Baer believes Texas investors think about loss prevention more than their peers in Silicon Valley. His advice to companies? Develop two different pitches and know who you are pitching to. “The Texas pitch talks about how you have de-risked the business and the Silicon Valley pitch talks about how big this could be if it works,” he said.

For Unorthodox Ventures’ Smith advises founders to be careful of organizations in Austin or elsewhere that look to help entrepreneurs while “taking equity and not giving enough in return to justify it.”

“Founders need to make sure they are selective about the investors and advisers they take on and that they choose people who offer more than just capital,” he said.

LiveOak Ventures’ Srinivasa warns that people in Austin are not transactional and that if you come across as being transactional and strictly interact with somebody in a transactional way and not a relational way, “it rubs people the wrong way.”

“Outsiders need to be aware of this when they come here,” he said. “When making a hiring decision, it’s important to choose someone who is a good cultural fit, and not hire based solely on resume. From an investor perspective, if you want to do business here, it’s important to focus building strong relationships, besides offering attractive deal terms.”

Next Coast Ventures’ Floreani notes that hiring growth leaders has been a consistent challenge across her firm’s portfolio. “It would be great if Austin had a deeper bench of talented marketing and sales leaders,” she said.

Who are key startup people you see creating success locally, whether investors, founders or even other types of startup ecosystems roles like lawyers, designers, growth experts, etc. We’re trying to highlight the movers and shakers who outsiders might not know.

S3: Founders/CEOs – Leo Resig (Atmosphere), Jag Bath (Favor), Kim Rodriguez (Acessa), Doug Donovan (Interplay Learning), Richard Lebovitz (LeanDNA), Adelle Archer (Eterneva), Andy Ambrose (LiveOak Technology), Adam Berman (TVA Medical), Dion Cornett (Liquibase)

Investors – Rosa McCormick (Wild Basin), Oksana Malysheva (Sputnik), Adam Lipman (Ecliptic Capital), and Josh Baer / Bryan Chambers (Capital Factory)

Service Providers – Marc Nathan (E/N), John Gump (CBRE), Lathrop Smith (MLR), Austin Willis (SVB), Paul O’Brien (Mediatech)

Silverton: Heather Brunner and Jason Cohen @ WP Engine, Chuck Gordon and Mario Feghali @ Sparefoot, Jess Ewing @ Literati, Blake Garrett @Aceable, James Garvey @ Self Financial, Brian Cruver @ Alert Media, John Banczak and T.J. Clark @ TurnKey, Michelle Davey @ Wheel, Rob Taylor @ Convey and several others. 

Capital Factory: http://baer.ly/austinabc

Unorthodox Ventures: Christa Freeland built ATX Kit, a startup that supports more than 40 local food entrepreneurs with her Austin-centric snack boxes.

Bob Bridge and the Southwest Angel Network (SWAN) support startups aiming to solve serious societal challenges, including environmental, health and social justice issues.

LiveOak:  We are fortunate to have many movers and shakers here in our network. We do not wish to include one at the expense of another; that being said, we do want to recognize Dan Graham, who funds social impact startups through Notley Ventures, who has launched a fund to invest in women entrepreneurs, via the BEAM Angel Network and has played an active role in the emergence of CPG. Jim Breyer has been here for only a year and in that period has been an incredible advocate in op-eds, blog posts and interviews for Austin, the local startups and the energy of this town. That has been a big positive addition.

NextCoast Ventures: The founders of these startups have incredible growth plans for Austin: EverlyWell, Upequity, Steadily, Eterneva, Literati, FloSports, and Enboarder. Please note I may be a bit biased here as most of these are companies we have backed.

What do you think of comparisons to Silicon Valley? What impact do you think the influx of (big & small) tech companies is having on the city’s startup scene?

S3’s Engineer believes there is only one Silicon Valley, and that it is highly unlikely there will be anything comparable in the Western world.

But he thinks that while much smaller today, if the trends continue over the next ten years, the Texas ecosystem has a real shot at growing as large, if not larger, than New York and Boston.

Silverton’s Flager was born and raised in Silicon Valley. He went to school there and worked there as well. As a result, he’s not a big fan of the comparison.

“Each place is distinct with different pros and cons,” he said. “Will Austin ever overtake Silicon Valley in terms of size and activity? I really don’t know — we certainly have a long way to go. To some extent, I’m not sure that matters.”

What he does care about is that Austin retains its vibrant character and that its current growth enriches the city, rather than dilutes its energy. “It’s important to recognize that Austin’s culture has not been tech-centric,” Flager said. “Austin is a unique powerhouse of live music, great food, arts, outdoor living and ‘keeping it weird.’ ”

He adds: “As I contemplate what I admire about Silicon Valley and all the things Austin needs to do to be at that level, I tend to spend as much time thinking about what we could do differently.”

Unorthodox Ventures’ Smith believes it’s no surprise that “everyone wants to leave Silicon Valley.

“They finally figured out it’s a disaster,” he said. “As more intelligent, hardworking and curious people gather here, it’s a good thing for Austin and for VCs more broadly. One of the problems with Silicon Valley is that such a strong percentage of VC money stays there or in New York or Boston. We need more capital in Austin and other innovative cities throughout Middle America where we’re solving real problems for the everyday American. As Austin feels more and more influence from Silicon Valley, it’s so important to fund more than tech-oriented projects. Venture capitalists need to focus on basic human needs, too.”

LiveOak’s Srinivasa knows that comparisons to Silicon Valley are inevitable, and for the most part welcome when those comparisons bring broader national and international attention to Austin and reinforces its reputation as a city with a booming startup scene.

“There’s a lot of vibrancy and momentum to the startup scene here that is reminiscent of the early days of Silicon Valley — the growing number businesses being launched, the number of companies being funded, the amount of talent flowing here eager to engrain themselves in the tech community,” he said. “Yet we know there is something unique to Austin that sets it apart from any other tech hub—the collaborative spirit of the people here. There’s also an energy and excitement in this community that’s palpable. Austin has great respect for the successes Silicon Valley has brought forth, and we will incorporate their positive aspects, while forging our own path.”

Next Coast’s Floreani believes that comparison has been overused for a decade. “We are not Silicon Valley and will never be it,” she says. “I am not saying that in a negative sense. I grew up in the Bay Area. I simply believe we grow companies differently here and even though more SV talent and investors are coming to town I don’t think we will suddenly shift to a more Valley like approach to growing companies like blitz-scaling. Rather I think we will find a happy medium that incorporates fast growth and sustainability.”

#austin, #tc, #vc-survey

Everlywell acquires two healthcare companies and forms parent Everly Health

Austin-based home lab testing kit startup Everlywell is expanding its scope considerably with two acquisitions, and a transformation that includes the establishment of a new parent company led by Everlywell CEO and co-founder Julia Cheek. The new entity, called Everly Health, will now offers services including at-home lab testing kits and education, population-scale testing through a U.S.-wide clinician network, telehealth and payer-supported/enterprise self-collected lab test.

This is a big move for Everlywell, which was found in 2015 (and which was a finalist in TechCrunch’s 2016 Disrupt SF Battlefield completion). The company has steadily iterated on its offerings, expanding its at-home testing from fertility products, to food sensitivities and allergies, and last year, to at home COVID-19 test collection.

Everly Health’s business now includes not only that kind of at-home consumer diagnostic and personal health education, but also many relationships through PWNHealth, which will rebrand to Everly Health Solutions, with health plans, employers and labs across the U.S.

Everlywell itself was actually a longtime partner of PNWHealth, which is what Cheek told me an in interview actually helped make the acquisition make so much sense to both companies. They’d been working together for years, and that collaboration had only deepened in the wake of the COVID-19 pandemic.

“What we found over the last year, was we were collaborating on all these different enterprise partnerships to offer solutions, and so our cultures are really well aligned, and our teams have worked closely together,” she said. “And we both share this common ethos that we felt the urgent need to help people and to save lives, but also this discipline around consumer-friendly and enabled care, grounded in diagnostics.”

Overall, Cheek said that the decision to go out and acquire the pieces of the puzzle needed to deliver a more comprehensive care offering was partly driven by the pandemic, but that really just drove an acceleration of what Everlywell was already beginning to see before COVID-19. Freshly capitalized with the $175 million it raised last December, the startup was in a position to make some bold moves in order to make the most of the moment.

“Before the pandemic, but especially during and looking out to post-pandemic, we have just seen this massive acceleration of the need for consumer friendly testing services,” she said. “Our business has continued to grow exponentially, even since normal doctor’s appointments resumed, orders of magnitude, 300% growth. We sat back and said, since we believe healthcare is in a watershed moment post-pandemic, where do we think we need to actually be to be able to offer a full-service diagnostic solution as this entire space grows. So it’s Everlywell as a consumer friendly brand, but it’s also this massive enterprise need for home testing, and broader consumer diagnostics.”

The new acquisitions do add some complexity to Everly Health’s business, since its Everly Health Solutions also serves a number of customers that would be considered competitive with Everlywell. Cheek points out that both businesses have a demonstrated track record of security and data integrity, compliant with HIPAA standards, and says that they’re setting up a strict firewall that will result in “complete data independence” of Everly Health Solutions to ensure there’s no possibility of anti-competitive behavior.

The companies will however share customer experience, design and product resources, however, and the plan is to build a unified brand focused on high-quality customer engagement across the board.

Everly Health hasn’t released the financial details of the transaction, but it has shared shared that PWNHealth CEO Sanjay Pingle will be acting in a transitional role in the combined company for the time being, and will serve on the board of Everly Health. Investors in PWNHealth, including Spectrum Equity, and Blue Cross/Blue Shield corporate VC Blue Venture Fund will also retain an ownership stake in Everly Health.

#acquisitions, #articles, #austin, #battlefield, #ceo, #everlywell, #firewall, #healthcare, #ma, #science-and-technology, #spectrum-equity, #tc, #technology, #telehealth, #united-states

Planting seed investments on tech’s frontiers nets KdT Ventures $50 million for its latest fund

Like other venture investors over the past year, Cain McClary, co-founder of the investment firm KdT Ventures, recently made the jump to Austin. But unlike the rest of them, he was coming from Black Mountain, NC.

McClary had spent the better part of the last three years with his co-founder Mack Healy building out a portfolio that would be the envy of almost any investor looking at financing startups whose businesses depend on innovations at the borders of current technological achievement.

Since 2017, when the firm closed on the first $3.5 million of what ended up being a $15 million fund (they had targeted $30 million), McClary and Healy managed to find their way onto the cap table of businesses like the green chemicals manufacturer, Solugen; health diagnostics technology developer, PathAI; the Nigerian genetic dataset developer, 54Gene; the novel biomaterials developer, Checkerspot; and the genetics-focused therapy company, Dyno Therapeutics. 

That portfolio — and the subsequent top decile performance that Cambridge Associates has said comes with it — has allowed McClary and Healy to close on an oversubscribed $50 million new fund to invest in promising startup companies.

KdT co-founders Cain McClary and Mack Healy. Image Credit: KdT Ventures

Hailing from a small Tennessee town outside of Leipers Fork (itself a small Tennessee town) McClary studied medicine at Tulane and business at Stanford where he linked up with Healy through a mutual friend.

Healy, who had done stints throughout big Bay Area startups like Airbnb, Databricks, and Facebook brought the software expertise (and some capital to stake the firm) while McClary provided the life sciences know-how.

Together the two men set out to hang their investment shingle at the intersection of software and life sciences that was proving to be fertile ground for new business creation. Each company in the firm’s portfolio depends on both the advances in understanding how to code computers and living cells.

McClary had left California for personal reasons when he launched the fund in 2017 and in 2020 relocated to Austin for professional ones. Healy had already set up shop in the city and it was easier, McClary said to fly out to San Francisco to look for companies from the Austin airport than it was from Ashville.

Also, both men were placing big bets on the Dell Medical School at the University of Texas to become the breeding ground for the type of entrepreneurs that the firm is looking to back.

Mack was there… the Dell Medical School and we think it’s going to be produce the types of entrpereneurs that we want to support. Houston has a med system. I firmly believe that texas has a place at the table in the future 

“The way that we define it is that we like to invest in the physical layer of the world,” said McClary. “That includes not only medicine, but chemicals and agriculture. All of that is driven by some of the things that we have this sourcecode for the physical world.”

Mapping the unmapped corners of the frontier tech startup world means that the firm not only has a presence in Austin, but has hired principals to scour Houston and Research Triangle Park in North Carolina for hot deals.

That doesn’t mean the firm is forsaking California though. One of the most recent deals in the KdT portfolio is Andes Ag, an Emeryville, Calif.-based startup that’s applying yield-boosting microbes directly to seeds in an effort to improve crop performance for farmers.

“The KdT team speaks the language of science, making them an outlier in this area of venture investing,” said JD Montgomery of Canterbury Consulting, a limited partner in KdT’s first and second fund. “They are passionate about building the science companies of the future that will tackle some of the significant challenges our world faces in the next decade and beyond.”

#54gene, #airbnb, #austin, #california, #cambridge-associates, #chemicals, #co-founder, #corporate-finance, #databricks, #dell, #economy, #entrepreneurship, #facebook, #finance, #fork, #houston, #money, #north-carolina, #partner, #pathai, #private-equity, #san-francisco, #solugen, #stanford, #startup-company, #tc, #texas, #tulane, #university-of-texas, #venture-capital

Chicago Ventures raises $63M to back seed-stage startups located anywhere but Silicon Valley

Buzzy mega-rounds and high-profile IPOs often dominate headlines. But many of those companies were once early-stage and scrapping to raise a seed round.

Today, Chicago Ventures, a VC firm that often leads seed-stage rounds, announced the close of its third fund — a $63 million vehicle that it’s already put to work.

Chicago Ventures (which is based in Chicago, where else?) has a very specific set of criteria when it looks to back companies. For one, as mentioned, it not only wants to back seed-stage startups, it usually leads those rounds. The firm is targeting 25 investments out of its new fund with an average check size of $1.5 million to $2 million.

As evidence, it has so far backed 11 companies out of this third fund, leading 10 of those rounds. The startups include CognitOps, CoPilot, Forager, Interior Define, NOCD, OneRail, PreFix and Ureeka.

The firm also is focused on investing in companies located out of the traditional hotspots of Silicon Valley and New York. Six of its most recent investments were in Chicago-based startups, two in Austin (where it recently opened an office), one in Orlando, Florida, and one in Los Angeles.

Chicago Ventures prides itself in identifying, and backing, “overlooked” companies. It was founded in 2012 under the premise that enduring companies could be built “anywhere” and not restricted to “a few select area codes.”

“Only a handful of funds consistently lead seed rounds. Tag-along, momentum-based investing is the norm,” the firm said in a statement. “The industry’s attention still converges on industries and geographies with rich histories of innovation. We fill these gaps. We lead seed rounds before it’s obvious, and serve as active, operationally-involved partners during a company’s earliest days. We invest off the coasts.”

Since its inception, the firm’s portfolio companies have raised more than $1.5 billion in follow-on capital. Seventeen of those companies are now valued over $100 million, including Cameo, business software marketplace G2 and logistics software company project44.

Chicago Ventures closed its second fund in 2016 — which included a $60 million main fund and a $6 million sidecar fund. The firm opted not to go the sidecar route this time around. 

In conjunction with the new fund, Chicago Ventures also announced that it has promoted Peter Christman and Lindsay Knight to partner. Christman leads investments in companies rebuilding old-line enterprise workflows and consumer products expanding access to care and financial well-being. Knight leads the firm’s post-investment operations, including talent, business development and functional best practice sharing.

Chicago Ventures has also named Jackie DiMonte to the team as a new partner. DiMonte comes from Hyde Park Venture Partners, where she led early-stage, enterprise investments. An engineer by training, DiMonte is based in Austin, where Chicago Ventures has made 10 investments since 2015.

In 2020, the dollars invested into seed-stage startups in the United States had an up-and-down year that TechCrunch explored in this piece. Also, the pattern of rising seed-check sizes seen in prior years continued, despite the tumultuous business climate.

#austin, #chicago, #chicago-ventures, #funding, #venture-capital

From food delivery to housing: Former Favor founders raise millions for Sunroom Rentals

Real estate tech startup Sunroom Rentals, which leases units on behalf of property managers and apartment owners, has raised $11 million in a Series A round of funding led by Gigafund.

Ben Doherty and Zachary Maurais, former founders of the delivery app Favor, launched Sunroom in May 2018 with the mission of “boosting the profitability” of mid-size property managers and apartment owners by giving them a way to outsource their leasing operations.

The pair sold Favor to Texas grocer H-E-B in 2018 and soon after shifted their focus on building out Sunroom. The Austin-based company has developed an app that it says gives renters a way to tour, apply for and lease a unit “entirely online.” COVID-19 has led to more renters wanting virtual ways to explore and secure rental units. Mobile-first, Maurais noted, is particularly appealing to millennials and Gen Zers.

“Personally, we love to create products that fulfill consumer’s most basic needs,” said Maurais, the company’s president. “With food under our belt, we decided to focus on housing.”

While one might wonder what the parallels between food delivery and housing might be beyond fulfilling consumers’ needs, CEO Doherty said the rental market in 2021 looks a lot like the food delivery market in 2013.

“In 2013, Grubhub had successfully put many restaurant menus online, but most of the transactions and delivery process was still offline,” he told TechCrunch. “We’re in a similar position with the rental market, as the majority of rental listings are online, but touring, applying or leasing units is still done offline.”

Since its launch, Sunroom Rentals has signed more than 2,000 leases and had over 100,000 renters sign up for its services in fast-growing Austin, where it focused its initial efforts.

“According to the U.S. Census, that represents roughly 10% of renters in the greater Austin metro,” Maurais said. “Instead of going shallow and wide nationally, we decided to go deep in markets, in an effort to gain network effects, which was a strategy that worked well for us at Favor.”

Sunroom Rentals claims that it’s leasing units five days faster than the market average. This benefits property managers, Doherty said, because they can grow quicker “while improving leasing performance.”

Looking ahead, the company will use the funding to expand across Texas, including in Houston, San Antonio and Dallas. It will also invest in its partner portal, which aims to give owners and property managers a way to view real-time data on leasing performance.

Sunroom Rentals currently has 18 employees with the goal of more than doubling its headcount this year. It’s in particular looking to hire across its engineering, product and sales departments.

As mentioned above, Gigafund led the Series A financing, which included participation from NextGen Venture Partners, Calpoly Ventures and a slew of angel investors, including Gokul Rajaram (Google & Square) and Homeward’s Tim Heyl, among others. Existing backers include Founders Fund Seed, Draper Associates, Boost VC and Capital Factory (among many others). The round marked Sunroom’s first “priced” round, meaning the first time it’s given up stock.

Jonathan Basset, managing partner at NextGen Venture Partners, believes Sunroom was essentially in the right place at the right time and “on trend with touchless leasing even before COVID hit.”

“I watched them build a profitable consumer marketplace in a competitive market with Favor and was impressed with them as operators,” he said. “These businesses have a surprising amount of similarities and I’m confident they can rise to the challenge.

Last week, TechCrunch reported on the raise of another startup operating in this increasingly crowded space. Seattle-based Knock — a company that has developed tools to give property management companies a competitive edge — raised $20 million in a growth funding round led by Fifth Wall Ventures.

Knock’s goal is to provide CRM tools to modernize front office operations for these companies so they can do things like offer virtual tours and communicate with renters via text, email or social media from “a single conversation screen.” For renters, it offers an easier way to communicate and engage with landlords.

Maurais said the two differ in that Knock is a CRM built for leasing agents with a SAAS model where as Sunroom is a marketplace, where renters match, tour and apply with partnered properties.

“Sunroom also provides a suite of leasing & analytics software to its partners and generates both transactional and subscription revenues,” he added.

#austin, #favor, #founders-fund, #funding, #gigafund, #nextgen-venture-partners, #property-management, #real-estate, #recent-funding, #renting, #startups, #sunroom-rentals, #texas, #venture-capital

Will the Texas winter disaster deter further tech migration?

Austin is known for its usually mild winters. But on February 12, a winter storm hit the state — leading to over a week of freezing temperatures. This has resulted in a statewide disaster with millions of Texas residents losing power or water, or both.

It’s too early to tell the exact toll this has all taken in loss of life, property damage and economic activity. But it’s clear that this disaster is, and will continue to be, devastating on many levels. Austin-area hospitals even lost water this week, as an indication of how bad things have been.

Since last Thursday, my own household lost power and got it back multiple times. On February 17, we lost water, with no idea of when it will be restored. I realize there are many worse off than me, so I’ll spare you the pity party, but it’s definitely been a humbling experience. Boiling snow/ice for toilet water and rationing the little bottled water we had left with fear of frozen/bursting pipes. At least we have been warm the past couple of days, as many still don’t have power.

Meanwhile, over the past few months (and years, really), Austin has been making headlines for other news — namely the fact that so many tech companies, founders (ahem, Elon) and investors are either moving their headquarters here (Oracle), building significant factories (Tesla) or offices (Apple, Google, Facebook) here, or are thinking about relocating entirely.

The lack of state income taxes has been a big draw, as well as the housing/land/office prices that are affordable when compared to those in the Bay Area. This is nothing new, but only accelerated as the pandemic has encouraged/forced more remote work.

Ironically, some of the very things that have led to the state being more attractive to companies have also contributed to the crisis: Fewer taxes means less money for infrastructure, for one.

But it goes beyond that. Many other states have had freezing cold temperatures without the loss of power and water that Texas is currently experiencing. As The Washington Post reported earlier this week, the state’s choice to deregulate electricity led to “a financial structure for power generation that offers no incentives to power plant operators to prepare for winter. In the name of deregulation and free markets, critics say, Texas has created an electric grid that puts an emphasis on cheap prices over reliable service.”

Even Elon shared his disappointment on Twitter:

It’s fair to say Texas has attracted widespread criticism of its handling of this new crisis — both in terms of its lack of preparation and mismanagement (Sen. Cruz, we’re looking at you). But are the events of the past week going to take away some of the shine on Austin as a potential relocation destination for tech and investors? Will this deter people from wanting to move here? Isn’t it also ironic that some folks who didn’t want to move here due to the scorching summer temperatures are now also slamming the city/state for the impacts of a major winter storm?

So I did what many other enterprising tech reporters might do in this situation, and took to Twitter. The results were pretty much as expected — varied and passionate on either side.

There were many tweets from Austinites who defended their city and praised how its residents have come together during crises:

Then there were some tweets from people who lived here but are disgusted and disappointed:

There were also some tweets from others who said they were so turned off they’d never contemplate moving to Texas or that they were dismayed by the lack of preparation:

And there were those who don’t live here but scoffed at the notion that this was enough to keep people away, while others pointed out that natural disasters happen all over:

Then there were those who joked that the disaster was engineered as a ploy to “keep California people away,” or at least might have that effect:

I have lived on all three coasts — East, West and Gulf. There are pluses and minuses to each. This likely is enough of a deterrent to keep people away. But I will say that the state could — and should — have been more prepared when it decided to deregulate electricity. I am heartbroken at all the suffering people in the city and state are dealing with and for now, just want to see things get back to “normal” as soon as possible so the only crisis we’re dealing with is the COVID-19 pandemic. Never thought we’d look back fondly on those days.

Here’s to hoping that migration of techies can build solutions that could maybe help prevent similar disasters in the future.

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