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Austin’s 1st Detect gets $1.8 million state grant
Austin-based 1st Detect Corp., which is developing a portable chemical detection device, has received a $1.8 million grant from the Texas Emerging Technology Fund.
1st Detect was formed by Astrotech Corp., an Austin-based satellite and space research company. It is commercializing miniature-mass spectrometer technology first developed for the International Space Station. 1st Detect said its Miniature Chemical Detector combines the performance of a mass spectrometer in a small, easily portable package.
The device combines rapid analysis with the capability to detect residues and vapors from a wide range of chemicals, including explosives, chemical warfare agents, toxic chemicals and volatile organic compounds, 1st Detect said.
“With this investment from ETF, we will continue to develop a technology that has the potential to make a great impact in the safety of our troops and our nation,” CEO John Porter said in a statement. “With this technology we will greatly enhance the military’s ability to detect chemical threats by increasing the accuracy of chemical detection by orders of magnitude.”
The ETF award will be used to finalize the design of the detector and market it to the security, health care and industrial sectors, the company said.
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RISE Austin rocks on
Have you caught a RISE Austin session yet? There’s still time.
Small group sessions for entrepreneurs run through Friday. I caught a couple yesterday and I’m hoping to jump back in tomorrow. (You can find my story about one of the sessions here.
The idea of RISE — which stands for Relationship and Information Series for Entrepreneurs — is to provide a forum for aspiring, new and veteran entrepreneurs to connect and exchange ideas in small groups. This year, more than 200 sessions will take place all over Austin in conference rooms, coffee shops, law offices and at the Lance Armstrong Foundation.
Tonight , RISE is hosting a fast-pitch competition at the Lance Armstrong Foundation headquarters. Ten startups will give a one-minute business pitch to a panel of judges, including Inc. magazine editor Jane Berentson.
Judges will then question the entrepreneurs and pick a winner, who will receive a $500 cash prize and branding and marketing services from Hahn, Texas valued at $5,000.
All events are free and open to anyone. You can register for sessions and to attend the fast-pitch at www.riseaustin.org.
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Facebook is coming to Austin
Social networking company Facebook will open an Austin sales and operations office, creating 200 jobs, Gov. Rick Perry announced this morning.
You can find our blog post about the deal here.
UPDATE: Chinese solar company Yingli Green Energy said Thursday that it’s considering Austin and Phoenix, Ariz., for a large solar panel manufacturing plant and its North American headquarters.
Our story about Facebook and Yingli in today’s paper is here.
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UT’s Venture Labs gets ready to launch
The University of Texas is getting ready to launch a new program called Venture Labs Texas to promote entrepreneurship, innovation and commercialization.
The university-wide initiative will focus on new company creation through education and mentoring, market and business plan analysis and assistance with networking and connecting with investors.
Venture Labs will be led by Rob Adams, who is on the staff of the management department at UT’s McCombs School of Management and is director of the Moot Corp competition.
The program, which will be located at AT&T Executive Conference Center on the UT campus, will be formally announced at an event at the conference center on March 10.
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It’s RISE Austin time; Innography raises money
It’s not too late to register for next week’s RISE Austin conference — I’m still trying to decide which sessions to catch.
The March 1-5 program — which is free and open to anyone — features dozens of small group sessions around the city where entrepreneurs can learn from veterans and share tips and ideas.
The sessions are limited in size, and many are already filled. But I’m not having trouble compiling a good hit list. And more sessions are being added.
You can find my TechMonday story on RISE here.
Meanwhile, in case you missed it, Austin software company Innography has raised $3 million for expansion. You can find that story here.
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Austin Ventures team starts a new firm
Austin Ventures veteran Venu Shamapant (right) and three others from AV are breaking out on their own.
They have founded LiveOak Venture Partners, which will invest in early-stage technology startups in Austin and statewide.
Shamapant, 42, joined Austin Ventures in 1999 and became a general partner in 2005. At Austin Ventures, he and his LiveOak co-founders focused on investments in startups specializing in semiconductors and telecommunications equipment.
He co-founded LiveOak with three other Austin Ventures colleagues: Krishna Srinivasan , formerly a partner at Austin Ventures, and Ben Scott and Joe Marengi , former venture partners with Austin Ventures. Marengi also is a former Dell Inc. executive.
You can find my story about LiveOak here.
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Did HomeAway score with Super Bowl ad?
Austin-based HomeAway Inc.’s Super Bowl ad didn’t top any major “Best Of” lists, but it garnered generally positive media reviews and its Web site got a traffic jolt.
The 30-second spot, featuring Chevy Chase and Beverly D’Angelo reprising their “National Lampoon’s Vacation” roles, was shot as a movie trailer. The idea was to steer viewers to a 15-minute film short about the Griswolds, and the benefits of renting a vacation house instead of a hotel, on HomeAway’s Web site.
I’m not sure whether folks who didn’t already know about the online film would have picked up on it from the ad. But viewers did head to HomeAway’s Web site, which received an aggregate traffic spike of 460,000 views during the third quarter, compared to an average of 275,000 per minute during most of the game, according to data from Akamai.
HomeAway spent more than $2 million on the ad, including advertising time during the game and the cost of producing the ad in Los Angeles. The film features Clark and Ellen Griswold going off on a short second honeymoon before joining their kids at a rented beachfront home for a family vacation. Needless to say, the hotel experience is a disaster, starting with the $40 parking fee and a snotty hotel clerk.
The SuperBowl ad kicks off a five-month promotional campaign for the company, which runs a worldwide network of vacation home Web sites.
Media reactions were generally positive. The Hollywood Reporter called it “hilarious,” and the New York Times gave it a thumbs up : “The Chase-D’Angelo reunion worked because the commercial made a product-focused plea: The HomeAway Web site helps travelers avoid vacations that family and friends will lampoon.”
But the Wall Street Journal said HomeAway’s ad “didn’t score well” among advertising and marketing executives surveyed by the paper. Izzy DeBellis, executive creative director for MDC Partners’ Kirshenbaum, told the Journal: “Some things shouldn’t be remade.”
HomeAway tied for 12th on USA Today’s 22nd annual Super Bowl Ad Meter, which tracks the second-by-second responses of a panel of viewers and ranks them best to worst. No. 1 was the Snickers ad featuring Betty White.
UPDATE: You can find my story about how the ad scored with viewers and media analysts here.
You can see the ad here.
What did you think?
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HomeAway bets on the Super Bowl
HomeAway Inc. CEO Brian Sharples passed up two free VIP tickets to the Super Bowl. Instead, he’ll be with his employees at a downtown Austin bar on Sunday to watch as the company’s first Super Bowl ad hits the air.
During the third quarter, a national audience expected to exceed 100 million viewers will see a HomeAway commercial starring Chevy Chase and Beverly D’Angelo reprising their roles in “National Lampoon’s Vacation,” the hit 1983 comedy about a disaster-plagued family trip.
You can find my story about the ad here.
And here is HomeAway’s behind-the-scenes video about the ad.
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CompassLearning charts a new course
After three long years of ownership by Reader’s Digest, educational software maker CompassLearning has a new investor and a fresh blast of energy at its headquarters in downtown Austin.
Last week, the company was sold to Marlin Equity Partners , a California private equity firm, for $32 million, as Reader’s Digest exited bankruptcy.
Tonight, CompassLearning’s 270 employees will gather at a surprise Austin venue to celebrate the beginning of a new chapter.
You can find my story about the company, and a video featuring employees here.
Below: CompassLearning workers create an online learning program.
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Calif.-based LegalZoom may expand in Austin
LegalZoom, a Los Angeles online legal services company, is considering opening a regional headquarters in Austin, with plans to create 600 jobs over the next several years.
You can find the details here.
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Venture investing hit 13-year low in 2009
Venture capital investing in Austin companies slid to a 13-year low in 2009, according to a new survey.
A total of $171.3 million was invested in 47 deals last year, according to PricewaterhouseCoopers and the National Venture Capital Association.
That’s down 49 percent from 2008, when 67 companies raised $333.3 million.
The 2009 total marks the lowest dollar total and the fewest deals since 1996, when money was just beginning to flow into Web-related startups.
In the fourth quarter, 11 Austin companies raised $35.8 million, a 38 percent decline from the fourth quarter a year ago.
But there are promising signs in the new year. In the past three weeks, four investments totaling $57.6 million have been announced. In the two biggest deals, Spiceworks Inc., which makes network management software, raised $16 million from Institutional Venture Partners and others, while CSIdentity Corp., which develops software to prevent identity theft and fraud, raised $35 million in a private equity investment from Investcorp Technology Partners.
Here’s who got money in the fourth quarter:
Troux Technologies, corporate governance software, $10 million
Gowalla, Internet social networking games, $8.4 million
CoreTrace Corp., IT security software, $5.28 million
Terapio Corp., therapeutic applications, $5 million
Undisclosed, medical devices, $3.5 million
Undisclosed, electronics, $1 million
UpLogix Inc., network management, $1 million
HyPerformix Inc., planning/management software, $991,000
cGate Health Inc., health information technology, $338,000
KLD Energy Technologies Inc., electric motor systems, $260,000
Perception Software Inc., enterprise software, $37,000
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Austin startup tracks social media efforts
Social media campaigns have become standard marketing fare, but measuring their effectiveness is still next to impossible.
Austin startup Spredfast says it has the answer with its new Web-based software that helps companies manage their social media efforts.
The five-person company, formerly known as Social Agency, lets clients plan, execute and monitor campaigns across multiple social media outlets, including Facebook, Twitter, LinkedIn and blogging platforms.
Spredfast has managed more than 200 campaigns since September for clients including IBM Corp., Cisco and AOL. University of Texas’ Harry Ransom Center used Spredfast to promote its Edgar Allen Poe exhibit, while Austin restaurant Truluck’s kicked off its social media outreach with the software, adding 659 Facebook fans in four months. Now Truluck’s is using Spredfast to integrate its blog and Flickr photos as well.
“We can measure every piece of content you distribute,” says Ken Cho, Spredfast co-founder. “That lets clients automate the task of collecting metrics, and immediately determine the impact of their message.”
Spredfast offers a free version of its software, in which metrics go away after a month. A standard packages costs $50 per month per campaign.
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Virtual Bridges raises $4 million
Austin-based Virtual Bridges has raised $4 million from Austin Ventures to expand sales, marketing and development of its virtualization software.
Founded in 2006, the company sells virtual desktop infrastructure software, which lets companies change the way desktop software is managed by IT administrators and accessed by employees. By running desktop PCs from a central server room or data center, companies can cut costs and improve security and compliance.
With AV’s backing, Virtual Bridges, which was previously self-funded, will double its staff from 15 to 30, build out sales and marketing and continue developing its flagship product, VERDE, said CEO Jim Curtin.
Curtin said Microsoft’s new Windows 7 operating system will serve as a catalyst for businesses moving to a virtualized system.
“If you’re going to upgrade your operating system and your enterprise to Windows 7, it’s a very logical thing to consider doing that through virtualization,” he said. “Desktop management is one of the biggest expenses in the IT department, and we’re excited to be ushering in a new era where everything will be virtual. We think the opportunities are enormous.”
Virtual Bridges is going up against two long-time industry players — VMware and Citrix.
“In our view, what we have in our favor is a technical advantage, and sheer nimbleness,” said Chris Pacitti, an Austin Ventures general partner.
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Austin tech community launches Haiti campaign
Austin’s high-tech community is swinging into action to help Haiti, with a program that will match up to $535,000 in donations from employees of area high-tech companies.
The matching money is coming from Austin Ventures, philanthropists Donna and Phil Berber, the MFI Foundation, Silicon Laboratories Inc., the Entrepreneurs Foundation of Central Texas and others.
A committee chaired by Austin Ventures general partner Phil Siegel will direct the money raised to organizations providing emergency relief to the earthquake-stricken company. Donations can be made at www.givetoaustin.org/helphaiti
The Entrepreneurs Foundation and Austin Ventures organized a similar campaign after Hurricane Katrina and raised $500,000 to help Austin area nonprofits that provided services to people displaced by the hurricane.
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Spiceworks snags $16 million
In the biggest venture investment in an Austin company since late 2007, Spiceworks Inc. has raised $16 million.
The company, founded in 2006, makes software to manage information technology networks. It also operates an online social network for information technology workers.
The lead investor was Institutional Venture Partners, a Silicon Valley firm that has backed high-profile companies such as Twitter, Netflix and Austin-based HomeAway Inc.
Austin Ventures and Shasta Ventures, which were earlier investors in Spiceworks, also participated in this round. Spiceworks has raised a total of $29 million from investors since it was founded.
You can find my story on the deal here.
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Powered acquires three other companies
Austin-based Powered Inc. announced today it has acquired three smaller companies in a move that the company claims makes it the largest social media marketing agency in the country.
It acquired New York companies Crayon, and Drillteam and Portland, Ore.,- based StepChange in a rollup acquisition financed by Austin Ventures and a second venture investment firm that was not identified.
The terms of the acquisitions were not disclosed, but the company said it has the resources to make other acquisitions or do additional hiring to “fill in the gaps.’
“We believe we are the industry’s first full-service social media agency with scale,” said Joseph Jaffe, former head of Crayon, a consulting firm, who will remain with Powered under the informal title of “chief interrupter.”
The combined company will be based in Austin with more than 70 workers in Austin, New York and Portland and more than 60 corporate clients.
The company intends to work with corporate clients on social media campaigns and with traditional ad agencies, said Aaron Strout, chief marketing officer. Strout said the company aims to add another 20 to 25 new clients this year.
Powered was founded in 1999 as an electronic learning company. It shifted toward social media marketing in the past few years, Strout said.
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Austin’s Phurnace acquired by BMC
Austin-based Phurnace Software, which began as a class assignment by a University of Texas MBA student, has been acquired by BMC Software of Houston.
Financial terms of the deal, announced Thursday morning, were not disclosed.
Phurnace sells software that simplifies the installation of Java applications. The company was started in 2006 by Daniel Nelson as a class project. He and Robert Reeves, a UT economics major, teamed up to pursue the idea, and their business plan won the 2006 Moot Corp competition at the University of Texas McCombs School of Business.
“This is truly a Texas-grown company, from winning Moot Corp. to being a member of the Austin Technology Incubator to raising money from Texas investors,” said Larry Warnock, Phurnace CEO. “Now we’re excited to be acquired by another Texas company, which will rapidly accelerate our growth.”
Phurnace has raised $5 million from backers including Austin investor John Hime, S3 Ventures of Austin and DFJ Mercury, a Texas-based venture fund affiliated with Draper Fisher Jurvetson of Menlo Park, Calif.
BMC said Phurnace’s 21 employees will remain on board. In addition, BMC plans to expand both the product and staff, said Scott Fulton, BMC vice president of service automation products.
“This is a small company with a brand new, powerful technology, and to the best of our assessement, this is the only one out there that’s really proven with large enterprise customers,” Fulton said.
Phurnace significantly reduces the time that large companies spend rolling out and upgrading Java applications, he said. “What used to take weeks or months to accomplish, Phurnace can achieve in minutes or hours,” Fulton said. “Considering that some companies, like banks, upgrade custom applications every few weeks, that’s a dramatic difference.”
BMC plans to invest in the Austin team, including adding development positions, Fulton said.
“In addition to the technology, the thing we liked about the company is the DNA of their technical team, and we want to build on that,” he said.
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National Instruments creates ETF grant program
Austin-based National Instruments said today it has created a grant program to provide software and training services to companies that receive funding from the Texas Emerging Technology Fund.
Companies that receive ETF funding in 2010 are automatically qualified for the NI Texas Emerging Technology Grant, and those who have received funding in previous years can apply for a grant. NI is also accepting applications from companies that qualify for an ETF grant but have not yet received funding.
National Instruments said the goal of its program is to help Texas-based startups get their new product concepts to market quickly by using its prototyping technology.
The ETF was created by the Texas Legislature in 2005 to help expedite the development and commercialization of new technology created in Texas. Twenty-four Austin companies have received ETF funding.
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Austin’s Lombardi acquired by IBM
Austin-based software maker Lombardi Inc. said today it has agreed to be acquired by IBM Corp.
Financial terms were not disclosed.
Lombardi develops business process management software, which cuts costs by increasing efficiency in everyday business processes such as communicating with suppliers or handling billing.
The company, named after football legend Vince Lombardi, was created in 1998 as a division of now-defunct Austin software company Open Plus Inc. and spun off in 2000.
Over its lifetime, privately held Lombardi raised $64 million in venture capital from Austin Ventures, InterWest Ventures and Palomar Ventures.
CEO Rod Favaron said “this is very exciting for us. We’ve been building this business for a number of years and this is a tremendous next step. This marketplace is really exploding and frankly the demand is outpacing our ability to scale. Getting to plug into a global leader like IBM is a great next step for us.”
Lombardi’s 200 employees, 120 of them in Austin, are expected to remain with the company, Favoron said. IBM officials added that they plan to accelerate Lombardi’s efforts.
“Lombardi has built a world-leading team and product, and the passion and vision that the team has is an incredibly good fit for us,” said Craig Hayman, general manager for IBM Application and Integration Middleware. “Together we will take what’s created here in Austin and deliver it all over the world.”
Lombardi is the latest in a string of acquisitions of Austin tech companies by bigger players. Last month, LifeSize Communications Inc., an Austin-based developer of videoconferencing equipment, agreed to be bought in an all-cash deal by Swiss company Logitech International for $405 million, one of the highest prices paid for a local company in recent years. In September, NetQoS, which sells network performance management software, was sold to CA Inc. for $200 million in cash.
For Lombardi, joining forces with IBM provides access to the technology giant’s global sales force and customer base, as well as product development resources. In return, Lombardi gives IBM a foothold in the fast-growing business process management market.
Forrester Research analyst Connie Moore called Lombardi an ideal pick for IBM.
“Lombardi has been such a shining star in terms of its product, the quality of its customers and the quality of employees. It was always a little company that pulled way above its weight and was just really high caliber,” Moore said. “It’s not surprising that if IBM was in the looking-to-buy mode that it chose these guys.”
Lombardi has 300 customers in a range of industries including financial services, government, health care, telecom and manufacturing. They include Ford Motor Co., Dell Inc. and Pfizer. The company doesn’t disclose revenue, but said that in fiscal 2008, its sales almost doubled, rising 47 percent over those in 2007.
Lombardi has long been considered a candidate for an initial public offering, but Favaron said IBM offered the best opportunity for growth.
“All along, the plan was global dominance, and to fund that you either have to work with a company that already has a footprint or you go public. We always maintained options, and from our perpective, this one makes much more sense for the customers and the investors.”
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Austin group is riding the Google Wave
Last week I attended a Google Wave Austin meetup to find out more about how folks are using the Internet search giant’s new communications system.
The gathering drew an interesting mix of folks, from software developers to consultants to small business owners, all plugging into Wave in different ways. You can find my TechMonday column about the group — pictured above — here.
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Mirna Therapeutics gets $5 million state grant
Austin-based Mirna Therapeutics Inc., has received a $5 million award from the Texas Emerging Technology Fund to further its biopharmaceutical research and development.
State officials said it is the largest award of its type since the Emerging Technology Fund was created in 2005. Central Texas has been a leading recipient of grants, with more than $35 invested in about two dozen companies.
Mirna is a spinoff of Asuragen Inc., which is developing molecular diagnostic tests. Founder Matt Winkler spun Asuragen off from Ambion Inc. when he sold Ambion to Applied Biosystems in 2006.
The company is focusing on molecular therapeutics for the treatment of cancer and other diseases.
“Mirna is rapidly gathering momentum as a free standing company,” Winkler said, adding that its research is showing effectiveness in treating lung and protate tumors in mouse models.
Mirna said it has eight full-time employees and plans to expand to 20 over the next year.
Mirna is developing MicroRNA Replacement Therapy, which involves introducing synthetic microRNAs back into tumors to trigger their death.
The company is collaborating with the University of Texas MD Anderson Cancer Center and UT Austin in the molecular therapeutic field. It said it currently has two molecular candidates directed against the treatment of tumors in lung, breast, protate and colon cancers.
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Don’t take it to the walmart veggie or meat area. It would explode in your hands as the sensor readings would be off the chart with chemikills!
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