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S.A. firms attracting more from investors
January 22, 2015

By Patrick Danner, San Antonio Express-News

Venture capital investment last year in San Antonio reached almost $110 million, the most money raised by area companies since figures were first tracked 20 years ago.

The amount of venture capital investment placed San Antonio 37th among the 160 metro areas tracked in the MoneyTreeReport by Pricewaterhouse-Coopers LLP and the National Venture Capital Association, based on data from Thomson Reuters. San Antonio finished right behind Nashville and just ahead of Detroit.

The $109.6 million in venture capital funding raised collectively by eight San Antonio companies accounted for about 7 percent of the more than $1.5 billion invested in Texas last year. That was an improvement over 2013, when six San Antonio companies received a combined $34.2 million - or 2.5 percent of the more than $1.3 billion invested in the state.

Three companies received all but about $13 million of the total amount invested by venture capitalists last year in San Antonio, according to the MoneyTree Report.

The companies and amounts:
• WellAware Holdings Inc., an early stage company that's developed software that lets customers remotely track oil wells, pipelines and other equipment, $37 million.
• Seno Medical Instruments Inc., which is working on commercializing technology that combines lasers and ultrasound to diagnose breast cancer, about $35 million.
• AirStrip Technologies Inc., a developer of mobile patient-monitoring software, $25 million.
Both Seno Medical and Air-Strip have been operating for at least nine years; capital raises for later-stage companies tend to be larger.

Five other San Antonio companies received funding. They were: BiO2 Medical Inc., $5.9 million; Bluegrass Vascular Technologies Inc., $4.8 million (two rounds); Promoter.io, $1 million; Phoenix Biotechnology Inc., $852,000; and Infocyte Inc., $300,000.

WellAware's funding was led by private-equity firm Activant Capital Group LLC and Mexican billionaire Carlos Slim, CEO of América Móvil, one of the largest mobile phone carriers in Latin America.

WellAware has used the money to build out its software, wireless networks and workforce, said Matt Harrison, co-founder and CEO.

While the amount of money raised in San Antonio is low in comparison with Austin, Houston and Dallas, Harrison said the Alamo City's profile is increasing among venture capitalists.

"A lot of that is the result of some great successes with companies like Rackspace (Hosting Inc.) and others that create the talent pools that we need to draw from to build these companies," Harrison said. "The talent pool, I think, is ever increasing in San Antonio, which is really going to help entrepreneurs come in and be comfortable setting up shop."

Seno Medical founder and CEO Janet Campbell said San Antonio is becoming a more sophisticated market.

"There is more familiarity in venture capital investing or early stage investing than I saw when I first moved here" in 2001, Campbell said. "That's a good sign."

Seno Medical's lead investor is MedCare Investment Funds, a private investment company based in Nashville, Tennessee, that focuses on innovative services and technologies in the health care field.

Seno Medical is using the proceeds it received to conduct a clinical study of its Imagio optoacoustic imaging system and to launch a marketing study in Europe to familiarize doctors with the technology, Campbell said. The company has regulatory approval to sell in Europe.

Promoter.io received nearly $1 million from investors that included San Antonio's Geekdom LC, a collaborative workspace for technology startups. Promoter.io, which measures consumer loyalty and determines for e-commerce companies what drives that loyalty, operates out of Geekdom in downtown San Antonio.

Houston-based solar-power firm Sunnova Energy Corp. received $250 million in venture capital funding last year, the most of any Texas company last year. However, companies in the Austin area received a combined $620.6 million in venture funding, more than any other area of the state. It's the fourth time in five years Austin has led the state. Overall, Austin ranked 12th among the nation's metro areas.

Nationally, the 160 metro areas tracked in the MoneyTree Report received a combined $48.3 billion in venture capital investment last year. San Francisco topped all areas with $15.7 billion in investment.

Express-News archives contributed to this report.

 

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