Gnip, Twitter, Datalogix, and VC Rounds Top Colorado Stories for 2Q
It was a good spring for Colorado’s startups and tech companies, with Twitter’s acquisition of Gnip and big venture rounds earning headlines. Here’s recap of some of the second quarter’s biggest stories.
-Twitter Buys Gnip
Gnip collected public social-media activity from sites like Twitter, Facebook, and Tumblr and sold the data to clients such as marketing and business intelligence firms. The company’s claim to fame, at least outside Boulder, was its partnership with Twitter, which allowed Gnip to sell access to the complete firehose of publicly available tweets. In fact, Gnip was Twitter’s first commercial data partner.
Locally, Gnip’s quick growth and commitment to Boulder made it something of a trendsetter and a leader of the local startup community. By the time it was acquired, it employed more than 90 people. The firm grew to that size while only raising $6.6 million from investors including the Foundry Group, First Round Capital, and SoftTech VC.
Gnip said thanks and goodbye to Boulder—or maybe more accurately Twitter said hello—in June with a charity event that benefited the Entrepreneurs Foundation of Colorado. Gnip donated $587,155 to EFCO, with the money coming from the one percent of founding equity Gnip pledged to EFCO.
Twitter has been pretty quiet about what it plans to do with Gnip, although the blog post from then Gnip CEO Chris Moody that announced the deal said it would help Gnip “to go much faster and much deeper.” Subsequent comments indicate Twitter will keep the Gnip team in Boulder and add employees to a new Boulder office.
-Datalogix Raises $45 Million, Sets Course for Possible IPO
A lot of Colorado tech companies closed funding rounds this month, but none were bigger—and potentially more meaningful—than the $45 million round Datalogix closed in May.
The Westminster, CO-based company collects information about real-world retail sales and other customer data and sells that information to advertisers who use it for digital marketing campaigns. The goal of Datalogix is to tell brands whether their online ads result in real world purchases. Its data also can be used to target customers with online campaigns.
Datalogix’s clients include Facebook, Google, and 77 of the “Ad Age 100” top advertisers.
While Datalogix disclosed the details about the round, it was mum about its next steps, like a possible IPO. Shortly before the round was announced the Wall Street Journal reported the company had met with investment banks and was considering going public later this year.
-Blackstone Comes to Colorado
One of Wall Street’s biggest names placed a big bet on Colorado this quarter.
Blackstone announced in April that it donated $4 million to create the Blackstone Entrepreneur’s Network in Colorado. The donation will create a program intended to help Colorado’s most successful startups “scale up” to become the proverbial hundred-million-dollar, or even billion-dollar, companies. Organizers also want to help strengthen ties within and between important high-growth industries in Colorado’s economy.
The network could fill an empty niche in Colorado’s corporate ecosystem, according to JB Holston, BEN Colorado’s executive director. Accelerators like Techstars and events like Startup Weeks exist to help entrepreneurs create successful startups, but nothing has been organized to help entrepreneurs who have reached the next stage deal with the new challenges they face, Holston said. That includes issues like making acquisitions, planning for an IPO, or handling a rapidly growing workforce.
Ultimately, Holston said he’d like the initiative to help more high-growth companies remain in Colorado, remain independent, and possibly go public.
-Level 3 Communications Buys TW Telecom for $7.3 Billion
Colorado doesn’t see many multi-billion dollar deals, but one is about to take place in its telecom industry.
Level 3 Communications announced in June that it will buy TW Telecom for $7.3 billion in a cash and stock deal. The companies are both based in Colorado and are among the leaders in the state’s tech industry, as well as the worldwide telecom industry. Level 3 (NYSE: LVLT) is based in Broomfield, and TW Telecom (NASDAQ: TWTC) is headquartered in Littleton.
While Level 3 and TW Telecom are both major telecom companies, they have focused on different market segments, and analysts believe the combination brings together complementary assets. If approved, the merger would give the new Level 3, which is an Internet backbone provider whose users include Google and Netflix, access to new business customers thanks to TW Telecom’s dense metropolitan fiber networks in cities around the U.S.
-A Flurry of Funding Announcements
It was a busy quarter when it came to the venture capital beat. Several companies announced seed or Series A rounds, while five companies closed rounds that exceeded $10 million.
Ibotta’s $20 million Series B round was the largest. The Denver-based company makes an app that helps consumers earn cash rebates and helps brands advertise to and engage with customers. Netscape founder Jim Clark led the round and has joined Ibotta’s board.
Galvanize had the next largest round, raising an $18 million Series A round. While best known locally for its co-working campuses in Denver and Boulder, Galvanize CEO Jim Deters said the money will be used to turn Galvanize’s gSchool into an edtech startup that offers courses for software developers at Galvanize campuses around the country.
Orbotix got the ball rolling back in May, announcing it raised $15.5 million. The Techstars graduate is best known for Sphero, the robotic ball controlled by smartphones or tablets. The new funds will help Boulder-based Orbotix develop and market new connected toys like Ollie, the tube-shaped two-wheeled robot it plans to have ready for sale later this year.
ProtectWise is a startup developing cloud-based software that will protect networks. The Denver company is currently in stealth mode, but there’s no way you can hide a $14.1 million round. The company is led by CEO Scott Chasin, who co-founded and was chief technology officer of MX Logic, a Colorado-based network security company that McAfee bought for $140 million in 2009.
Finally, there is Wayin, a Denver-based social media startup co-founded by former Sun Microsystems CEO Scott McNealy. Wayin raised $12.1 million in June. The startup’s software collects social media postings from sites like Twitter, Instagram, and Facebook and displays the media in real time on a client’s website, mobile app, or—in the case of Wayin clients that are professional sports teams—scoreboards. It also helps advertisers find and engage consumers.