Follow the money: The top North Texas funding rounds, M&As and VC activity in October
Despite the pandemic, October has been a busy month for economic activity in the North Texas startup ecosystem.
In all, there were more than 25 deals, led by large rounds like $310 million in growth funding for biotech company Caris Life Sciences and Payrix's $50 million Series A. The month capped off a strong third quarter for the region, which saw nearly $265 million in investment dollars, bringing the total for the year to $1.07 billion.
Richardson-based Adaptive3D, a polymer resin manufacturing startup, announced securing a Series B funding round for an undisclosed amount. The round was led by French advanced materials company Arkema Group. And it was joined by West Pharmaceutical Services, Clear Fir Partners, Applied Ventures and one of the founding families of Texas Instruments. Adaptive3D said it plans to use the new funding to increase its production of photopolymer resins for the use in tear-resistant rubber products. The funding announcement comes after Adaptive3D announced hiring Jay Murray as its new director of North American sales.
McKinney-based ShearShare closed on an oversubscribed $2.3 million seed round, bringing its total to $3.4 million. Local investors joining the round were Dallas Cowboys player Jaylon Smith, through his Minority Entrepreneurship Institute, and ArlanWasHere Investments, for which Mark Cuban is the sole LP. They were joined by a number of others, including Rise of the Rest, Backstage Capital, Bread and Butter Ventures and Thaddeus Young of the Chicago Bulls. With the new funding, ShearShare is looking to expand even more. Part of that expansion will include the development of new services, such as an insurance policy that would help protect workers using its platform from on-the-job incidents. It's also planning to invest in marketing and its team.
Dallas-based fintech startup Gig Wage landed financial backing with a new partnership. The company, a payroll platform provider, announced receiving a $7.5 million Series A found led by California prepaid debit card and banking services firm Green Dot Corp. The new funding brings Gig Wage's total to about $11 million. Continental Investors, Techstars and Rise of the Rest also joined the round. As part of the deal, Green Dot will serve as Gig Wage's infrastructure bank partners, adding some of its banking options to Gig Wage's platform.
Dallas-based structured saline breast implant maker Ideal Implant reported raising more than $2.3 million in equity and other options, according to a filing with the SEC. Ideal, which was founded in 2006 by Robert Hamas, is looking to raise nearly $2.5 million in the offering, according to the filing. The new funding brings Ideal's total to more than $14 million, based on previous filings.
Dallas-based residential construction management software company Hyphen Solutions announced landing a “significant” equity investment from existing investor GreyLion Capital and new backer Stone Point Capital. Financial terms were not disclosed. With the new funding, Hyphen plans to scale its payment solutions platform, grow its sales pipeline and expend into new markets. As part of the deal, GreyLion partners Chip Baird and Henry Heinerscheid, was well as Stone Point senior VP Agha Khan and VP Rory Shaw, will join Hyphen's board. Previous board chair and CEO David Deniger sold a majority of his interest in the company but will continue to hold a seat on the board.
In a funding initiative designed in tandem with leaders in the local scene, the city of Denton awarded its first ever Entrepreneurship Economic Development grants at a city council meeting last week. Focused on creating more density in the startup community locally, a $106,500 performance based grant to IoT company TeamofDefenders, and another $243,500 grant was awarded to VR startup From the Future. Combined, the grants could help create more than 150 new tech jobs in Denton.
After launching its Innovation Fund, aimed at attracting tech startups headquarters to the city, the McKinney Economic Development Corporation initiative has brought more than a dozen new or expanded workplaces in the city. The most recent is Alanna.ai. The McKinney-based title and land industry-focused AI software startup announced receiving a grant from the MEDC's Innovation Fund. Financial terms of the deal were not disclosed. With the new funding, Alanna.ai plans to increase its headcount from seven to 27 within the next three year, each position with an average salary of $90,000. To accommodate the expansion, Alanna.ai is leasing an additional 3,000 square-feet of office space to its current headquarters near North Central Expressway and U.S. Route 380.
Landing one of the largest funding rounds in Q3, Irving-based Caris Life Sciences announced raising $310 million in growth capital, which includes $235 million in equity financing and $75 million in debt. The equity funding was co-led by Dallas' Highland Capital Management and California based Coatue. T. Rowe Price Associates, Inc. Neuberger Berman, and ClearBridge Investments also joined the equity financing. On the debt side of the funding was led by Sixth Street. The funds will help Caris pursue new clinical trials and biopharmaceutical markets for its cancer-fighting products. As part of the deal Sixth Street co-founding partner Vijay Mohan will join Caris' board.
Dallas-based medical device startup Articulate Labs was one of two winners of the InnoSpark Ventures' Artificial Intelligence Prize at MassChallenge's annual awards event. The recognition also comes with $25,000 in non-dilutive funding. The announcement comes as the company reported having its pre-submission meeting with the FDA to begin the path to take its wearable technology, which uses machine learning and electrical stimulation to model joint movement, to market.
After landing a nearly $10 million grant from the Cancer Prevention and Research Institute of Texas in August, Southlake-based biotech company OncoNano Medicine reported raising $21.4 million in equity finding, according to a filing with the SEC. The company, which focuses on cancer diagnosis and treatment technology, is looking to raise $60 million, according to the filing.
In an all Texas deal, Frisco-based TUBBR, a social networking platform, announced raising angel funding from Global Ascent Partners, a firm led by Austin-based Managing Partner Sandeep Kumar. Financial terms of the deal were undisclosed. TUBBR plans to use the funding to help launch the beta version of its platform in January.
Dallas-based MediBookr, a health care shopping platform, announced closing on a bridge funding round. The amount and the investors were undisclosed. The new funding brings Medibookr's total to $3.3 million. The Health Wildcatters-backed company, founded in 2015, previously landed a $675,000 seed round in 2017.
Dallas-based stealth tech startup Colorcast reported raising $100,000 in new debt and equity funding, according to a filing with the SEC. Little is known about the company. However, we've been following the startup's SEC filings, and the new funding brings Colorcast's total to at least $205,000. Also, one of the executive officers and directors listed for Colorcast is Luis Lafer-Sousa, who also serves as the U.S. president for local community living app TownSq, according to his LinkedIn profile.
NuScale Power, a maker of small modular nuclear reactors, which is owned by Irving-based Fluor Corporation, announced the Department of Energy awarded the company a funding vehicle to provide up to $1.35 billion for a commercialization project in Idaho. NuScale is looking to create a 720 megawatt nuclear plant in the state, after recently receiving design certification from the U.S. Nuclear Regulatory Commission.
Irving-based ZipRad, a digital solutions company working to streamline the radiology ordering and prior authorization processes, reported raising $240,000 in debt funding from six investors, according to a filing with the SEC. The recent funding brings ZipRad's total to at least $500,000, based on previous SEC filings.
Local technology forum Tech Titans put out a call to startups and entrepreneurs in summer, seeking ideas that leverage 5G technology to help enable contact-free connections between people and organizations amid the pandemic. And a panel of judges that included local serial entrepreneur Mark Cuban and AT&T Consumer CEO Thaddeus Arroyo named Marjorie Zielke, director of UTD's Center for Simulation and Synthetic Humans, the winner. Along with mentorship and accessing to networking for potential funding and partnerships through Tech Titan's Innovation Collider, the organization said Zielke is eligible for up to $20,000 in awards from telecom companies including Nokia, Ericsson and AT&T.
Electric motor systems company Linear Labs announced landing $6 million in a new funding round that included Champion Hill, Lowercarbon Capital, Kindred Ventures, Gen Fukunaga, Duke Angel Network, Spike Ventures, and Uber alumni investing group Moving Capital as backers. With the new funding Linear Labs plans expand its manufacturing, infrastructure and logistics capabilities, as well as advance its research and development in the areas of automation and robotics.
Local telehealth platform startup MyTelemedicine announced landing a grant from the McKinney Economic Development Corporation's Innovation Fund to increase its headcount and office space. Financial terms of the deal were not disclosed.
Dallas-based WAVA, an ecommerce sales platform that connect brands with their consumers, which does business as Immerss, reported raising $100,000 in debt funding, according to a filing with the SEC. That brings its total funding to more than $1 million according to Crunchbase. The company is looking to raise a total of $1.5 million in debt funding, the filing notes.
After being accepted into the inaugural Google for Startups Accelerator for Black Founders, four local companies have landed funding from the technology giant. Joining 76 other startups, Dallas-based Kanarys and Zirtue, as well as McKinney's ShearShare and CourMed were selected for funding through the recently launched Google for Startups Black Founders Fund. The four startups received $300,000 from Google's $5 million fund, which launched in June.
After landing $3 million in seed funding from the Cancer Prevention & Research Institute of Texas in February, Dallas-based pre-clinical biotech startup Dialectic Therapeutics has raised new funding. According to a filing with the SEC, the company, which focuses on the development of anti cancer drugs, reported raising $500,000 in equity funding. The new funding brings Dialectic's total to more than $5 million since its launch in 2018, according to Crunchbase.
The University of North Texas' College of Engineering landed more than $400,000 in grant funding from the Department of Energy to collaborate with the Center for Nanophase Materials Sciences at Oak Ridge National Laboratory on a project to develop 3D-printed automotive frame materials. Researchers at UNT will focus on developing 3D-printed carbon fiber material that can be embedded with sensors.
A Dallas-based software startup has landed new funding to grow its presence in a rapidly growing industry. Botisimo, a cross-platform chatbot tool developer, announced securing a $700,000 seed round from local software-focused operating partner Mason Bridge. The company plans to use the new funding to help grow its business and user base, while developing new features for its software.
Dallas-based stealth-mode tech startup Colorcast reported raising $20,000 in new debt and equity funding, according to a filing with the SEC. Since the beginning of 2020, Colorcast has reported at least eight debt and equity funding filings, totaling about $105,000.
Payrix announced Thursday that it has raised more than $50 million in a funding effort while also shaking up the leadership. That amount includes $22,000,000 that it unveiled in backing last year, a spokesperson for the company said. The majority of the round was raised this year. Blue Star Innovation Partners — founded by the the Jones family and entrepreneur Rob Wechsler — and Providence Strategic Growth are leading the A round.
Farmers Branch-based autonomous supply chain management company One Network Enterprises announced landing a $61.9 million contract from the U.S. Air Force. The new funding will help the company develop its Item Master Logistics Capability Initiative, which will help develop item of supply access capabilities for the Air Forces' global network platform. The company said the project is expected to be completed in 2025.
M&As
After itself being acquired by Astra Capital in May to support its expansion into new markets, Dallas-based colocation data center owner and operator DartPoints has made an acquisition of its own, scooping up Ohio-based Metro Data Centers, an interconnection and data center solutions provider. Financial terms of the deal were not disclosed. The move falls in line with the company's plans to expands in tier 2 – 4 markets in the South, Midwest and Mid-Atlantic regions.
More than a year of speculation about a potential IPO, Dallas-based driving range-entertainment concept Topgolf announced its exit with an acquisition by California golfing equipment maker Callaway, which was a previous investor in Topgolf. The deal values Topgolf at about $2 billion. With the announcement came new insights into the company's financials. The company recorded $1.06 billion in sales last year with a net loss of $114.9 million. By 2022, the merged entity is projecting to record revenue of more than $3.2 billion. As part of the deal, Topgolf CEO Dolf Berle will step down to pursue “other leadership opportunities,” after seeing the company through the transition. Callaway president and CEO Chip Brewer will then become the head of the Topgolf-Callaway entity.
Dallas- and Ontario-based residential real estate software company Lone Wolf Technologies has been acquired by Stone Point Capital from Austin's Vista Equity Partners. Financial terms of the deal were not disclosed. Stone Point said it plans to keep Lone Wolf's management team in place. However, there was no word on if there would be layoff in other areas. Under new ownership, Lone Wolf will receive new growth capital from Stone Point to accelerate product development.
TPG Growth, the mid-market growth equity arm of Fort Worth- and San Francisco-based alternative asset firm TPG, announced acquiring a majority stake in Canadian no-sugar sweets brand SmartSweets. Financial terms were not disclosed. As part of the deal, founder and CEO Tara Bosch will remain the largest individual shareholder of SmartSweets. However, she will step down from her role as CEO, which will be taken over by former Voortman Bakery CEO Douglas MacFarlane.
Following German fintech company Wirecard's collapse in June after $2 billion was found missing from its balance sheet, its U.S. arm – which has operated independently since it was acquired by the parent company in 2016 – has been acquired by Plano holding company Syncapay. The company, which has rebranded to North Lane Technologies, will be combined with Pennsylvania-based DaVinci Payments, with both reporting to Syncapay. Financial terms of the deal were not disclosed. The move will also come with new equity funding for Syncapay from Centerbridge Partners. Terms were not disclosed.
Governance, risk management and compliance SaaS company symplr, a portfolio company of Clearlake Capital Group, announced plans to acquire Dallas' TractManager, a health care contract lifecycle management solutions company, from Arsenal Capital Partners. Financial terms of the deal were not disclosed.
In an all local deal, Dallas PE firm Havencrest Capital Management announced acquiring Flower Mound-based temperature management and medical device maker ThermoTek. Financial terms were not disclosed. As part of the deal, Havencrest Operating Partner Robert Kline will chair ThermoTek's advisory board. Havencrest said it plans to launch new products and expand into new markets with ThermoTek.
Dallas-based educational assessment software platform ExamSoft has been acquired by California's Turnitin, an academic integrity and assessment software. Financial terms of the deal were not disclosed. The plan is to merge the two businesses into one company. Turnitin purchased ExamSoft from Spectrum Equity, which acquired the company in 2014.
Plano-based sales engagement platform VanillaSoft has acquired Toronto's Autoklose, a sales and email automation company. Financial terms of the deal were not disclosed. VanillaSoft plans to integrate Autoklose's tech into its sales capabilities.
Nutrisystem, the nutrition and weight management brand has been acquired by Dallas-based PE firm Kainos Capital. The firm bought the company from Trinity Health for $575 million. The deal is expected to close in Q4. The move is among other notable health and wellness acquisitions for Kainos. In 2014, Kainos acquired SlimFast from Unilever, eventually selling it to Glanbia plc in 2018 for $350 million.
Dallas-based experiential marketing company Groundswell Experiential has acquired Chicago's Pro-Ject Innovations, an events, marketing, consulting and influencer networking firm, with plans to merge the businesses. Financial terms of the deal were not disclosed. As part of the deal Pro Ject co-founder and president Joe Lucchese will serve as the executive VP at Groundswell's Chicago offices.
Real estate technology company MRI Software has acquired Carrollton's CheckpointID, an ID verification and fraud prevention company focused on the property rental industry. Financial terms of the deal were not disclosed. MRI said it has seen a growing need for contactless technology like CheckpointID's during the pandemic, as property managers look for online ways to connect with potential customers.
Carrolton-based Fastsigns Holdings has acquired Connecticut's GTN Capital Group, which owns IT services franchise NerdsToGo. Financial terms of the deal were not disclosed. NerdsToGo currently operates in 16 states and said it has been seeing increased growth amid the pandemic.
Fresh off the heels of a $50 million Series A led by Blue Star Innovation Partners and Providence Strategic Growth it landed in October, Frisco based fintech startup Payrix is expanding internationally with a new acquisition. Payrix announced the acquisition of Australia-based payment services provider IntegraPay. Financial terms were not disclosed. With the move, Payrix will have access to IntegraPay's operations in Australia, New Zealand and the UK. Payrix also teased plans to expand into other international markets in 2021, although it did not provide specifics.
After landing a $140 million funding round led by D1 Capital Partners late last month, Plano-based fintech startup Alkami Technology announced acquiring Tennessee-based ACH Alert, an electronic payments fraud prevention company, adding ACH's technology to its banking platform. Financial terms of the deal were not disclosed.
Fort Worth-based business management solutions provider ECI Software announced the acquisition of Grand Prairie's BOLT Software, a residential construction scheduling solutions company. Financial terms were not disclosed. ECI plans to further develop BOLT's technology, integrating the company into its Residential Home Construction Group.
And on the CPG side of things, Louisville-based Turning Point Brands acquired a 20 percent stake Dallas-based hemp cigarette maker Wild Help. As part of the deal, Turning Point will have distributions rights to Wild Hemp's Hempette cigarette brand. The deal also includes an option for Turning Point, which also owns the cigarette paper brand Zig-Zag, to increase its stake if terms of the profit-sharing agreement are met.
Houston-based Quorum Software, a software platform focused on the oil and gas industry and Thoma Bravo portfolio company, has acquired Dallas' cloud-based document management company Landdox. Financial terms of the deal were not disclosed. Quorum plans to incorporate Landdox's technology into its Quorum Upstream On Demand SaaS suite.
Plano-based pharmacy cost management solutions provider Pharmaceutical Strategies Group's 340B Drug Pricing Program business has been acquired by California-based Omnicell, a health care solutions provider, from Blue Wolf Capital for $225 million. According to a press release, PSG's 340B business, which focuses on providing financial assistance to hospitals in underserved communities, reported $35 million in total revenue for the 12 months ending on June 30.
Austin PE firm Cotton Creek Capital has acquired Fort Worth-based biopharmaceutical equipment maker ConeCraft in a majority recapitalization. Financial terms of the deal were not disclosed. Cotton Creek's investment comes from its Cotton Creek Capital Partners III fund.
Argyle-based AFV Partners, a PE firm launched by former Solera CEO Tony Aquila, announced the acquisition of Seattle Avionics Software. Financial terms of the transaction were not disclosed. This marks the third aviation-related acquisition for AFV since launching in 2019, following its acquisitions of RocketRoute and Aircraft Performance Group.
Addison-based authentication and information services company Authentix has acquired New York-based Traceless Authentication Group, a anticounterfeiting and diversion company, from Bibliotheca, Inc. Financial terms of the deal were not disclosed.
Data center company DataBank has acquired zColo, the colocation arm of Zayo Group Holdings. Financial terms were not disclosed. However, Bloomberg reported in November that Zayo was considering the sale, which at the time was potentially worth about $1 billion. Under the deal, DataBank increases its number of data centers to 64 from 20. The deal is expected to close by the end of the year.
VC Activity
Local serial entrepreneur and Dallas Mavericks owner Mark Cuban was one of six investors on a $3.7 million seed round for New York based Lightyear, a procurement and management platform for the telecom and IT infrastructure industry. The round was led by Amplo and joined by Susa Ventures, Ludlow Ventures, Cuban, David Adelman, and Operator Partners. Lightyear plans to use the funding for the launch and expansion of its platform.
Dallas-based retail technology-focused VC firm RevTech Ventures has added a new company to its portfolio. The seed-stage firm announced making a new investment in Houston-based blockchain startup topl. Financial terms were not disclosed. Launched in 2017, topl helps companies certify their ethical and sustainable practices. The company reported raising more than $1 million in September, according to a filing with the SEC.
After launching its second social and environmental impact fund in 2018, Fort Worth- and San Francisco-based investment firm TPG's growth investing arm announced it has surpassed the amount it raised for the first Rise Fund and is nearing its goal of $2.5 billion. In an amended filing with the SEC, the Rise Fund II reported raising about $2.16 billion from 109 investors. The previous fund, which was created through a partnership with U2 singer Bono and others, raised $2.1 billion.
TPG Biotech, the life sciences division of the Fort Worth- and San Francisco-based investment firm, co-led a $20 million funding round for Israel based biotech company Azura Opthalmics, bringing the company's total to $38 million. The funding will help the company begin a registration study for its topical eye disease treatment product.
Another local firm is investing in esports-focused streaming network VENN. Irving-based Nexstar Media Group co-led a $26 million Series A round for the company, alongside BITKRAFT Ventures. As part of the deal, Nexstar gets the right to appoint a member to VENN's board. TechCrunch reports will the deal will likely give Nexstar some ability to push shows from its broadcast network on VENN's platform.
The VC firm Gore Range Capital is launching its second fund, which, while it continues the firm's focus on the skin health industry, is focused on funding early-stage startups with technologies that could have impacts in the larger biotech industry. With it second fund, Gore Range is going back to its roots, focusing on startups whose technology that is focused on skin health and aging could lead to broader innovations in the fields, with implications to other inflammatory and autoimmune diseases. The firm declined to disclose how much its second fund is looking to raise, but said it is aiming for a 9-figure amount. The fund will aim to create a portfolio of between 10 to 15 companies as lead or co-lead of investors with investments ranging from $5 million to $15 million
IPOs
Richardson-based software company Mavenir was looking to sell 13.6 million shares, priced between $20 and $24 per share, which would raise more than $325 million for the company. However, had underwriters exercised their options, the number of shares could have risen to 15.7 million, raising about $376 million. The Dallas Business Journal reports that various organizations put the company's valuation between $1.5 billion and $1.9 billion. Towards the end of the month though, amid “market volatility,” Mavenir joined a number of other companies in postponing its IPO. There's no word on when Mavenir may look to go public again, but it said it will “reassess the market conditions in the coming months.”
McAfee plans going public. The company said revenue increased $110 million, or 8.5 percent, from $1.29 billion for the 26-week period ended June 29, 2019 to $1.4 billion. It also employs about 1,000 workers at its Plano operations.
Fort Worth- and San Francisco-based investment firm TPG has announced the raising $450 million in its IPO for TPG Pace Tech Opportunities, a newly created, tech-focused SPAC. The organization was offering 45,000,000 units at $10 per share, with options to raise an additional $150 million. As part of the move, TPG Pace Tech Opportunities will trade on the Nasdaq under the ticker symbol PACE.U.
Marketing management and software company Thryv Holdings hit the Nasdaq. The Dallas-based company began trading under the ticker symbol THRY on Thursday, after completing a direct listing. As of this afternoon, Thryv's stocks were trading at $14.11 per share, nearly four dollars higher than the $10.17 per share it received for a private placement in August. With a share count of about 31 million, Thryv has a market capitalization of more than $350 million, the Dallas Business Journal reports.
