What. How is it October already?
Hope you had a breakthrough Q3 as more and more tech teams seem to be scaling up faster than ever. And I’m sending good vibes for a strong finish if you’re among the growing group of SaaS companies that shifted their quarters one month ahead. Regardless, these last few weeks brought some exciting news for startups between the coasts.
So far this year, $15.3 billion has been raised nationwide for Series B rounds and startups beyond Silicon Valley are taking a larger share of the funding than usual. In fact, four of the top five Series B rounds were from “Unvalley” tech companies.
We’ll dive deeper into those companies later in this email, but Series B fundings are just the tip of the iceberg when it comes to momentum in the Mighty Middle.
Our friends at Rise of the Rest Venture Fund recently announced a $2 Million fund for Black entrepreneurs, which is about to unlock a whole lot of untapped potential in tech hubs between the coasts. We’ve covered this growing trend and need for change in previous emails, but it’s exciting to see more change coming.
Read on in this edition of The Spark to learn more about these stories as well as the opportunities in telehealth as the country surpasses 1 billion virtual healthcare visits that have already happened this year alone.
In This Issue:
- 🎉Series B in the Mighty Middle
- 💪🏾Investing in Black Founders
- 🏥The Healthcare of Tomorrow
P.S. There are some really interesting virtual events coming up that should be on your radar (including an all-day Flyover Tech Fest today). Be sure to check out the new section in this email featuring upcoming tech conferences covering the Mighty Middle and beyond.
🎉Series B in the Mighty Middle
It’s time to celebrate Series B funding—especially in the Mighty Middle. For the first time in more than five years, west coast companies claimed less than half of all Series B funding in 2020. Of the $15.3 billion raised nationwide for Series B rounds so far this year, the state of California only took 43% of it—down from 50% in 2019. About half is going to biotech firms in a continuing trend of big things happening for that industry throughout the pandemic.
Series B funding can be seen as a bellwether for the broader U.S. startup ecosystem. So far this year, it’s held up at historically high levels, but California-based startups secured the lowest percent of Series B dollars in years. https://t.co/upEDK8XWhb pic.twitter.com/q4vJnlM64Z
— crunchbase (@crunchbase) September 18, 2020
Four of the top five biggest Series B rounds this year went to companies between the coasts, including:
- Bakkt, a financial services company based in Atlanta, GA.
- Berkshire Grey, a handling system that automates omnichannel fulfillment based out of Lexington, MA.
- Thrive Earlier Detection, a healthcare company focused on saving lives by earlier detection of cancer, a routine part of medical care. Based in Baltimore, MD.
- StackPath, a SaaS company developing technology to enable a safer Internet from cyber security threats. Based out of Dallas, TX.
Everything’s bigger in Texas. StackPath’s massive Series B round wasn’t just one of the biggest in Series B funding this year—it was the biggest funding round in Dallas/Fort Worth this year, period. The edge computing and security-as-a-service company hasn’t released final figures on the round, but releases from the company suggest it was at least $216 million.
We’re excited to see more incredible news like this for the next generation of great hubs like Dallas and Atlanta. Congrats to these exciting and thriving companies!
💪🏾Investing in Black Founders
Shining a light and jumpstarting tech. Steve Case’s Rise of the Rest Venture Fund announced a new $2 million fund specifically for black entrepreneurs in tech between the coasts.
To date, less than 1% of VC funds go to black founders—a major imbalance in an industry dominated by white males. Steve Case and his partner Rodney Sampson hope not only to invest in Black-led startups but also help foster relationships that will lead to further growth for Black founders in the tech space.
BREAKING: @Revolution’s @RiseOfRest is proud to partner with @theohubs and @100blackangels, with support from @MorganStanley on the #RiseOfRest Virtual Tour: Equity Edition to fund and support Black founders. Learn more: https://t.co/zkWerw1V9P pic.twitter.com/mkMjMQeqNm
— Rise of the Rest (@RiseOfRest) September 24, 2020
More diversity means more innovation. Black founders are speaking up to challenge Silicon Valley’s implicit biases and encourage VCs to reframe their investment criteria and make tech more diverse.
Case in point: Former Indianapolis Colts player Mike T. Brown, whose move to Silicon Valley to join Draper University was a jarring transition:
“A lot of the meetups and things I was going to, I typically would be one of the only Black folks there,” Brown says.
Both in Silicon Valley and throughout the Unvalley, we look forward to seeing more exciting news like this as the industry continues to work towards welcoming and investing in more diverse voices.
🏥The Healthcare of Tomorrow
Hey Siri, the doctor will see me now. Even before the pandemic hit, telemedicine was seeing a meteoric rise. Between 2014 and 2019, the industry’s revenue grew 34.7% to a total market size of $45 billion, and that’s only expected to grow to $175 billion in the next five years.
💊Since the #COVID19 pandemic took hold, some prescription delivery startups are seeing a surge in demand from new users turning to the convenience of delivery. Last year proved to be the biggest for prescription delivery startup funding. #Telemedicine: https://t.co/1AM4SvyAPD pic.twitter.com/dHYuVyWNrj
— crunchbase (@crunchbase) May 14, 2020
Much of this growth is happening in non-traditional tech hubs, with big players including companies like:
- DispatchHealth, is a Denver based provider of tech-enabled in-home health care.
- Heal offers house calls and video appointments with doctors for primary care and services. Based in Los Angeles, CA.
- SonderMind is a Denver based managed marketplace redesigning behavioral health to be accessible, approachable, and utilized.
- RelayOne, is a Durham based software solution that offers a compliant surgical schedule.
- Transparent Health Marketplace connects payers & providers of ancillary healthcare in their automated & dynamic platform. Based in Wayne, PA.
And then COVID-19 happened. Providers are reporting anywhere from 50 to 175 times the number of virtual visits compared to the pre-pandemic world, with COVID-19-related telemedicine visits accounting for 90% of the 1 billion virtual visits that have happened this year alone.
With the pandemic’s effects starting to seem permanent in some aspects of life, experts are adjusting their already high expectations for the industry. McKinsey & Company is now projecting telemedicine could be worth $250 billion or more in the near future—and that’s just in the US.
As the world keeps changing, tech can always find a way.
Speaking of tech can find a way, we’re getting closer to celebrating the top tech cultures between the coasts! Keep an eye out for our upcoming announcement opening up online, with our 10-minute application for this year’s Tech Culture Awards. (For real, maybe even five if you’re quick.)😉
EXPLODING WITH OPPORTUNITY
Top fundings, acquisitions, and IPOs between the coasts.
- Greenlight Financial Technology has announced it raised $215 million in a Series C round. The round was led by Canapi Ventures and TTV Capital with participation from new investors.
- SigmaSense, a company innovating around touch screen performance, announced it closed $22 million in Series A funding. The round was led by Foxconn Technology Group with participation from strategic investors Corning, E Ink, GIS, and MRI.
- Chicago based NextCapital has closed a $30 million in growth financing. The round was led by FP Credit with participation from IA Capital Group.
- Data Gumbo announced it raised $4 million in a Series B funding. The funding was led by newcomer L37 and included Saudi Aramco Energy Ventures and Equinor Ventures.
- Within3, an enterprise solution for life science collaboration and communication, announced it closed over $100 million in growth funding. The round was led by Insight Partners with participation from Silversmith Capital Partners.
Los Angeles, CA
- daring, a CA-based startup building a portfolio of e-commerce brands, raised $8 million in funding. The round was led by Maveron with participation from GoodFriends, Stray Dog Capital, Palm Tree Crew Investments, and others.
- Artificial intelligence company Beyond Limits announced it has raised $133 million in a Series C round. The round was led by new investor Group 42 and existing investor BP Ventures.
- Fulcrum announced it raised $3.1 million in seed funding to accelerate its platform. The round was led by Motivate Ventures with participation from Battery Ventures, Matchstick Ventures, Bread & Butter Ventures, and others.
- BrightHealth announced it raised $500 million in Series E funding for growth in its 43 markets. Investors include Tiger Global Management, T. Rowe Price Associates, Blackstone, and Bessemer Venture Partners.
San Diego, CA
- Point Predictive, a machine learning solutions company, has raised an additional capital in its recent Series B financing. Napier Park Financial Partners led the investment round with participation from the company’s existing investor, Mosaik Partners.
STARTUPS STILL HIRING
Know someone looking for a new gig? The economy is unpredictable right now, but startups in the middle of the country are still hiring.
We have a few our Top Powderkeg Picks below:
Companies who are hiring:
- DemandWell, an SEO coaching platform for B2B SaaS companies, is hiring an account executive.
- Purpose HQ, a company that provides data-driven solutions for talent-related problems, is hiring for several business development roles.
- Leadpages, a digital lead generation platform hiring, is hiring a customer success specialist.
- phData, a big data managed services and data science consulting company, is hiring a program manager, data scientist, and a data engineer.
- Core10, a software development company that creates fintech solutions, is hiring several QA engineers.
- ProviderTrust, a solution for healthcare credential storage and management, is hiring an email marketing leader, technical support specialist, and a writer.
- PASKR, a cloud-based construction management solution, is hiring several client support specialists, SDRs, and marketers.
- Campus Logic, an edtech company, is hiring a sales director, product designer, and several marketers.
- Paradox, an AI assistant company, is hiring for roles in product management and design, marketing, operations, engineering, and more.
Multiple Locations or Remote:
- Cordial, a content marketing platform, is hiring a product marketing manager, sales director, engineers, and more.
- Calabrio, a workforce optimization suite, is hiring for several engineering and implementation roles.
Phoenix, AZ: The Desert’s Next Startup Oasis
Phoenix has become a magnet to tech companies for three reasons: a lower cost of doing business, more affordable quality of life, and a strong and growing talent pool. The Phoenix area ranked #15 in the nation in 2019 tech employment, with tech companies making a $25.8 billion impact in the area.
Read on to learn why this tech oasis is heating up with untapped potential.
Key Tech Facts About Phoenix, AZ:
- The Greater Phoenix is home to five Fortune 500 companies.
- Some Fast-Growing Startups: InterPayments, CampusLogic, Paradox, Virtuous
- Major industries in Greater Phoenix include high-tech manufacturing, tourism, and construction.
Awards and Accolades:
- Chief Executive Magazine rated Arizona #9 in the country for best state for business in 2015.
- Arizona is ranked #1 as the best state for future job growth in the United States, according to Forbes in 2020.
- Arizona ranked #2 in the nation for new tech business establishments, bringing its total to 12,163, according to the Cyberstates 2020 report.
📅Upcoming Virtual Events:
Get the inside scoop on some of the most exclusive tech events happening around the community to reach your full potential.
- Flyover Tech Fest is a showcase of pride along with the amazing stories from a great lineup of speakers on topics ranging from fundraising to hiring to scaling businesses. Gain direct access and join thousands in the tech community. (It’s happening today!)
- UNMET Arizona Fall 2020 is a virtual conference aimed at helping early-stage companies in under-served regions across North America raise Seed and Series A Capital. The conference will be hosted by the Arizona Commerce Authority and Stout Street Capital from October 12th through October 25th.
- IO2020 is a virtual summit hosting over 1,000 industry experts, enterprise leaders, & high-growth startups. It’s the first of its kind virtual conference providing insights and inspiration around the latest technologies, tools, & tactics for today’s innovators, starting from October 20th through October 22nd.
Are you looking for more news in tech between the coasts? It’s free to sign up for our hand-curated newsletter, The Spark, delivered to your inbox each week with the tech news outside Silicon Valley you need to know. Sign up here!