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As is pretty typical, it鈥檚 been an up and down year when it comes to venture funding for Austin startups.

After a super sluggish September, during which seven companies raised a mere $64.8 million, the Austin startup scene rebounded nicely in October. According to 小蓝视频色情网页版 data, 18 companies with headquarters in the Texas capital brought in a total of $473.1 million in October alone.

There were a couple of large rounds that helped contribute to this total. We covered $300 million raise, which made the company Austin’s newest unicorn. We also wrote about AI startup $100 million in 聽Series C financing led by 聽that included participation from 聽Combined, the rounds represented the two largest funding rounds raised by Austin startups in all of 2019. They also helped make October by far the best performing month for Austin in 2019 as a whole so far, as you can see in the chart below. For further context, October鈥檚 dollar total was more than June-September combined.

But there were other notable rounds raised in October that weren鈥檛 nine figures. Those include freight trucking startup and children’s subscription book service $12 million Series A, which we covered here.

October鈥檚 strong performance puts Austin on track to possibly reach $2 billion for the year, which is pretty impressive. In total, Austin startups raised a total of $1.7 billion from January to October. By comparison in 2018, Austin鈥檚 amounted to $1.55 billion, according to 小蓝视频色情网页版 data.

Earlier today, I wrote about how Austin-based not only raised $10.5 million, but also reached profitability earlier this year. And in April, we examined how tech companies 鈥� big and small 鈥� are increasingly moving, or opening offices in, Austin. But the way funding was going for much of the year, I was concerned that some of the hype around the city鈥檚 startup scene was well..just hype. But I鈥檓 encouraged by these numbers and have a feeling this is just the beginning of a ramp-up for the city when it comes to venture funding.

Photo Credit: Mary Ann Azevedo

Data/Chart Credit: Jason Rowley

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For $9.95 per month, Literati curates a box of books based on age along with custom artwork and personalized book labels. Readers have seven days to try out the books and buy those they want to keep. Customers can send back any books they no longer want via a prepaid return box, and Literati will donate them. The company says it鈥檚 donated more than 18,000 books to charities so far in 2019.

A slew of other investors participated in the financing, including of (and former CEO), as well as and , founding partners of , Dan Graham of Austin’s , founder , founder , Allan Hubbard (former director of the National Economic Council) and follow-on investments from and . Literati also received funding from at , which is backed by comedian and late-night host .

In a , Literati says it will use its new capital to 鈥渟trategically grow the business and also hire new talent in Austin.鈥�

“Our mission is to build a lasting company that stands for lifelong learning and sparks revolutionary excitement in books and literature,” Ewing said in a statement. “We want to build consumer products that make life more meaningful, not merely more efficient.”

The company points to indicating that providing a steady stream of new age-appropriate books has been shown to nearly triple interest in reading within months.

I reached out to the company for more specifics around growth and a spokeswoman told me via email: 鈥淲e aren鈥檛 releasing specific subscriber and revenue numbers, but because subscriber growth and revenue go hand in hand in the subscription business, Literati has grown 10x between our last Seed Round and this Series A.鈥� She added that headcount is currently 40, up from about 10 one year ago.

Investors Weigh In

Trivedi said he鈥檇 been looking for the 鈥渘ext great consumer subscription business.鈥� In the past, he鈥檇 invested in (which was by for $1 billion in 2016), and .

“The book market is massive, and Literati’s growth, customer love, and mission really blew me away as I spent time with Jess, Kelly, and the Literati team,鈥� said Trivedi, who is joining 尝颈迟别谤补迟颈鈥檚 board as part of the funding.

Meanwhile, Costolo pointed to Literati as 鈥渁 shining example鈥� of 鈥渢he innovative new companies that are being built outside of Silicon Valley.鈥� (Read more here about how Austin is becoming a growing tech hub).

He added: 鈥淛essica’s vision for the company is expansive and inspiring, and it is revolutionizing one of the last undisrupted media channels – the massive books market.鈥�

Springdale Ventures invested in Literati, according to Graham,聽because of its “amazing founder team, game-changing vision for publishing and book purchasing, exciting product roadmap, growth to date, and incredible unit economics.”

Blog Roll Illustration:

Two days ago, we wrote about AI startup $100 million Series C.

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Now, , an Austin-based marketplace for on-demand services and skilled labor in the energy industry, has raised a $300 million Series D round led by (a16z). The round values the company at $1.9 billion, according to the . It also marks the largest funding round raised by an Austin company in 2019 so far, according to 小蓝视频色情网页版 data.

Existing investors , and also put money in the round in addition to new investors UK-based and Brookfield Growth Partners.

搁颈驳鲍辫鈥檚 Series D comes just nine months after its $60 million . Since its inception in 2014, the startup has now raised more than $450 million.

搁颈驳鲍辫鈥檚 platform matches contract workers with energy companies operating in the upstream, renewables, midstream, and downstream sectors. The company said that it expects to exceed $2 billion in gross service volume on its platform this year, up more than 200 percent from 2018.

, general partner at Andreessen Horowitz, will join 搁颈驳鲍辫鈥檚 board, as part of the financing.

In a prepared statement, George said that RigUp stands out in the energy labor market 鈥渨ith much needed technology鈥� that 鈥渇undamentally allows for better matching of supply and demand, resulting in significantly improved time-to-hire and visibility for both the independent contractors searching for the right projects and the energy companies looking to fill jobs with higher quality personnel.鈥�

More than 5,000 contractors and over 250 energy companies and operators use the platform, which operates under the premise that blue-collar labor is difficult to find and in high demand.

鈥淔ield work, largely performed by a workforce of highly-skilled independent contractors, has typically been staffed through a fragmented network of small brick-and-mortar firms,鈥� said RigUp CEO and co-founder (and former energy investor) . 鈥淭hat鈥檚 inefficient for the companies that need to quickly staff projects and manage labor costs, and it doesn鈥檛 give independent contractors access to all available opportunities.鈥�

Its platform is appealing to field workers, according to a16z鈥檚 George, who said in a : 鈥淣ot only do workers have faster access to the roles they want, RigUp allows workers to get paid faster, access health insurance, accumulate reviews and build their reputation, and manage their up-to-date certifications all in one place.鈥�

To George, there is still plenty of opportunity for the young company. He estimates that RigUp has聽 about a 2 percent market share in its core market, but sees more than 20 percent market share in some of its most mature sub-categories, 鈥渟uggesting increasing returns the longer RigUp operates in a market.鈥�

鈥淕iven the impending labor shortage in the energy industry and the shift to a new generation of workers, we believe this offering is potentially transformational,鈥� George said.

RigUp said it plans to use its new capital to expand its services into renewable energy, midstream oil and gas, and downstream operations. It also will continue to hire both at its Austin headquarters and out of its Denver office. RigUp currently has more than 300 employees across the United States.

Besides being large rounds, SparkCognition and 搁颈驳鲍辫鈥檚 latest raises signal something exciting for the Austin market: maturity and increased global investor interest. Silicon Valley-based A16z led this round, which also included participation from UK-based Baillie Gifford. out of Santa Monica, Calif., led 厂辫补谤办颁辞驳苍颈迟颈辞苍鈥檚 Series C, which also included participation from Singapore鈥檚. For us on the ground here, this feels like validation for all the hype surrounding Austin as of late.

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Founded by in 2013, SparkCognition ranging from energy, oil and gas to finance and aerospace with cybersecurity and machine learning technology. Its goal is to make operations more safe, secure and efficient. The company鈥檚 products include cybersecurity and document solutions, as well as data science technology.

It has 鈥減artnered鈥� with a number of companies including The Boeing Co., Hitachi High-Technologies, Aker BP, and others. In fact SparkCognition recently partnered with Boeing to form SkyGrid, a joint venture focused on delivering unmanned aircraft system traffic management solutions through the use of AI and blockchain technologies.

With this round, SparkCognition has raised a total of $175 million since it was founded in 2013. This last round was raised at a valuation of more than $725 million, according to Pitchbook.

I talked with Husain by phone today and he told me that the company has been “doubling revenue” year-over-year, and that revenue in 2019 so far has “already exceeded last year’s significantly.”

Meanwhile, headcount is approaching 300, he added, and up about one-third compared to this same time last year.

The company plans to use the new capital to invest in growing its research group, continuing to expand globally (it recently set up operations in Latin America and in the Middle East), and in building out an integration facility near its home base of Austin, according to Husain.

“A lot of the work we do is focused on integrating industrial systems into the physical world,” Husain told me. “So this will allow us to further develop those capabilities.”

In February 2018, SparkCognition announced the full close of its multi-part Series B. The firm raised a total of $56.5 million in the round, which was announced during both and the .

In March of that year, I interviewed Husain鈥攁 prolific inventor with 22 awarded and over 40 pending U.S. patent applications to his credit鈥攐n how AI was likely the harbinger of both innovation and destruction.

Then in July 2018, SparkCognition and Boeing announced they would use artificial intelligence and blockchain technologies uncrewed air vehicles in flight and allocate traffic corridors and routes 鈥渢o ensure safe, secure transportation.鈥�

“In a short few years, SparkCognition has proven itself to be one of the leading industrial AI companies in the world,” said , managing director and co-founder of March Capital Partners, in a prepared statement.

New investor also participated in the round, along with a slew of other institutions and individuals, including , and Malcolm Turnbull, former Australian Prime Minister and former managing director of Goldman Sachs Australia, among others.

Existing investors who also participated in the round included The Boeing Co. through its Boeing HorizonX unit, former Cisco CEO and chairman and , the private investment fund of Michael S. Dell and family.

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Silverton Partners

filed paperwork signaling its intent to raise not just one, but a pair of new venture capital funds. The firm is one of the most active venture firms in Texas with an emphasis on backing Austin-based startups.

The first filing to cross the wires was , for which the firm aims to raise $120 million. If fully closed out, it would be the largest flagship venture capital fund raised by the firm since its inception in 2003.

The filing lists Michael Dodd, , and as its general partners. , who was listed on the filing for Silverton鈥檚 , is not included on the listing for Fund VI.

In May 2018, we reported on the firm closing on its fifth fund, in which it raised $108 million in an oversubscribed round of funding. Previous funds raised $75 million in 2006 and .

Some of the firm鈥檚 most recent investments include participating in Austin-based last-mile delivery startup 聽$10.5 million聽(announced just today) and cybersecurity company $21 million Series B raise (which was led by , Microsoft鈥檚 venture arm)

In addition to its sixth flagship fund, Silverton Partners also filed paperwork , a $20 million investment vehicle. If the firm is following VC industry naming conventions, its first 鈥渙pportunity fund鈥� will likely be earmarked for later-stage investments with the firm鈥檚 existing portfolio companies.

The filings state that, so far, no money has been closed for either of its new funds. However, it should be noted that venture investors frequently submit Form D鈥檚 immediately prior to securing their first capital commitments.

Capital Factory

Described by 小蓝视频色情网页版 News as the 鈥渢he lone star state鈥檚 best-kept startup secret,鈥� signaled that it is looking to raise $20 million for its venture fund. If Capital Factory successfully raises the $20 million, it will be the sixth and largest fund to be deployed into, presumably, seed and early-stage startups by Capital Factory, .

Per prior reporting by 小蓝视频色情网页版 News, in 2018, Capital Factory claimed 鈥�2,416 members and 1,480 startups called Capital Factory home.鈥�

Executive director and co-founder of Capital Factory is listed on the filing as a fund manager.

Although based in Austin, Capital Factory has a presence all over Texas with satellite locations in both and . An active investor, Capital Factory also backed the afore-mentioned Fetch Package. It also participated in Dallas-based recent $11 million Series A raise, which we reported on here.

Here too, Capital Factory states that it has not closed any outside capital for its sixth investment fund. The same caveats about investors filing paperwork right before calling down capital apply.

小蓝视频色情网页版 News reached out to Silverton Partner’s Flager and Capital Factory’s Baer for comment. Both declined at this time.

滨濒濒耻蝉迟谤补迟颈辞苍:听

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There鈥檚 been a lot of hype around Austin鈥檚 startup scene as of late. Companies big and small are relocating, or opening up offices, in the Texas capital left and right, as we covered back in April.

Funding has increased in recent years, too. And while we鈥檝e covered that extensively, we haven鈥檛 really looked at that funding activity in the context of how it compares to other markets.

So I asked our senior data reporter, Jason Rowley, to pull some numbers looking at average round size in various stages. There鈥檚 good and bad in what he turned up. For one, Austin ranks in the top 10 at least among major U.S. cities in terms of average amount raised at the seed, early and late stage. But unsurprisingly, considering that firms here are mostly focused on this stage, the city is stronger at the early stage and (significantly) weaker at the later when it comes to average round size.

As you can see in the chart below, Austin ranks sixth when it comes to seed-stage round size with an average of $1.46 million across 228 rounds struck between 2017 and late August 2019.

Meanwhile, Austin ranks ninth when it comes to early-stage round size with an average of $9.24 million during the same timeframe across 216 rounds, topping only Chicago among major funding-rich cities.

Its weakest performance lies at the late stage. It ranks No. 10 with an average late-stage round of $35.19 million across 46 rounds.

That Austin lacks late-stage investors on the ground has been a common refrain. And many of us believe that until that changes, we鈥檙e not going to see the needle move much in the way of big deals in the city. Increasingly, we鈥檙e seeing investors from other markets participate in rounds. But as we reported back in July, Texas-based VCs are still the primary backers of Texas-based startups.

Recap

Speaking of late stage, Austin was home to at least one significant round during the month. Fintech startup raised $60 million from a bevy of investors (many of whom were notably from out of state) in its third funding round in 13 months after notching 700 percent (!) ARR growth in 2018. Read more about that here.

Over in San Antonio,聽, a firm that offers a non-traditional form of capital and debt for SaaS companies, acquired e-commerce search shop 聽for an undisclosed amount in its second acquisition out of its recently closed second fund. This piece on the deal also gives some background and context to the firm’s approach.

We also gave readers the scoop on Austin-based , a SaaS digital marketing company focused on SMBs, raising $14.3 million in venture and debt financing.

And last week, I reported on San Francisco-based digital life insurance startup announcing plans to open an office, and build out an engineering team, in Austin after raising $60 million in a Series C led by .

News We Didn’t Get To

As always, there鈥檚 more happening in Texas than we simply have time to cover. I鈥檒l summarize a few of those deals next.

First off, there were a couple of notable acquisitions by, and of, Austin-based companies. AustinInno that , 13-year-old Austin-based 鈥渕arketplace that connects the IT industry to help tech buyers and sellers get their jobs done,鈥� was being acquired by New York-based , a global marketing giant 鈥渢hat operates brands including IGN, Mashable, Humble Bundle, Speedtest, PCMag and Offers.com.鈥� As part of that deal, though, AustinInno reported that there would be some layoffs. The publication cited a state filing indicating that Spiceworks would be 鈥渓aying off 59 employees, as of Aug. 19.鈥�

Also, late in the month, Austin-based , a provider of product reviews and user-generated content (UGC) 鈥渟olutions鈥� New York-based and venture-backed , a product discovery and reviews platform with nearly six million 鈥渃ommunity members.鈥�

Terms of the deals were not disclosed.

In organizational news, the Austin Business Journal reported that had as executive director of the 鈥渢o pursue something new.鈥� No word yet on a replacement.

Meanwhile, announced it was outside of San Francisco in downtown Dallas, according to the Dallas Morning News. The move has the potential to bring 3,000 jobs to that area.

And lastly, to our above point regarding funding, there were a number of seed and early-stage rounds that caught our attention. One in particular included big-name investors located outside of Texas.

Over in Houston, , a company aiming to 鈥渆nable the bulk commodity shipping market to operate in a unified and digital environment,鈥� announced the completion of a $1.5 million seed funding round co-led by , , , and . Voyager said its new capital would be used to expand its Software-as-a-Service (SaaS) network鈥檚 offerings, further acquire and expand its customer base, and grow its engineering, development, marketing and sales teams. The company notes that while there鈥檚 a ton of funding in the container shipping sector (think , , and for example), the $360 billion global bulk commodities industry (including crude, oils, gas, grain and metals) is actually 鈥渇our times鈥� larger by volume and drives the global container traffic.

According to Voyager, that space has been largely ignored by technology and is also losing billions a year. Via email, the company told me: 鈥淯nlike the relatively modern container industry, 99% of bulk shipments are still managed by phone, email, fax and text. A single shipment generates thousands of emails and documents. Teams are overloaded, mistakes are frequent and costly, and, most notably, 95%+ of a company鈥檚 data is sitting in folders, spreadsheets, PDFs and inboxes, inaccessible to the company and users at scale. Voyager is the antidote, modernizing the entire chain.鈥�

And last but not least. The funding of a startup that comes with a touching history.

was inspired to start Austin-based , which offers affordable health insurance plans for freelancers, sole proprietors, and 1099 contractors, after he realized 鈥渢hat not everyone is fortunate enough to have great health insurance.鈥� During Soman’s second year studying to get an MBA at l, he was diagnosed with Guillain-Barr茅 Syndrome, and was paralyzed in intensive care for four months. He spent another six months in rehab. Later, Soman was working as a self-employed freelancer when he realized he was spending more on health insurance than for anything else in his family鈥檚 budget. So he focused his energy on helping freelancers have access to more affordable health insurance in the form of Decent, which he founded in 2018.

The startup just led by and including participation from (both out of Silicon Valley). So far, the company鈥檚 plans (which it claims have premiums that are 30 to 50 percent lower than typical market rates) are currently available in Austin and will soon be available in other parts of Texas and the country. Decent plans to use the new capital in part to grow its team over the next year.

“Health insurance is too expensive, especially for people who buy their own without subsidies. Freelancers are seeing premiums rise by more than 20 percent per year,鈥� Soman said. 鈥淭he future of work demands the future of insurance.鈥�

Well, that’s it for this month! Hope everyone had a good Labor Day weekend. See you next time.

Photo credit: Mary Ann Azevedo, Data Credit: Jason Rowley

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Founded in 2016, Ethos says its mission is to make 鈥渕odern, ethical life insurance鈥� accessible to the masses through its proprietary technology.

The company claims it makes getting a life insurance policy 鈥渇ast, easy and inexpensive鈥� by 鈥渢urning a process that was once like going to the DMV to more like shopping online.鈥� It also claims to 鈥減rioritize people over profit,鈥� which is refreshingly noble. Ethos is licensed in 49 states.

The San Francisco-based startup has attracted a bevy of investors in a relatively short amount of time. Existing investors , , and also participated in the latest round, which brings the company鈥檚 to $106.5 million. Ethos raised a $35 million last October that was led by Accel, and an $11.5 million Sequoia-led in June 2018.

Besides some of Silicon Valley鈥檚 most prominent VCs, Ethos has also raised capital from , actor Robert Downey Jr.鈥檚 , NBA player , Arrive, a subsidiary of , and actor .

So, how does it work exactly? A prospective customer can apply and qualify for a policy in about 10 minutes, CEO and co-founder told 小蓝视频色情网页版 News last October, without having to go through medical exams or blood tests鈥攁s most people do when applying through more traditional life insurance providers. That鈥檚 because the company applies data science and predictive analytics to determine an individual鈥檚 life expectancy, he said. He and his former Stanford University grad school roommate, , previously founded secondary life insurance marketplace .

Rapid Growth

GV general partner and Ethos board member noted in a written statement that his firm has been 鈥渃onsistently impressed by the company鈥檚 commitment to growth, customer traction, and execution to date.鈥� Indeed, Ethos says it鈥檚 quadrupled its revenue since last October (although it would not disclose the exact amount). Additionally, it is 鈥渋nsuring thousands of new families every month鈥� and has 鈥渢ens of thousands鈥� of customers.聽 Ethos currently has about 90 employees, compared to 35 at the time of its last raise in October.

鈥淭he nice thing聽 is we have the majority of our money left over from the last round. So raising more money was not something we needed to do,鈥� Colis told 小蓝视频色情网页版 News. Rather, he added, it was more about being able to more optimally take advantage of market conditions. As for Austin, Colis said the city offered 鈥済reat access to talent.鈥�

鈥淚n general, there is a similar growth and entrepreneurial mindset going on in the city that is similar to what we see in San Francisco,鈥� he told 小蓝视频色情网页版 News. (Ethos joins a bunch of other companies that have either relocated to, or opened a secondary office in, Austin in recent years.)

The company plans to use its latest capital toward 鈥渃ontinued momentum, supporting product refinement, technical team hires,鈥� according to Colis.

Ethos is just one of a number of startups working to digitize the insurance industry. Last week, Sophia Kunthara reported that Ohio-based car insurance startup was set to raise $350 million in a funding round that would bring the company鈥檚 valuation to $3.65 billion. Like Root, has also gained traction from investors looking to influence the user-led future of policy purchases. Also in July 2018, online small business insurance provider raised $83 million in a led by .

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Founded in 2012, OutboundEngine鈥檚 marketing software provides 鈥渁 responsive website, relevant content created and sent automatically across email and social media, and hands-free social advertising on Facebook and Instagram.鈥� Its subscriptions range from $199 to $449 per month. The company currently works with over 10,000 businesses, including individual professional service providers such as real estate brokers, mortgage companies, and independent insurance offices 鈥渢o make their marketing simple and easy to manage.鈥� Specifically, it writes and produces branded relevant content and then distributes it via social and email channels.

鈥淥ur mobile app surfaces the most engaged content and provides a means for customers to engage with their prospects and to start conversations and close more deals,鈥� CEO told 小蓝视频色情网页版 News.

In recent months, OutboundEngine on an $8 million 鈥渧enture loan鈥� from . While that news was announced last month, the company also quietly recently raised a Series C-1 round of $6.3 million from , , , , and . That round is an add-on to a $16 million it closed in 2016. OutboundEngine has raised over its lifetime, according to 小蓝视频色情网页版 data.

Pickren joined the company last year with the goal of accelerating growth. Last year, OutboundEngine had a $23 million annual run rate, according to Pickren, and has been growing about 16 percent year-over-year.

鈥淲e鈥檙e continuing to focus on what I call healthy company unit economics and making sure we鈥檙e growing in the right way,鈥� he said. 鈥淲e鈥檝e increased customer retention rates by over 25 percent, sales productivity has increased by over 40 percent and improved how cost-effectively we acquire customers so that they pay us three times as much as it costs to acquire them.鈥�

The company is using its recent debt and equity raises to 鈥渄ramatically expand鈥� the industries and types of professionals it serves, as well as to expand its total addressable market, Pickren added.

鈥淲e鈥檝e been investing in our prospect database and marketing capabilities,鈥� he said. As part of these efforts, OutboundEngine has hired nearly 40 new salespeople in the last two to three months and today has over 200 employees.

Empowering small businesses is a big part of the company鈥檚 overall value proposition.

鈥淲hen you鈥檙e in the technology business or in a software business, sometimes you can lose sight of the customer and human element,鈥� Pickren said. 鈥淭he people we serve are small businesses and independent professionals, so many of them try to do their own marketing and fail. That鈥檚 where we come in.鈥�

, general partner at Austin-based Silverton Partners, believes that SMB marketing automation software 鈥渋s an untapped, compelling opportunity.鈥�

鈥淎lmost 17 million SMBs use no digital marketing tool and 92 percent of them use no marketing automation software, yet they spend more than $35 billion on digital advertising,鈥� he said. “We believe that the SMB market will move away from do-it-yourself (DIY) and toward do-it-for-me (DIFM) offerings鈥� such as what OutboundEngine provides.

, partner at Austin-based S3 Ventures, notes his firm led OutboundEngine鈥檚 $16M Series C and also invested again in the C-1 round. Plauche believes that most small business owners don鈥檛 have the time or expertise to write content and manage outreach themselves.

鈥淥utboundEngine solves this void in the market with a simple, easy to use platform that basically does everything you need,鈥� he said. “The market has several basic email campaign managers but none match the product depth and functionality of OutboundEngine.鈥�

Illustration:

Featured image courtesy of OutboundEngine

Disclosure: The author wrote for OutboundEngine on a contract basis in 2016.

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The company forwent Texas-based investors, turning to mostly West Coast-based money for its Series C. led this latest round (its exits include , , and . 聽(Its venture arm is based in San Francisco) Returning investors , , and also participated in the financing, in addition to new backers such as , , and , and some angel investors. Kansas City-based , which recently opened an office in Austin, put money in the round as well after having invested as far back as ScaleFactor’s seed raise in 2017. (The funding though, overall, bucks a trend we often see of Texas-based startups mostly raising capital from Texas-based VC firms. Specifically, 83 percent (or ten) of the top 12 active investors in Texas in H1 of this year were actually based in Texas).

ScaleFactor鈥檚 online financial SaaS platform is focused on building a back office for SMBs (small-to-medium sized business). The back office, as defined by , 鈥渃an be thought of as the part of a company responsible for providing all business functions related to its operations.鈥�

The six-year-old company is growing rapidly and says it needs the capital to keep up with demand. Evidence of that growth can be seen in ScaleFactor鈥檚 surging annual recurring revenue (ARR), a metric that modern software companies use to track growth in their subscription income, and headcount. CEO and founder told me that his company鈥檚 ARR grew by 700 percent in 2018 compared to the year prior (although from what he admittedly described as a relatively 鈥渟maller鈥� base it鈥檚 still on the very high-end of the growth curve). He projects ScaleFactor鈥檚 ARR will grow by 300 percent this year as the firm approaches the 1,000-customer mark after adding 鈥渉undreds of new customers a month.鈥�

The company started the year with 107 employees and recently crossed the 200 headcount mark. Notably, besides Rathmann, it has 30 CPAs on its team. Below is a look at its fundraising history.

The Future

With the new capital, Rathmann said ScaleFactor will focus on adding depth to its features and building out additional products and services so that it can serve as 鈥渁 one-stop shop鈥� back office for smaller companies. That will include 鈥渟caling its national presence鈥� and building out its product and engineering team, Rathmann said. (Most startups boost hiring after raising new capital.)

The company wants to go beyond offering payroll services or helping with corporate cards for SMBs, which Rathmann believes are increasingly 鈥渞eally savvy buyers.鈥�

鈥淭here鈥檚 a lot of them, and they need a lot of help,鈥� he told 小蓝视频色情网页版 News. 鈥淎nd they don鈥檛 traditionally have access to resources that bigger companies do. Ultimately, we want to provide more than just accounting and finance assistance. We want to help our customers with what鈥檚 happening tomorrow, or next week.鈥� For example, ScaleFactor claims its 鈥渋ntelligent finance鈥� offering takes data on a businesses鈥� patterns to predict things like being short on cash flow before payroll day, rather than the day of, to better assist its customers with controlling their financial operations.

鈥淚n time, we want to be known as the news feed for a business,鈥� Rathmann said. 鈥淲e alert our customers to what needs attention and make proactive suggestions with their bottom line in mind.鈥� Looking ahead, the company is also eyeing the lending space.

Its headquarters are spread out over three offices in Austin, but the company will consolidate into a 50,000-square-foot new space in the hip, gentrifying eastside of the city, which is growing in popularity among startups. It also has offices in Denver and in Vancouver.

What They鈥檙e Saying

The company鈥檚 investors had laudatory things to say about the company鈥檚 product, and its resulting growth:

To Coatue Senior Managing Director , ScaleFactor 鈥渋s building the most comprehensive financial SaaS platform on the market for SMBs.鈥�

Byron Deeter, a partner at Bessemer Venture Partners, in a press release described ScaleFactor as 鈥渁 rocket ship of growth.鈥�

Meanwhile, Canaan partner notes that 鈥淪aaS is creating a level playing field for SMBs which previously had to resort to manual tasks via redundant hires.鈥�

Fintech itself is having a moment. In recent weeks, we鈥檝e reported on a number of notable fundings in the space, including raising over $4 million and $100 million Series C haul. Another SaaS company in the financial technology space, , also recently raised a $200 million Series D for its self-described 鈥減eople platform,鈥� which addresses a number of HR-related functions. Like ScaleFactor, it too is aimed at the small business market.

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Despite the scorching temperatures, funding activity was well, kind of lukewarm in July. As you can see below, the largest known deal was a $48 million Series E raised by , which markets and manages vacation rental homes.

No shock that most fundings were raised by startups in Austin, where the majority of startup activity is taking place. Are you reading from Houston, Dallas, San Antonio or somewhere else in the state and sick of the hipster capital getting all the hype? If so, shoot me an email, I鈥檇 love to know why your hometown isn鈥檛 keeping up (sorry, just saying) despiteand lots of cash.

What鈥檚 Playing In Theaters

In July, I reported on how Austin-based raised $24.5 million of a planned $75 million fund. He liked my tweet apparently so that was fun. I also did a Q&A with dating site (which is profitable, so that鈥檚 cool). I wanted to hear more about its fund, which is focused on investing in underrepresented founders. They only wanted to be interviewed via email which was not ideal, but it鈥檚 a free country and Bumble is a private company, so there you go.

I also talked to Austin-based real estate startup ,which raised $4 million in equity funding and $21 million in debt funding to help people buy homes faster. Since I specialize a bit in real estate technology, I got to geekily analyze how this company fits into the overall space a bit. I also got to interview HR tech startup about what it plans to do with its recent $4 million capital infusion that was led by . Pretty sweet bit of cash for a small startup.

And finally, I reported on 鈥檚 acquisition of , an Allen, Texas-based mobile video solutions provider, for an undisclosed amount. The company was previously eyeing an IPO, according to the . For non-Texans, Allen is suburb of Dallas so that was a sweet win for Big-D.

The New Stuff

Y鈥檃ll know I crank every day but there were still some deals I just didn鈥檛 have the juice to cover at the time. So here will go.

鈥淒esigned by technicians, for technicians鈥� startup in a round led by (also based in Austin). Austin-based is a developer of software for mobile auto repair businesses (talk about specific).

Recently-rebranded , a mobile-first concierge platform for apartments, raised $3 million in a round led by New Jersey-based that also included participation from Houston-based , the and Austin-based. According to , the Houston company recently changed its name from 鈥淎partment Butler.鈥� Seems like a good idea. It wants to expand (Denver will be its first stop outside of Texas).

Austin-based , a customer review platform for B2B technology, announced a $12.5 million Series C funding led by (also based in Austin) with continued participation by returning investors Silicon Valley-based and local VC firm LiveOak Venture Partners. The company said it plans to grow ARR by 223 percent and its customer base by three times through 2020.

And let鈥檚 not forget the energy sector. , a Houston-based AI energy analytics company, concluded its Series B funding round with a new $1.8 million investment from, a Colombian venture capital firm backed by one of the largest utilities in South America. The company previously announced in May the initial close of its, led by . Innowatts says its AI-driven technology helps customers such as utilities, energy retailers and smart energy communities reduce their energy bills.

In San Antonio, launched its third fund, raising $10 million toward a planned $50 million offering, according to the . 鈥淕eekdom Fund III is expected to be substantially larger than Geekdom Fund I, which raised $3.4 million, and Geekdom Fund II, which raised $20 million,鈥� wrote the Journal. Per its 小蓝视频色情网页版 profile, the firm 鈥� invests in early stage IT startups in San Antonio, South Texas and beyond.鈥�

And finally, check out our recently published quarterly report (which found that Texas funding in Q2 barely surpassed Q1 2019 totals, and the state鈥檚 venture market underperformed year-over-year). Don鈥檛 miss it, it鈥檚 good. Thanks for reading and until next time, stay cool and hydrated!

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