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Austin Deal Highlights - Jan 3, 2021

My people, what a year, to say Austin raised over $2.2B in venture funding, all while wearing the same pair of sweatpants since March?? Just wait until these New Year’s resolutions start kicking in ;). No denying, Austin is an economy to be reckoned with, eclipsing the $2B venture mark in back to back years and 2nd time on record, thanks in part to a substantial $724M Q4. And of course, I’m just one of the masses telling you that amazing things are happening here, but just to be clear, this revolution is happening across the entire state of Texas…so take this opportunity to subscribe to my Houston and Dallas-Fort Worth newsletters - what a treat!

What’s exciting is while we still see a healthy amount of new business formation and early stage funding, Austin companies are increasingly seeing more demand for later stage rounds. It’s just further evidence that Austin has the infrastructure to not only start and grow a business, but additionally the necessary resources such as critical mass of talent and variety of funding sources to build long term, sustainable organizations. Tying the record set in 2019, we had 22 companies raise $25M+ rounds in 2020. Fortunately here at LiveOak Venture Partners, we are able to continuously play a part, with several of these amazing companies in our portfolio including DISCO, OJO Labs, and Homeward. Here is a list of the largest rounds of 2020 (including a few deals I would not characterize as venture rounds, thus not in above numbers).

To layer onto the cake that Austin can produce long term, sustainable businesses, let’s throw additional data points at you. What a year for public offerings (11) at significant valuations, across a variety of industries from business software, consumer products, biotech, to electric vehicles. Public debuts this year include BigCommerce ($4.4B market cap), Vital Farms ($1B market cap), Shattuck Labs ($2.2B market cap), Hyliion ($2.5B market cap), and already those teed up for next year including Bumble (seeking $6-8B valuation) and E2open (reverse merger at $2.6B valuation).

Furthermore, as part of this great migration of talent to Texas, major companies are increasing their presence here, with blockbuster announcements including Tesla’s $1B gigafactory, Apple’s new campus, Oracle’s HQ relocation, and Facebook’s major expansion. These moves mean not only more employment opportunities and attraction of talent from across the globe, but more business opportunities for our homegrown companies as well. Just take a look at Vroom’s (Nasdaq: VRM) expansion into Austin through the recent acquisition of Vast, Cloudera’s (NYSE: CLDR) acquisition of Eventador (LiveOak portfolio), and numerous other strategic M&A and partnerships. Moreover, it’s not just the strategics that frequently have their eye on Austin, it’s the financial buyers as well. Recent notable deals include Epicor (acquired by CD&R for $4.7B), Planview (picked up by TPG for $1.6B), Mood Media (by Vector Capital), Storable ($2B by EQT), and Forcepoint ($1.1B by Francisco Partners). These exits typically mean that talent cycles back into the economy, joining the amazing growing companies we have, and creating the next cohort of influential startups.

So what’s next? The pieces are in play for quite a year, quite a decade, and I’m here for the ride. As a reminder, we are are actively investing in early stage tech businesses in Texas, so drop me a note if you know of anything that may think may be of interest. As always, thanks for the time!

Mason Rathe, an early stage investor with LiveOak Venture Partners Additional research and newsletter support provided by Dipesh Mehta

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