ESO Solutions lands $4 million in funding from Austin Ventures in a Series B round.
Chris Dillie, CEO, ESO Solutions, Inc.
The Austin-based company plans to use the money on sales and marketing efforts and for expansion and acquisitions.
ESO Solutions makes electronic medical record software that lets healthcare providers access patient records. The software is aimed at better informing hospitals and emergency response workers about patients’ health and how to best treat them in emergency situations.
“Our customers in EMS and fire have moved from paper-based processes to the electronic age over a very short period of time and are now looking to collaborate with other parts of the health care system in real time,” Chris Dillie, President and CEO of ESO Solutions, said in a statement. “ESO will be using this funding to make certain that we remain the leader and innovator in the area of pre-hospital health care data management.”
Austin-based fisoc, Inc. has closed on a venture capital round with Greycroft Partners.
fisoc, founded in 2010, has more than 1,000 financial institutions as customers.
The company offers data analysis tools online so that banks and credit unions can offer rewards to their debit card customers enrolled in fisoc’s BuzzPoints program.
“We strongly believe that fisoc with their BuzzPoints Platform, product portfolio, management team, and a unique understanding of the intersection taking place between online financial services and social media will enable them to become a market leader,” Ellie Wheeler, Venture Capitalist at Greycroft Partners, said in a news release. “By combining financial services, social media and a rewards program for both bank customers and local merchants, fisoc is positioned to lead a transformation of the customer experience in the banking industry.”
Other investors participating in the financing round were Daylight Partners and angel investors. To date, fisoc has received more than $5 million in funding.
The startup eyeQ won the 2012 Texas Venture Labs Investment Competition Finals last night at the University of Texas’s McCombs School of Business.
The founders, Michael Garel, CEO, and Harish Jayakumar, CTO, beat 15 other teams during the semifinals held earlier in February and three teams in the finals. The students will receive their MBAs this year. As winner of the competition, eyeQ receives a one-year membership and an office in the Austin Technology Incubator. eyeQ will also go on to compete in the 2012 Global Venture Labs Investment Competition that will be held in Austin in early May.
eyeQ's founders Michael Garel and Harish Jayakumar pitch their company
The judges thought eyeQ had the best idea, strongest management team and the clearest and most persuasive business plan and oral presentation.
eyeQ has a system to monitor consumer purchasing behavior which includes in-store cameras, analytical software and a smart screen. The system is designed to encourage consumers to buy products in the store instead of going online to make a purchase.
Every month, people use Amazon’s smart phone price scanning app to do about 20 million product searches, Garel said. That means the consumers go to the store to evaluate the product they want to buy and then they scan it with their phones and buy it online.
“Something needs to be done to prevent these online retailers from hijacking sales from brick and mortar stores,” Garel said.
A $17 billion market exists for analyzing and influencing consumer behavior, he said.
“Retail stores have a compelling need to understand and influence consumer purchasing behavior and provide an “online” experience in store,” Garel said.
That’s where eyeQ comes in. It monitors consumer purchase behavior at the shelf level with eyeQ’s dedicated camera, software and server. The system can then offer the consumer product information on a smart screen at the shelf and display a special price if the consumer buys in the next 60 minutes.
eyeQ has entered into a beta test at Golfsmith’s stores. It then plans to approach Home Depot, Costco Wholesale and other retailers like Target, Lowe’s and Best Buy
eyeQ is seeking to raise $450,000 to finish development and do the initial deployment of its system this year. Next year, eyeQ plans to raise another $850,000 to expand to 30 stores. Its goal is to be in 220 stores by 2014. The founders have already invested $44,000 in the project.
eyeQ competed against Embarkly, Athena Laboratories and Simple Invest.
Rob Adams, director of the Venture Labs Investment Competition, announcing eyeQ as the winner
For the first time in the competition’s history, the judges did not declare a second, third and fourth place finisher, said Rob Adams, director of the Venture Labs Investment Competition. He made the announcement at a gathering at Gabriel’s at the AT&T Executive Education and Conference Center following the competition.
“The rest of the competitors were too evenly matched,” he said. One of the competitors was Embarkly, a pet boarding service, seeking to become the “Expedia” of the $2 billion industry.
The service helps pet owners make reservations at pet boarding facilities, said Travis Skelly, one of its founders. Nicole Dimetman is the cofounder and CEO.
“The problem is that finding a place to board my pet sucks,” Skelly said. “It’s time consuming, inconvenient and just dropping a dog off at some random location is not ideal.”
The Embarkly online marketplace allows users to log on and make a reservation at a boarding facility with little hassle, Skelly said.
Skelly estimates the company could achieve potential annual revenue of $72.5 million with a 10 percent market stake. It faces competition from Findpetcare.com, Petbookings.com, Dogboarding.com and others. The company makes money by generating leads for pet boarding facilities.
Embarkly is seeking $400,000 financing.
Simple Invest showed off its cloud-based automated platform that enables investors to diversify and rebalance their portfolio and improve their long-term investment results.
Texas Longhorn Network interviews Rohit Sharma, CEO of Simple Invest
Rohit Sharma, CEO, said diversification leads to investment success.
His product is aimed at the 96 million people in the U.S. with portfolios of $100,000 to $1 million.
Those investors have to chose among 7581 mutual funds and more than 4,500 broker dealers.
“The market is large,” Sharma said. “There is a genuine pain point.”
Next year, Simple Invest launches with five beta users. It plans to expand to 187,500 users by 2021 and revenue of $34 million.
Its competitors include spreadsheets, financial advisors, product providers and financial software.
Sharma is seeking $550,000 preferred equity for 17 percent stake in Simple Invest.
Athena Laboratories pitched its patented laser treatment for cellulite called FemtoSmooth.
FemtoSmooth is a pain-free, effective, cellulite removal involving a cool laser technology, which is high intensity laser treatment for a very short duration. It effectively treats the cause of cellulite and it’s minimally invasive. It only requires one treatment, which takes 20 to 30 minutes.
Athena Laboratories had the largest management team of all the competitors. The team is comprised of Albert Alvarez, Alex Garcia, Dr. Wendell Craig Johnson, Wayne P. Whitmore, Ravine Woods and Yewen (Wendy) Wu.
The cellulite treatment industry is a $6 billion market in the U.S. with 85 percent of women and 25 percent of men affected by cellulite, said Woods.
“There’s a market demand for an effective treatment for cellulite,” Woods said. “Over the last 10 years – cosmetic minimally invasive procedures are up 110 percent and cellulite treatments are up 30 percent.’’
So far, FemtoSmooth’s inventors have invested $1.4 million and they have 14 patents on the technology. The team is seeking another $7.5 million to take the product to market.
The company projects $45 million in revenue by 2017.
Who’s got $47.6 million in new financing?
That would be Apollo Endosurgery Inc. The Austin-based medical device maker announced that it has landed a big round of funding to develop its line of minimally invasive, scarless surgical procedures.
Apollo Endosurgery’s investors include Novo A/S, Remeditex Ventures, CPMG, Inc., PTV Sciences and H.I.G. BioVentures.
The company will use the money to launch its OverStitch Endoscopic Suturing System and other flexible surgical tools that allow surgeons to perform numerous procedures without making incisions into the patient’s skin.
Austin Ventures announced that Andrew Busey, a well-known Austin entrepreneur, has joined its firm as a venture partner.
Busey formerly served as vice present and general manager at Zynga, makers of Farmville.
“In his new role, Andrew will help the venture team identify and attract very early-stage companies,” John Thornton, general partner of Austin Ventures, said in a news statesman.
Busey built Challenge Games into large social gaming company which Zynga acquired. He also co-founded Pluck, which DemandMedia acquired.
He is a graduate in computer science and marketing from Duke University and holds an MBA from The Wharton School at the University of Pennsylvania.
Lori Hawkins, technology reporter with the Austin American Statesman, has covered Busey for a long time and has written a good story on his latest move.
Steve Papermaster (left) and Dr. Jiren Liu (right)
The venture capital continues to flow into Austin.
This time, Appconomy has landed $10 million in a first round venture debt funding deal designed to accelerate its operations in China.
Appconomy has created a merchant payment system called AppWallet and offers an app for smartphones, tablets and feature phones. The company has a Chinese corporate headquarters in Shanghai and a development center in Chengdu, Sichuan province. Its U.S. headquarters is in Austin. Qiming Venture, based in Shanghai, led the round and its managing director Gary Rieschel will take a seat on the company’s board of directors. Neusoft Corp. also took a stake along with existing investors Western Technology Investment and True Ventures.
“With these two, new cornerstone commitments from Qiming and Neusoft, Appconomy will move rapidly to bring our unique AppWallet marketplace for global brands and local merchants to China,” Steve Papermaster, Chairman and co-CEO of Appconomy, said in a statement.
The tremendous drive toward clean energy exists because of increased demand for fossil fuels from China and the developing world.
“I’m not a clean energy guy, I’m an energy guy,” said Kevin Skillern, managing director of venture capital for GE Energy Financial Services.
He spoke to several hundred people attending the second day of the Clean Energy Venture Summit 2011, the fifth annual event at the AT&T Executive Education Center in Austin.
Skillern’s key points are a huge need exists for software to drive new energy applications, solar is becoming more affordable and microbes show great promise for providing fuels of the future.
So why is GE interested in the clean energy market? It is the biggest industrial company in the world with a market capitalization of $550 billion. GE is bigger than Exxon plus Wal-Mart plus another company, Skillern said.
“About a third of the world’s power comes from equipment made by GE,” Skillern said. “We’re the biggest company in the renewable industry with wind and solar power.”
GE has backed about 40 renewable energy startup companies since 2005, Skillern said. And about 1,500 business plans come across its desks every year, he said.
In the U.S. people take energy for granted, Skillern said. He has four kids and lives in California. When the power goes out, within two minutes his kids “are going crazy,” he said. But in India, days go by without power, Skillern said.
Fuel and energy is fundamental to our lives and that’s why GE formed Energy Technology Ventures with NRG Energy, an energy retailer, and ConocoPhillips, global energy company. The $300 million joint venture invests in emerging energy technology companies. The venture’s key objectives are to make money, collaborate, gain new technology insights and strengthen relationships.
The current investing environment is challenging, Skillern said. Energy tech stocks were negatively affected in the recent market sell-offs. The clean energy index is down 33 percent year to date. And Solyndra , a solar panel maker in Freemont, Calif. that filed for bankruptcy in Sept. 1 and laid off all its workers, proved one of the biggest venture capital busts ever, he said.
“There are few energy venture capital success stories with real profits yet,” Skillern said.
But on the positive side, the demand for energy innovation is strong and energy remains the largest venture capital segment. An estimated 15 percent of all venture capital dollars are going in energy startups. That’s up from less than one percent 10 years ago.
“The world needs new energy technologies,” Skillern said.
Mature companies and breakthrough technologies are beginning to emerge, he said. And the U.S. remains the most fertile hub of innovation for energy.
Overall, China’s energy consumption will soar in the next decade and that’s driving the need for more energy sources, Skillern said.
“China, in aggregate, consumes as much energy as the U.S.” Skillern said. Seven years ago, it was 40 percent, he said.
In China, the big power source is coal, Skillern said. Twenty years out that trend is not going to go away, he said.
By 2020, the passenger car fleet in China will hit 225 million. Meanwhile the U.S.’s passenger car fleet is shrinking
to an estimated 246 million vehicles, down from an all time high of 250 million a few years ago.
“China will consume the equivalent of all the oil produced in Saudi Arabia,” Skillern said. “That’s a long term trend. But it’s a big, big deal.”
The software industry is driving innovation in the energy industry, Skillern said. He quoted from Netscape founder and Venture Capital Investor Marc Andreessen’sessay in the Wall Street Journal from Aug. 20.
“We are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy,” Andreessen wrote. “Six decades in the computer revolution, four decades since the invention of the microprocessor, and two decades in the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.”
Today, more than 2 billion people now use the broadband Internet, up from perhaps 50 million a decade ago, according to Skillern’s presentation. And in the next 10 years, at least 5 billion people will own smart phones giving access to full power of the Internet every moment of every day, he said.
“On the back end, programming tools and Internet-based services make it easy to launch new global software power startups,” Skillern said.
For example, in North America one in every six home energy meters is a smart meter, Skillern said. In five years, it’ll be 55 percent, he said. Worldwide smart meter adoption is at 6 percent and it will grow to 19 percent with five years.
“It’s not going to put power plants out of business,” he said.
But it does provide low costs and easy savings for consumers and allows them greater information about energy consumption and control, Skillern said.
Skillern said his household pays 35 cents per kilowatt hour for electricity, compared to 10 cents nationally. Software will allow consumers to cut their consumption, he said. Smart meters lead to a 10 percent to 15 percent reduction in their bills. Consert has a major deployment underway with CPS Energy in San Antonio. Energy efficiency savings from 140,000 homes generates 250 megawatts to create a virtual power plant with the potential to double. The rollout starts in mid-2012 and will be completed over the following three years.
After his keynote, Kevin Skillern with GE visits with people attending the Clean Energy Venture Summit
Already, Consert has hired 20 people in San Antonio since June and it plans to hire eight to ten more by the end of 2011 and more than 150 during the next three years.
Another big trend is making solar energy more affordable. Solar energy costs 30 cents per kilowatt hour, compared with an average of 10 cents nationwide for traditional energy sources. The idea is to make solar a “grid parity” technology which means it can be produced at or less than the cost of delivered grid power without subsidies. Right now, California, New Jersey and Massachusetts have achieved grid parity with government subsidies.
The fluctuation in price of solar energy has to do with location, Skillern said. In Hawaii, solar power is just 9 cents.
“The economics of solar have gotten better by 54 percent in the last three years,” Skillern said. Solar energy is a $70 billion industry today. GE has invested in Solar Edge.
The last big trend is microbes, Skillern said. Some types of algae and other microbes offer potential fuel sources for the future.
“Energy represents one of great societal challenges of our time,” Skillern said. “Breakthrough energy technologies are an essential part of the solution.”
Ariane Fisher, founder of Storymix, presents at Demo Day 2011
Like a hungry mob at an all you can eat buffet, people gorged themselves on entrepreneurship information Wednesday at the third annual Capital Factory Demo Day 2011.
The day-long event at the AT&T Conference Center in downtown Austin kicked off with a keynote speech by Bob Metcalfe, the co-inventor of the Ethernet, founder of 3Com and now a professor of electrical engineering and director of innovation at the University of Texas at Austin.
Metcalfe offered great advice to the entrepreneurs in the crowd. He said a lot of young entrepreneurs appeared to be “on the verge of dying.” But, instead of pulling all nighters and eating ramen noodles, he told them to get in shape, sleep at least 8 hours and eat healthy meals. The crowd seemed skeptical.
Metcalfe also advised the entrepreneurs to write all the time, give speeches and learn about selling to pitch the company’s products.
“Some entrepreneurs think sales people are lower than whale shit,” Metcalfe said. “Sales people are a different species but they’re carbon-based like you.”
And sales people are essential to the success of a startup, he said.
Metcalfe praised Austin’s entrepreneurial spirit and innovators like Michael Dell of Dell and John Mackey of Whole Foods.
To further foster young entrepreneurs, Metcalfe also launched the one-semester start-up at the University of Texas. Joshua Baer, co-founder of the Capital Factory, is also an instructor.
Following Metcalfe, the five Capital Factory 2011 Finalists pitched their companies in eight-minute presentations with slides. At the end, SwimTopia won the applause meter reading as the audience favorite.
Brian Sharples, co-founder of HomeAway talking entrepreneurship at Demo Day 2011
At noon, Brian Sharples, founder of HomeAway, talked about pursuing his passions and launching his company at the age of 44 after making a lot of other mistakes.
“Surround yourself with as much experience as possible,” Sharples said.
Also, do your homework, Sharples advised. Before he and his co-founder Carl Shepherd started HomeAway, they spent more than six months researching the vacation rental market. They knew very little about the market. They soon discovered Expedia bought VacationSpot in 1999, but the business failed within a year. They found the former CEO of Expedia to find out what went wrong. Turns out Expedia tried to turn the business into a hotel business and get rid of the subscription fee model that customers liked. Owners also liked to interact with renters before leasing their properties. Expedia took away that conversation. HomeAway brought it back.
HomeAway, which recently went public, acquired more than 70 companies to create a business to make it as easy for consumers to find, book and stay in a vacation rental home, as it is to book a hotel.
“If you have a good idea be quiet about it until you’re ready,” Sharples said. For three or four years while HomeAway built its business and acquired competitors, the company didn’t talk to the press, Sharples said.
Sharples told entrepreneurs to be humble, to worry about competitors, to be passionate and to remain flexible. Also, entrepreneurs must have a profit model. The days of starting a business with no clear idea of how to make money, like Twitter, don’t work, he said.
“Never settle, always try to make things better,” Sharples said.
During lunch, investors mingled with entrepreneurs at an actual all you can eat buffet of veggies, chicken, beef, mashed potatoes, salad and desserts.
Silicon Valley Bank, Silverton Partners, AustinVentures, RedHouse Associates, Clearstone Venture Partners, Wildbasin Investments and Entrepreneurs Foundation of Central Texas sponsored the event.
Following lunch, 17 entrepreneurs gave three minutes pitches on their companies. They included Apptive, CopperEgg, The Daily Dot, Forecast, Greenling, Hoot.me, ihiji, Infochimps, Loku, OwnLocal, NightRaft, Ravel, Ricochet Labs, Rockify, Spanning, Stormpulse, VolunteerSpot and WPEngine.
Next, Auren Hoffman, CEO and co-founder of Rapleaf, talked about recruiting and hiring tech talent. He seemed to contrast sharply with Metcalfe’s advice from the morning. Hoffman advised entrepreneurs to work long hours and hire others who work long hours six days a week. He also advised them to return calls and e-mails in a timely fashion.
The day-long Demo Day ended with a call to action. Baer advised everyone to go to the closest bar to talk and then to take the shuttle bus to join the Startup Crawl, a series of stops at various high-tech businesses around town to meet the companies, drink and mingle.
At The Capital Factory’s office, founder Josh Baer gave an overview of Demo Day 2011 during the Startup Crawl.
The third annual Capital Factory Demo Day took place on Wednesday at the AT&T Conference Center in downtown Austin. Five Capital Factory Finalists showed off their companies to investors and others at the day-long sold out event, which was livestreamed. Each of the five companies spent 10 weeks to nurture their ventures.
