Tech Between The Coasts 020 | Wednesday, September 18, 2019
City vs metro growth, “unorthodox” Big Ass Fans, VC’s dirty laundry, debit cards for teens, next-gen department stores, eco-friendly cleaning supplies
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TL;DR
What We’re Thinking: city vs metro growth
What We’re Reading: “unorthodox” Big Ass Fans, VC’s dirty laundry, the importance of good data in AI
Deals & More: debit cards for teens, next-gen department stores, safer fleets, eco-friendly cleaning supplies
What We’re Thinking
This week’s newsletter is coming to you from the Mile High City, where Ron and I are meeting investors and startups from #BetweenTheCosts at Denver Startup Week.
This week, we came across a fascinating analysis of the fastest and slowest growing US cities from Richard Florida at CityLab. There are a few twists to the typical way folks look at these trends:
For one, Florida looks at trends with regard to both legally defined cities and metro areas. Analyses of “city” growth tend to actually use metro area data rather than cities, but looking at it both ways produces some interesting findings. For example, Nashville ranks first in terms of metro growth (15.7%), but 24th in terms of city growth (6.9%). Columbus and Indianapolis are two other #BetweenTheCoasts metro areas that appear in the top 10 metro areas, but don’t appear in the top 10 cities.
Florida also examines job markets under both paradigms. He finds more consistency among this measure: #BetweenTheCosts cities like Atlanta, Nashville, Austin, Raleigh, and Denver appear in the top 10 in both. Interestingly the entrenched tech centers (think New York, Boston, and San Francisco) are all out of the top 10.
There are a ton of other interesting insights, so I encourage you to check out the entire piece and see where your city ranks.
So what’s the takeaway for #BetweenTheCoasts cities? I’d say it’s a mixed bag. Metro area growth is certainly better than no growth at all. But historically, city growth is a better indicator for long-term economic vibrancy. This is especially true for startups, where a dense concentration of talent is crucial for the “random collisions” that ultimately make the ecosystem healthy and for attracting millennials who value a thriving urban core when it comes to quality of life. Areas that appear on the metro list but not the cities list should consider what tools they have available to achieve consistency on both lists if they want to ensure their continued relevance in the years to come, as the economy continues to undergo massive changes.
What We’re Reading
The Austin- and San Antonio-focused tech publication Silicon Hills has a great profile of Austin-based entrepreneur Carey Smith. Smith is a bit of a hero of mine, having founded the awesomely-named Big Ass Fans in my home state of Kentucky about 20 years ago and bootstrapping the business to $265M in annual revenue. He later sold the company and moved to Austin to start consumer-focused Unorthodox Ventures (he’s got a thing for unorthodox names).
This week, the New York Times featured a high-profile example of the consequences of VCs publicly airing their due diligence “dirty laundry”. Speaking candidly to a founder about the specifics of why an investment isn’t a great fit is always a good thing. But doing it in public — or worse yet, sullying the name of the company in the process — is just not cool.
The CEO of Valley-based data cleaning startup Trifacta, Adam Wilson, isn’t mincing words when it comes to the importance of “garbage data in, garbage data out” in AI: “People have woken up to the fact that if your data quality is bad, your A.I. and machine learning is going to be worthless,” Wilson said. “The last thing they want to do is to automate bad decisions faster based on bad data.”
Deals
Tucson-based TuSimple — a developer of self-driving trucks — raised $120M led by Sina Corp.; other investors included CDH Investments, Lavender Capital, and Mando Corp.
Atlanta-based Greenlight — a fintech company providing debit cards targeted at teenagers — raised $54M led by Drive Capital; other investors included JPMorgan Chase, Wells Fargo, TTV Capital, Live Oak Bank, and Relay Ventures.
Provo, UT-based Dental Intelligence — a developer of dental practice workflow automation software — raised $34M from K1 Investment Management.
Dallas-based Neighborhood Goods — a curated department store featuring online D2C brands — raised $11M led by Global Founders Capital; other investors included Forerunner Ventures, Serena Ventures, NextGen Venture Partners, Allen Exploration, and Capital Factory.
Kansas City-based Replica — a spinout from Alphabet’s Sidewalk labs building an urban “people movement” tool — raised $11M led by Innovation Endeavors; other investors included Firebrand Ventures and Revolution’s Rise of the Rest Fund.
Salt Lake City-based Voxpopme — a realtime video feedback and analytics company — raised $9M led by Origin Ventures.
Boulder-based Front Range Biosciences — an agtech company optimizing hemp, coffee, and high-value crop production without pesticides or viruses — raised $8.5M from investors including Militello Capital, Welcan Capital, AFI Capital, Phyto Partners, Harvard Business School Alumni Angels of New York, New York Angels, Sand Hill Angels, Arcadian Capital Management, Halley Venture Partners, and Salveo Capital.
Pittsburgh-based Idelic — a commercial/industrial transportation safety platform — raised $8M led by Origin Ventures; other investors included TDF Ventures, Birchmere Ventures, Bain Capital Ventures, and SaaS VC.
Boulder-based InDevR — a biotech platform for developing analytical technologies for biologic process development and monitoring — raised $7M from Adjuvant Capital.
Louisville, KY-based Truman’s — a D2C cleaning products company — raised $5M from Henkel, Uncommon Denominator, Starting Line, and BFG Partners.
Chicago-based Forager — a cross-border logistics platform — raised $3.3M co-led by Chicago Ventures and TFI International.
Funds
Washington, DC-based Revolution Ventures raised $215M for its third venture capital fund. Though folks can argue whether DC counts as #BetweenTheCoasts or not, their thesis of focusing their investments outside of the typical VC hubs certainly earns it a place in this newsletter.
Exits & Acquisitions
Nashville-based SmileDirectClub raised $1.35B in its first day of public trading. The IPO valued the company at about $9B. However, the company’s stock fell about 30% in its first day of trading, making it one of the worst opening days of 2019. It has since recovered somewhat, but it’s still…not great.
Denver-based Ping Identity — a digital authentication and identity management software platform — plans to raise ~$185M this week in an IPO priced at ~$14-$15 / share.
Le Mars, IA-based Wells Enterprises (the parent company of Blue Bunny and other ice creams and frozen treats) acquired Eden Creamery (my favorite ice cream, Halo Top’s, parent company).
Austin-based NurturMe — a maker of all-natural, organic baby and toddler food — was acquired by Grays Peak Capital.
Events
One of the most jam-packed free startup events #BetweenTheCoasts — Denver Startup Week — is going on through the end of the week (September 20).
The Forbes 2019 AgTech Summit is happening today and tomorrow (September 18–19) in Indianapolis.
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.
Twin Cities Startup Week runs from October 9–16 across the Minneapolis-St. Paul area.
Memphis’ 7th Annual Startup of the Year Competition & Summit is happening October 14–16.
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.
