In August, temps in Austin have been a stifling 100-plus for 45 days so far this summer. Given the weather, now is as good a time as any to profile local startups that have raised money this year.
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As of Aug. 23, 2018, 137 Austin-based startups had raised some form of venture capital—53 of which were seed rounds and 19 of which were Series A rounds. This means that more than half of the investing that took place (that we know of) was early-stage funding.
Funding recipients are in a variety of industries: blockchain, artificial intelligence, edtech, and health care, among other sectors. Here, we’ll highlight three Austin startups that—like the weather—don’t appear to be cooling down anytime soon.
Medici is aiming to take the on-demand health model to another level by connecting patients to all of their existing doctors via text or video. The company raised a $22 milion round in June from individual investors including executives from Citadel, Dell, Publix, and Starwood Capital.
“Plenty of companies like Doctors on Demand, MDLIVE and Teladoc provide a patient with a call center doc,” CEO and Founder Clint Phillips said. “You don’t know them; they don’t know you. There’s no context or records involved. And your medical record becomes fragmented.”
To Phillips, Medici has great growth potential because, quite simply, “people want to speak to their own doctor.” Additionally, doctors don’t view the company as a threat since it claims to enhance or protect their business – not replace it. Medici is HIPPA compliant and provides malpractice insurance in an effort to provide a “safe” environment for doctors, Phillips added.
So far, nearly 2,800 physicians have downloaded the Medici app, according to Phillips. Medici makes money by charging doctors a fee for every encounter they have via the app.
Since we talked to the company last year, Medici added a desktop version of its app after getting feedback from doctors that it could be hard to answer questions via their mobile phones, according to Phillips. Also just two weeks ago, Medici included a group chat feature to allow doctors more freedom to incorporate an assistant or bring a specialist into a conversation with a patient.
“Doctors had been longing for this feature,” Phillips told Crunchbase News this week. “It sounds simple, but in health care, you have to know where conversations can be stored and where they are going (due to HIPPA regulations).”
There are also now 600 veterinarians using its platform.
“It’s turning out to be huge for us,” Phillips added. “We’re getting partnerships with a number of vet associations because they realize we really do care about these doctors and have a solution for docs to have a better quality of life and provide better quality care.”
Medici is now also endorsed by 18 medical associations, up to 40 employees, and is expanding “strongly” in South Africa.
A few weeks ago, I wrote about how an emerging new category of workplace alternatives are attracting attention from both the venture community and some of commercial real estate’s biggest players.
One such company is Austin-based Swivel, which was founded by Scott Harmon in late 2016 with some initial incubation capital from Floodgate. Harmon and Floodgate Co-Founder Mike Maples had started and sold a software company together in the late 1990s called Motive and decided they wanted to work together again.
They both had a passion for “simplifying the office,” Harmon said, and felt like the commercial real estate office market needed to be disrupted.
“We recognized the problem of growing tech companies not being able to afford decent office space,” Harmon told Crunchbase News. “It’s becoming an ever-more pressing problem to the point where VCs are now pushing back to put so much money in companies signing expensive five to 10-year leases.”
What they came up with in Swivel is an online workspace operator that essentially signs the longer-term leases and then gives companies the option to sign shorter term leases—think 12 to 36 months, based on their needs.
In May 2017, Swivel raised an $850,000 seed round in 2016 and then another $1 million in June 2017. More recently, the company brought in another $4.8 million in what Harmon described as a Seed 2 round.
Its target market is companies in their growth phase, mostly venture-backed tech startups with between 10 and 100 employees who have outgrown traditional coworking spaces but are still too small to sign a long-term lease or rent a big part of a building.
“When we find a company that wants space, they can go on our site and choose from a number of spaces and then we work out a deal for them,” Harmon told Crunchbase News. “VCs like that we don’t have millions on a balance sheet from signing long-term risky leases. We only sign a lease when we have a client say they want a particular space. It’s a lean approach.”[bctt tweet=”VCs like that we don’t have millions on a balance sheet from signing long-term risky leases. ” username=”scotthar_tx”]
If the real estate market turns, Swivel is then in a better position because it wouldn’t have a bunch of leases on its books that would be hard to sell, according to Harmon.
Clients are able to configure and design the space however they want using Swivel’s software. Most offices are between 3,000 and 10,000 square feet. Companies need only to give 60 to 90 days notice before moving out and then are not charged any penalties or move out fees, and don’t have to deal with subleasing.
So far, Swivel has two active spaces in Austin with another three coming online in the next few weeks. Harmon anticipates it will have 15 by year’s end. The company plans to expand into two additional unidentified markets in 2019.
It’s using its latest raise to primarily ramp up its marketing efforts via online advertising and partnerships with commercial real estate companies, landlords, and office brokers.
The startup says it’s on a mission to build a better way for owners and operators to control and grow their business by simplifying accounting and finance tasks.
“We’re taking the stress and frustration out of accounting and replacing it with proactive, actionable insights—think push notifications for your business,” Rathmann said.
The 73-person company recently closed a $10 million Series A funding round that was led by Canaan Partners with participation by Citi Ventures, Next Coast Ventures, Flyover Capital, Firebrand Ventures, Broadhaven Capital, and other angel investors.
“As a CFO at a small company in Denver, I was facing a series of operational inefficiencies that created a major disconnect between taking an action, and the impact it had on the business,” CEO Rathmann told Crunchbase News in an email in July. “We couldn’t realize the impact of things that were happening in May until we got the monthly reports in June.”
After allocating most of his time to simplifying accounting tasks and automating manual work, Rathmann decided to leave his job and found ScaleFactor.[bctt tweet=”Our team is built around a set of core values that include community, gratitude, and technological optimism.” username=”kurtrathmann”]
With ScaleFactor’s software, companies can access automated accounting and bill pay and invoicing tools, integrate their financial processes into a tax compliance calendar, and view performance data through ScaleFactor’s company visibility dashboard. According to Rathmann, more than 250 companies use the platform. ScaleFactor currently serves three markets, including professional services companies, subscription-based businesses, and brands in consumer-packaged goods.
Business owners, operators, and entrepreneurs are ScaleFactor’s target customers. The company’s revenue has grown 850 percent year-over-year so far in 2018, and Rathmann attributes that to ScaleFactor’s “customer-focused mindset, the acceleration of our software and the incredible drive and focus of our team.”
“Our team is built around a set of core values that include community, gratitude, and technological optimism,” Rathmann said. “Most importantly, we look for team members that have an inquisitive mindset around existing methods and the way the world solves these problems today.”
While Austin continues its fight to become known as more than “Silicon Hills,” there’s no shortage of ambitious startups in the region ready to become national (and global) players.
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