SailPoint & WatchGuard IPO, HX, Technium, ResMan, & More Texas News
Houston and the rest of the Texas Gulf Coast are largely back to business following Hurricane Harvey. Among the more notable news is Houston tech and civic leaders unveiling a new fund of funds aimed at better connecting the city’s large corporations and startups to venture capital across the country.
—Houston Exponential is planned to be a $40 million to $50 million fund of funds that will invest in venture firms across the country. There are no strings attached but Houston leaders hope the interaction will lead to further engagement, which will prompt those investors to come to Houston and consider investing in local startups.
—The fund is the latest comer to the Texas investment landscape. We spoke to three new firms that have set up shop in Houston and Dallas: Cottonwood Venture Partners, Intelis Capital, and Work America Capital.
Two Texas technology companies announced in the last month that they are going public.
—Cybersecurity firm SailPoint in Austin filed for an initial public offering on the New York Stock Exchange. While the company didn’t disclose how much it hoped to raise in the IPO, SailPoint has raised $27.3 million in funding, according to Xconomy’s National Correspondent David Holley.
—WatchGuard, which sells mobile video cameras and evidence management software to law enforcement, intends to go public, according to Renaissance Capital. The suburban Dallas company filed documents with the SEC Oct. 19 to raise up to $75 million in an initial public offering. The company, which is based in Allen, TX, was founded in 2002 and booked $93 million in sales for the year that ended Sept. 30, the investment firm said. WatchGuard plans to list on the Nasdaq exchange under the symbol WGRD.
Innovation needs innovating. That’s the premise of a new book called “The Innovation Blind Spot” by Ross Baird, founder and CEO of Village Capital. Baird’s firm invests in companies that don’t fit the traditional techie mold: the founders are frequently women and from underrepresented minority groups, and they are not based in Silicon Valley or on the East Coast. In our latest installment of “Xconomy Bookclub,” Baird points out that most venture capital goes to entrepreneurs in New York, California, and Massachusetts. Since that key ingredient—money—doesn’t reach startups in other parts of the country, Baird writes, “the idea of entrepreneurship as a meritocracy is wrong.”
—That conversation, along with a column by the New York Times’ Farhad Manjoo, raises an interesting issue. Does the dominance of large technology players help to snuff out the innovation that made those companies possible?
Lastly, here are some updates and new items about other Texas startups:
—Technium, a Dallas-based “matchmaker” of university IP and startup founders, announced a new partnership with Intellectual Ventures in Seattle. The purpose of the collaboration between IV’s Invention Science Fund, or ISF, and Technium is to screen and validate technologies that can then be transformed into new, potentially venture-funded startups, the companies said in a press release. As part of the program, Technium’s entrepreneur network can receive financial support and mentorship from ISF. The initial projects involve innovations in areas such as voice recognition security, medical devices, secure charging systems, and new food processing methods, according to the Oct. 25 statement.
—ResMan, maker of property management software for multifamily developments, announced on Oct. 23 that it has raised $36 million from Mainsail Partners in San Francisco. The company, which is based in Plano, TX, says it will use the funds for software development and to make hires in its marketing and sales teams.
—Houston edtech entrepreneur John Kennedy is intimately familiar with how technology can be used to help schools: He’s a recent graduate of high school. He and John Ruff, an edtech entrepreneur most recently with ScribeSense in Austin, have founded Mesa Digital, which just signed up the Houston Independent School District, the largest district in Texas, according to a blog post on Station Houston’s website. Mesa has software that helps to digitize some of the nuts-and-bolts of the guidance counseling process, such as analyzing students’ schedules so they are placed in the correct classes more quickly. The current manual process is error-prone, the men say, resulting in downtime that costs HISD nearly $30 million a year. Mesa’s software is expected to be rolled out in Houston’s 56 high schools by January 2018.