Tech Between The Coasts 019 | Wednesday, September 11, 2019
Practical AI, every (town) is special, stop reading “startup porn,” the worst sales promo ever, “heartland visas,” Motor City 2.0, emotional call centers, long-haul video games, startup perks
Want to receive our newsletter every Wednesday? Subscribe on our website.
TL;DR
What We’re Thinking: practical AI
What We’re Reading: every (town) is special, stop reading “startup porn,” the worst sales promo ever, “heartland visas”
Deals & More: Motor City 2.0, emotional call centers, long-haul video games, startup perks
What We’re Thinking
Today’s newsletter comes to you live (and a bit late) from the Indianapolis, aka the Crossroads of America. I’m here for TechPoint’s annual VC Speed Dating event, where local, regional, and national investors are meeting with Indiana startups.
This week, Jonathan Vanian wrote at Fortune on where the “blue ocean” in AI may still be, drawing on comments from famed Silicon Valley investor Andrew Ng at a recent TechCrunch conference:
Andrew Ng, a prominent Silicon Valley executive and investor who previously led some of the biggest A.I. projects at Google and its Chinese rival Baidu, says the next wave of A.I. will be in industries in which the tech giants aren’t firmly rooted. Think manufacturing, agriculture, and healthcare. […] [E]xecutives at traditional businesses must think hard about how they can apply deep learning, a key component of artificial intelligence, to their specific needs. For them, Ng has a few tips. For instance, agriculture companies could affix sensors to their farming equipment to collect data about their fields and then use A.I. techniques to analyze that data to obtain better crop yields.
The nuance of Ng’s argument is that ultimately the quality of the data — and what you do with it — is what matters. Silicon Valley is obviously a nexus of tech talent, but talent only gets you so far. Knowing what your data means, and therefore what you can actually do with it, is exceedingly important.
Ultimately, we agree that folks who have lived experience in established #BetweenTheCoasts industries — think healthcare, agtech, transportation, and more — are best equipped to know how to actually act on the data that recent advances in technology have enabled. Doesn’t it just make sense that entrepreneurs with that lived experience will build the most robust companies?
What We’re Reading
Maryam Haque from the National Venture Capital Association explains why “up-and-coming hubs [should] focus on what makes them unique and supporting startups in their ecosystem” rather than trying to become the next “Silicon Valley.”
Joel Wish begs you to stop reading “startup porn” at Medium — a sentiment we’ve echoed repeatedly in this newsletter.
The New York Times has an in-depth profile on a fascinating venture (AppHarvest) in my home state of Kentucky that is poised to challenge notions of what agriculture means in 2019.
Four of six cities featured in Amazon’s upcoming “Career Day” are #BetweenTheCoasts cities — namely Arlington, VA; Chicago; Dallas; and Nashville.
Not directly #BetweenTheCoasts related, but The Hustle has a fascinating story on the dangers of unsustainable sales promotions, which seems particularly prescient in our current times.
The Economic Innovation Group (EIG) has proposed “heartland visas” to “create more avenues for immigrants to settle in areas that are otherwise shrinking.” Fascinating insights:
Current skilled immigration policy largely benefits populous, booming metro areas but fails most heartland communities. A new place-based “Heartland Visa” program could become a powerful economic development tool for communities facing the consequences of current demographic trends, but not content to simply manage decline. Such a program would constitute a flexible, additive, and voluntary pathway for skilled immigrants to come to the United States. Eligible communities would opt-in to hosting visa holders, who would provide a much-needed catalyst of human capital and entrepreneurial vitality into parts of the country that retain considerable economic potential.
Deals
Plymouth, MI-based Rivian — an electric vehicle startup that raised $1.2B over the past couple of years from Amazon and Ford, among others — raised $350M from Cox Automotive.
Columbus-based Root Insurance — an AI-powered auto insurance startup — raised $350M at a $3.65B pre-money valuation, co-led by Coatue Management and DST. This confirms the round that we mentioned back in issue 016.
Tampa-based ComplianceQuest — a provider of enterprise quality management software targeted at the life science and manufacturing firms — raised $36M led by Insight Partners.
Salt Lake City-based Cogito — maker of a “call center emotional intelligence” platform — raised $20M from investors including New York Life Ventures, Salesforce Ventures and Goldman Sachs Growth Equity.
Denver-based Hotel Engine — a business travel-focused hotel management platform — raised $16M led by Telescope Partners.
Cheyenne, WY-based CasperLabs — an open-source blockchain platform — raised $14.5M led by Terren Piezer; other investors included Arrington XRP Capital, Hyundai, Consensus Capital, Axiom Holdings Group, Bell LP, OneBoat Capital, MW Partners, Blockchange Ventures, Hashkey Capital, and Distributed Global.
Tempe-based Drivetime — a developer of interactive voice games for drivers — raised $11M led by Makers Fund; Google and Amazon also invested (via their respective affiliated voice assistant funds).
Austin-based SeekOps — a drone-based sensor and analytics company targeted at the natural gas industry — raised $7.3M from investors including OGCI Climate Investments Fund and Equinor Technology Ventures.
Houston-based Sourcewater — a developer of oil and gas analytics software — raised $7.2M led by Bison Technologies; other investors included Marubeni Corporation and a number of energy-focused family offices.
Austin-based Realized — a provider of investment property wealth management software — raised $6M led by Calibrate Ventures led; Rice Park Capital also participated.
Denver-based Dapix — a company building an interoperable blockchain wallet — raised $5.7M led by Binance Labs; other investors included Blockwall Capital, NGC Ventures, and LuneX Ventures.
Denver-based Zestful — a company helping startups compete with large employers’ employee perks programs — raised $5M led by Thrive Capital; other investors included Box Group, Y Combinator, Matchstick Ventures, Third Kind Capital, and Shrug Capital.
Scottsdale-based Aural Analytics — a developer of a speech analytics platform — raised $4.3M co-led by Morningside Ventures and Tamarisc Ventures.
Austin-based Zippity — an onsite, comprehensive car care provider for the workplace — raised $3M led by Schooner Capital; other investors included BP Ventures and LaunchPad Ventures.
Denver-based Flatfile — maker of a tool to clean and organize data — raised $2M led by Afore Capital; other investors included Founder Collective, Designer Fund, Liquid2, and Gradient Ventures (Google’s AI-focused venture fund).
Denver-based Engage Mobilize — a digital field management, procurement, and ticketing platform for the oil and gas industry — raised an undisclosed amount led by Cottonwood Venture Partners.
Funds
Austin-based Vista Equity Partners raised $16 billion for its seventh tech buyout fund.
Minneapolis-based Vensana Capital closed $225M for its first healthcare-focused VC and growth fund.
Exits & Acquisitions
St. Louis-based marketing automation platform Hatchbuk merged with Benchmark Internet Group.
Houston-based cybersecurity platform Beyond It was acquired by Xact Data Discovery, via its financial sponsor JLL Partners.
Dallas-based real estate marketing platform HipPocket was acquired by HT Mobile Apps.
Events
TechPoint will host another iteration of their curated VC Speed Dating event in Indianapolis from September 11–12.
One of the most jam-packed free startup events #BetweenTheCoasts — Denver Startup Week — is next week, September 16–20.
Pure // Accelerate 2019 — a technical conference helping engineers stay on the cutting edge of the cloud — will be held in Austin from September 15–18.
The 2019 INDUSTRY Product Conference — a conference that helps product leaders build, launch, and scale world-class software products — will be held in Cleveland from September 23–25.
The 12th annual Venture Atlanta conference, which brings together tech companies and investors from the Southeast and beyond, will be held in Atlanta from October 16–17.
The 2019 Northwest Arkansas Technology Summit will be held in Bentonville, AR from October 20–23.
This year’s Startup Connection, which facilitates informal interactions among early stage startups, investors, and other members of the innovation community in the St. Louis region and beyond, will be held in St. Louis on November 6. Applications for interested startups to participate in the Venture Showcase are due by September 3.
