Venture Capital

Cribspot raises $660K seed round, plans to add 3 positions

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September 24, 2014

Cribspot has made a name for itself as a startup that helps connect college students to off-campus rental housing. Now the Ann Arbor-based company is aiming to become a national name in student housing. The 1-year-old startup has raised $660,000 in seed capital from Bizdom (Cribspot also has a location in downtown Detroit) and the First Step Fund. Local venture capital firm Huron River Ventures led the round. "We're going to see some real exciting growth from them in the next few years," says Tim Streit, partner with Huron River Ventures. Cribspot got its start as A2cribs when Tim Jones, Evan Dancer, Jason Okrasinski and Alex Gross (all University of Michigan students) created one central website for off-campus housing. Finding off-campus housing is usually an archaic mess made up of ads on Craigslist, newspapers, and on the sides of the buildings. Cribspot looks to solve that by giving landlords and students a central location to advertise and find off-campus housing. Cribspot is currently on 15 campuses across the U.S., adding 10 more to its list this fall with Michigan State University, University of Iowa, and the University of Texas. More universities are set to come online soon. "We're trying to grow as fast as we can," says Okrasinski, co-founder & CEO of Cribspot. "We plan to open in Detroit at Wayne State University in the next few months." Which will mean more campus reps. Cribspot currently employs a staff of six people and is looking to hire three more. Even more hires in the form of campus reps are set to happen soon thanks to the seed round. "We're using that money for the marketing and user growth," Okrasinski says. "We're also using it for new hires." Source: Tim Streit, partner with Huron River Ventures; and Jason Okrasinski, co-founder & CEO of Cribspot Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

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Duo Security raises $12M Series B from Silicon Valley VC

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Economic Development

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September 24, 2014

Duo Security announced this week that it has raised a $12 million Series B round with a big-name Silicon Valley-based venture capital firm (Benchmark Capital) leading the way. What’s interesting is that Dug Song, the startup's CEO & co-founder, never had any intention of raising the 8-figures worth of new funding. "Benchmark approached us," Song says. More specifically Matt Cohler approached Song. He approached Song multiple times. Song didn't respond. He didn't even pick up the phone when Cohler called because Duo Security wasn’t raising seed capital. Song finally did pickup the phone when several of his friends told him he was crazy for ignoring one of the most successful entrepreneurs in tech today. Benchmark Capital has been in the middle of a number of high-profile deals in the Bay Area since its launch in the mid 1990s, including investments in Zillow, Zipcar, Yelp, and Twitter. It's probably most famous for investing early in eBay. "They are probably one of the top three venture capital investors in the world," Song says. Cohler made a name for himself by getting in on the ground floor at number of high-profile startups over the last decade. He was a founding member of Linkedin. Then he went on to become an early hire at Facebook. Kohler joined Benchmark Capital as a general partner in 2008 and led investments in Dropbox and Instagram. He is now the point person for Benchmark Capital's investment in Duo Security. Duo Security makes online security software, specifically a two-step verification process that confirms the right person is accessing protected information. Duo Push seamlessly integrates with the user's online password system, so when a user logs in on a computer Duo Push sends a push alert to that user's smartphone asking whether to approve or deny the login request. Check out a short video of it here. Song (a big proponent of A2 New Tech Meetup and the Ann Arbor Skatepark) and Jon Oberheide launched the startup in 2009 at Tech Brewery. They raised a seven-figure seed round off the bat, attracting local venture capital firms (Reasonant Ventures) and coastal VCs (True Ventures). They have since grown the company to several dozen employees. Song declined to say how many but did say Duo Security is looking to hire 10 people right now. "There are more (open positions) being added," Song says. Which is why Duo Security is moving. It's nearly tripling its office space to 14,000 square feet at 123 N Ashley in downtown Ann Arbor. "We're about to move," Song says. "Our anticipated move date is in November. It's a big build out." Which might help explain why Song is too busy to take extra investor calls, and why they’re calling in the first place. Source: Dug Song, co-founder & CEO of Duo Security Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Covaron Advanced Materials raises seven-figure Series A

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Economic Development

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September 17, 2014

Big changes have taken place at Covaron Advanced Materials over the last year. The Ann Arbor-based startup has brought in a new CEO, raised a seven-figure Series A, and consolidated its investor circle to one person. Covaron Advanced Materials, formerly Kymeira Advanced Materials, is developing a new chemistry for ceramics. The new technology was developed by company founder Vince Alessi and co-founders Cam Smith and Reed Shick. The advanced ceramics formula makes ceramics a more affordable and streamlined option for a number of molds and durable goods, such as those used in the automotive sector. "We are a game-changing technology for a lot of industries," says Michael Kraft, CEO of Covaron Advanced Materials. Which explains why it won the student portion of the Accelerate Michigan Innovation Competition in 2012. And then the main competition at Accelerate Michigan in 2013. It also raised a $300,000 seed round from a number of local venture capital organizations, like Ann Arbor-based Huron River Ventures and Invest Detroit's First Step Fund. "We had a lot of help from the Ann Arbor SPARK Business Accelerator Fund," Kraft says. Those investors are gone now. Kraft says a single investor he declined to name but described as a person who owns "a Michigan-based consortium of companies" bought out everyone else and provided the money for a Series A. Kraft declined to name the individual or the exact amount of the Series A besides saying it was in the "seven figures" and provide enough funding to grow the company for 24 months. Kraft, a Michigan State University graduate, was recruited from California to serve as Covaron Advanced Materials' new CEO. He explains the plan is to focus on growing the company through targeted application development of its ceramics technology. The idea is to aim for a long-term growth cycle (similar to what life sciences startups go through) so it can maximize the use of its technology in several markets. Covaron Advanced Materials and its team of 10 people (all recently moved from independent contractors to full-time employees) plans to leverage the sole investor’s portfolio of firms to grow. "We're in a consortium of companies that employs more than 1,000 people and has more than $150 million in capacity," Kraft says. "That gives you an idea of the support we have." Kraft acknowledges this is a unique situation for a startup. There are no exit requirements or need to pump up artificial value or need to exit because a subset of the startup's investors needs to cash out. There is only the goal of growing a big business that could one day have its fingers in a lot of pies. "We have choices," Kraft says. "We don't need to paint ourselves into a corner." Source: Michael Kraft, CEO of Covaron Advanced Materials Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Amplifinity keeps hiring, closes Series B, looks for bigger home

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Economic Development

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August 6, 2014

Amplifinity is gunning for the growth trifecta in downtown Ann Arbor this year. The tech startup has been steadily hiring over the last year, is close to locking down a multi-million-dollar round of venture capital investment, and is starting to look at options for a bigger headquarters. "The size of our organization could easily double in the next year," says Eric Jacobson, president & CFO of Amplifinity. The 6-year-old company's bread and butter is software that generates Internet referrals through social media called Advocacy Management Platform. The product allows people to advocate for brands by referring new prospects, endorsing products, and amplifying marketing messages. Amplifinity has hired 12 people over the last year, including a former intern. The firm now has a staff of 37 employees and is looking to hire half a dozen more people, including software developers and client services professionals. "We're looking for people who are really good at working with other people," Jacobson says. Amplifinity is in the final stages of securing a Series B round of investment. Jacobson declined to say how much the round would amount to besides saying its worth several million dollars. Amplifinity raised a $3.5 million Series A in 2012. "We have the capital to grow," Jacobson says. "We are acquiring new customers very rapidly." The recent growth is also pushing Amplifinity toward the capacity of its office space in Ann Arbor. The firm is starting to explore options for newer and bigger offices in a broad range of locations, but Jacobson says the firm’s leadership has a preference on where it wants to end up. "We really love Ann Arbor because it’s a wonderful, creative town," Jacobson says. "It has really smart people. It allows us to grow a company here as well as our competitors, which are primarily in Silicon Valley." Source: Eric Jacobson, president & CFO of Amplifinity Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Plymouth Ventures closes on 3rd investment fund worth $61M

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July 23, 2014

Plymouth Ventures doesn't typically add partners to its team, and it's not for lack of qualified candidates. That changed this year for the Ann Arbor-based venture capital firm as it added a new partner and chief financial officer to go with its new $61 million investment vehicle. "We get about 10 resumes a year from people who grew up in Michigan, went to Washington, D.C, or San Francisco, got married, had children, and want to come home," says Jeff Barry, partner with Plymouth Ventures. "We get 10 really good resumes each year. We usually send them along (to other investment firms) to get placed. This time we happened to be looking for someone." Two new someones to be exact. Plymouth Ventures brought on Chris Frick as its CFO and Evan Ufer (grandson of University of Michigan broadcasting legend Bob Ufer) as a partner. Both are Michigan returnees from the coasts. Ufer, who is in his mid 30s with a young family, worked in private equity in New York City before coming back to Ann Arbor. Barry points out that Ufer and Frick's resumes stood out so much that the firm knew it had to hire both to help maintain the company's growth. "We knew we were going to need some added horse power to deploy more capital," Barry says. Plymouth Ventures closed on its third investment vehicle worth $61 million earlier this month. That’s up from its second fund from a few years ago that totaled $41 million. Plymouth Ventures invests in scalable tech companies in the Midwest and has $100 million under management today. The firm's average investment ranges between $2 million and $6 million. The 11-year-old firm invested two thirds of its last investment fund in Michigan-based startups. Plymouth Ventures expects to invest about half of its new fund in Michigan-based companies. It has already made its first investment for the new fund earlier this year (Ohio-based Certified Security Solutions) and is on target to make a couple more before the end of the year. "We're looking at a handful of great companies in the Great Lakes region," Barry says. "We expect to do 2 more (investments) before the end of the year." Source: Jeff Barry, partner with Plymouth Ventures Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Augment Ventures makes 2 investments in lighting startups

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Economic Development

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July 16, 2014

Augment Ventures is off to a fast start for 2014, making two investments in clean-tech startups and laying the groundwork to make a couple more before the end of the year. "Our portfolio is up to five startups right now," says Sonali Vijayavargiya, founder & managing director of Augment Ventures. Vijayavargiya launched the venture capital firm out of Ann Arbor nearly three years ago. Augment Ventures specializes in making early investments in startups in the clean-tech/sustainability sector. Its most notable investment so far is in downtown Ann Arbor-based logistics tech firm LLamasoft in 2012. Augment Ventures has made two investments so far this year. Both firms, Revolights and Lumenetix, are based in California. Lumenetix designs, manufactures and sells UL recognized color tunable LED light engines for fixture manufacturers. It is currently working with one of the Big 3 (Vijayavargiya declined to say which one) to integrate its products in the automotive sector. Revolights is working to bring new lighting solutions to bicyclists. "They're trying to bring 360-degree visibility to commuter bikers," Vijayavargiya says. She adds, "we are very excited about both (startups)." Augment Ventures has also added a couple of people to its team this year, expanding it to five people. That staff is working to nail down a couple more investments before the end of this year. "We are actively doing due diligence with five opportunities," Vijayavargiya says. "Two of those firms are Michigan-based." Source: Sonali Vijayavargiya, founder & managing director of Augment Ventures Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ornicept shifts into sales mode, plans to close on Series A

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July 9, 2014

Ornicept has a new brand for its product, a few new customers, and is making way to raise even more money later this year. The downtown Ann Arbor-based startup has rebranded its field data collection software (formerly called GeoTraverse) to Specteo. It has gone beyond its Beta launch and started lining up customers as it fleshes out its mobile platform. "We have been hitting sales mode pretty quickly and heavily," says Justin Otani, co-founder of Ornicept. "We also have been adding features and improving functionality." Otani co-founded Ornicept with Russell Conard two years ago, originally developing bird monitoring technology for airports and wind farms. Last year it pivoted to creating a mobile software platform that helps researchers and inspectors collect data in the field. It started on Andriod tablets and is expanding beyond that. "We have an iOS version coming out later this year," Conard says. Ornicept raised a $600,000 angel round last year that helped get its product to market. It is aiming to raise a Series A round of investment later this year. The company has hired four people over the last year (two marketing professionals and another two sales professionals), expanding its staff to 14 people. Source: Justin Otani and Russell Conard, co-founders of Ornicept Writer: Jon Zemke

Ann Arbor-based AdAdapted raises $725,000 in seed round

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July 9, 2014

AdAdapted has locked down $725,000 in seed capital to help it scale up its mobile advertising platform. Among the investors were the University of Michigan’s Zell Lurie Commercialization Fund, Belle Michigan, and Start Garden. The Ann Arbor-based startup plans to initially use part of the money to accelerate its hiring. The 2-year-old company currently employs six people after hiring three over the last year. It's currently looking to hire a software developer and sales professional. After that much of the money will be used to help get the word out about AdAdapted. "We'll mostly be using it on sales and marketing after that," says Molly McFarland, co-founder & chief marketing officer of AdAdapted. The startup's advertising platform connects advertisers with developers to create customized native ads in mobile apps. It strives to provide a simple interface so advertisers can find their best audience. The idea is to do away with intrusive banner ads by replacing them with slicker native ads. "We have clients right now," McFarland says. "The technology is up and running." AdAdapted's technology is being used by some advertisers. The startup's staff is currently working to flesh out the platform and expand its client base. Source: Molly McFarland, co-founder & chief marketing officer of AdAdapted Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor Avegant lands $4M in investment for 3D goggles

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Arts & Culture

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June 18, 2014

Three... no, four words: Hi-Def 3D goggles. Guess what's going to be the next hot tech development? At least, Intel thinks so, investing $2 million in Ann Arbor startup Avegant. Excerpt: "“It’s too late,” said another venture capitalist, this one in from Cleveland. “They closed their round at $4 million. I was trying to get in and couldn’t. Intel took $2 million of it and the existing investors took the rest. They took it off the table. I still can’t believe I got shut out.” Having would-be VC investors salivating at the idea of writing you a check, and being able to say no, is a nice, and rare, spot for an early-stage company to be in. How Ann Arbor-based Avegant Corp. got to that spot is an interesting tale of being in the right place at the right time with the right technology." Read the rest here.

Mobile startup Larky closes on $1.76M Series A round

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June 4, 2014

Larky, a discount mobile app startup, has secured $1.76 million in a Series A round of seed capital. A mix of venture capitalists and angel investors have invested in the downtown Ann Arbor-based startup. Leading the round was North Coast Technology Investors. Also participating were the Michigan Angel Fund, the BlueWater Angels, and the Pure Michigan Venture Match. Larky raised an additional $650,000 in a seed round last year. Larky's mobile app helps user maximize the discounts and savings available to them. So it a member of an alumni association can get 10 percent off on their car insurance by using a certain carrier, Larky’s app will them. The 2-year-old startup has already roped in a number of large clients, including the Detroit Regional Chamber and Blue Cross Blue Shield of Michigan. "The value for end users is still there," says Gregg Hammerman, co-founder of Larky. "The average Larky's still have nine discounts stored into one space." Larky plans to use its new round of seed capital to continue to develop it’s technology and advance its marketing. It is also growing its team. The company employs eight people after hiring five staff in software development and sales over the last year. It is also looking to hire another two people. "We need to get out to more of our customers and continue to evolve our product," Hammerman says. Source: Gregg Hammerman, co-founder of Larky Writer: Jon Zemke