Want to know about Miami startups? A user's guide to this blog

Dear reader, Starting Gate has been providing and archiving South Florida startup and tech community news, views and resources since 2012. New to the Miami area? Thinking about relocating here? Just want to keep up with news, events and opportunities? We're there for you.

How to use Starting Gate: Besides scrolling the blog for the latest entries, you can access news and views by category. The "Funding" category will capture venture capital and angel funding news of individual startups as well as stories about funders. The startup categories chronicle news and my regular "Spotlights," and in Q&As you'll find interviews with CEOs and leaders in the entrepreneurship ecosystem. There are also categories for guest posts, views, accelerators/incubators, resources, events and more.

Have news? Have an idea for a guest post? Send it to me at ndahlbergbiz@gmail.com. (See my Facebook announcement here)

Thank you for your support through the years and please come back often. Follow me on Twitter @ndahlberg. - Sincerely, Nancy Dahlberg

March 28, 2018

Miami serial entrepreneur Albert Santalo announces his next big tech venture: 8base

Santalo

"8base has an enormous democratizing effect by affording businesses of all shapes and sizes the ability to digitally transform without enormous budgets or timeframes” - Albert Santalo

 

It’s not every day when a successful South Florida serial entrepreneur officially announces his or her next venture. This is one of those days.

Albert Santalo, founder of CareCloud and Avisena, is bringing 8base out of stealth mode. 8base is a platform and ecosystem for software development. The venture, incorporated in March 2017, has so far been funded by Santalo and angel investors in South Florida and Boston.

According to Santalo, 8base will allow citizen developers, or people with limited technical proficiency, to build and host their own enterprise software without having to contract software developers. It also allows engineers around the world to contribute new capabilities to the platform and earn one-time or recurring compensation in the process, he said. The product can be used to build blockchain as well as traditional software applications, something its competitors don't offer, Santalo said.

Market research firm IDC estimates that $2 trillion will be spent worldwide over the next five years on digital transformation initiatives. "8base has an enormous democratizing effect by affording businesses of all shapes and sizes the ability to digitally transform without enormous budgets or timeframes,” Santalo said in an email on Wednesday.

One of the pillars of a healthy startup ecosystem is exiting entrepreneurs launching and investing in new ventures, and Santalo has been doing that. He was most recently CEO of Miami healthcare-tech company CareCloud, raising more than $55 million in venture funding and building it in six years to hundreds of employees and customers before the founder stepped down nearly three years ago. Before that, he founded and led another health-tech software company, Avisena.

Before making a mark in health-tech, Santalo, with an MBA from FIU, worked in fintech and in management consulting in numerous industries and functional areas of business.

“8base is the culmination of 30-plus years spent building large, expensive systems over and over again. 8base makes the process easy and inexpensive. We believe that a pure technology company like this can make an enormous impact on South Florida,” said Santalo, an avid cyclist.

8base is already a team of 16, including some former CareCloud employees and Jax, the crypto guard dog. Stay tuned for more news about this new company, Santalo said. We will. 

Follow @ndahlberg on Twitter.

March 21, 2018

Can South Florida lead the future of work?

David
Employees need — and companies should be providing — avenues to gain new skills in things like artificial intelligence, blockchain, design thinking and analytics. Skills can't be siloed, and we have to think about more than technology. The ideas that are shaping the next wave of businesses are born out of curiosity.

- David Clarke, PwC  

Johanna
Since technology skill sets are in such high demand everywhere, it’s not sustainable to expect that we can poach from other markets. We need to invest and commit to training, developing and hiring talent locally.

- Johanna Mikkola, Wyncode Academy

Laura

I believe we won’t work from an office anymore. We won’t work for just one company. We will work per project, we will be more entrepreneurial, we will feel we will own our careers and our dreams again. I think the future will be fascinating.

- Laura Gonzalez-Estefani, TheVentureCity

 

By Romina Ruiz-Goiriena

Miami is booming with startup activity. Over the past decade, South Florida tech companies are booking tens of millions in revenue and employing hundreds of employees. It’s happening across other industries too. But, cultivating a robust entrepreneurial ecosystem is a process--one that can’t be done without digital transformation.

In business, digital transformation has become the buzzword of the hour. So much so that companies are now not only tasked with advancing their technological innovations, but also the personnel to support those innovations. So how can companies develop the digitally savvy workforce needed to make Miami a hub for the future of business?

This month, business festival NewCo Miami (March 25-26), showcases the companies that are shaping the future of business, and among them a few addressing the digital workforce transformation head on. We asked NewCo Miami presenters David Clarke, Global Chief Experience Officer of PwC, Johanna Mikkola, Co-Founder of Wyncode Academy, and Laura Gonzalez-Estefani, CEO of TheVentureCity, about the realities of digital transformation and how South Florida companies must prepare.

Let’s start with the biggest misconception of all: Many organizations define digital transformation as synonymous with IT. What does digital transformation mean?

David Clarke, Global Chief Experience Officer, PwC [DC]: Digital transformation is NOT migrating your enterprise systems or managing systems integration — that’s an IT function.

Digital transformation is making your organization fit for the digital age. An age of disruption, innovation, and heightened competition. Successful digital transformations change businesses inside and out while harnessing the power of technology to create new experiences. Digital transformations reimagine business models and products with a digital-first mindset while also improving experiences for the people in the business, including employees, suppliers and partners. To succeed, we must change the way we work, that includes the technology we use, and the behaviors we engage in.

Johanna Mikkola, Co-Founder Wyncode Academy [JM]: Digital transformation is usually synonymous with technology because every industry is a technology industry. There is literally no company that can build, design, and market products without the use of technology.  

Laura Gonzalez-Estefani, CEO, TheVentureCity [LGE]: What is digital transformation for me? It’s a mindset, a leadership type of thinking. It’s being able to take decisions based on data and not based in intuition and being able to operate fully through technology. To do that, you have to prepare your business to give you its "vital signs" in real time in a way that allows you to predict challenges and opportunities. Deep diving into all things business — team, processes, financials, expansion plans, legal, customer support — and being able to apply the required tech so that your business runs faster, smarter and more efficiently. It’s not just about transforming the way your IT (tech infrastructure), marketing or customer relationship processes are built. It’s about a new way of thinking and executing as leaders with technology at your core.

How does digital transformation and readiness directly correlate to the future of the workforce?

[DC] People are integral in shaping, deploying and powering digital transformations. We can invest in emerging technology, but without skilled workers to guide it, it will have little to no success. I believe that the power is in the people — not the technology. And right now, to successfully complete digital transformations that grow business, we need to dramatically change how we’re approaching development for our workforce. Employees need — and companies should be providing — avenues to gain new skills in things like artificial intelligence, blockchain, design thinking and analytics. Skills can't be siloed, and we have to think about more than technology. The ideas that are shaping the next wave of businesses are born out of curiosity. The problems and improvements that we can make for our customers and talent have to come from everywhere, not just a special incubator within the business. With those needs in mind, PwC's Digital Workforce Transformation helps businesses achieve successful digital transformation, starting with the workforce. Our workforce upskilling solution is powered through a mobile application called the Digital Fitness App, which provides personalized corporate training that’s currently being used by thousands of PwC employees, and we're developing customized versions for other companies too.

[JM]: Workforce preparation comes down to quality training and education. Ensuring high quality and access to this type of training is what will help build a solid ecosystem in South Florida. Since technology skill sets are in such high demand everywhere, it’s not sustainable to expect that we can poach from other markets. We need to invest and commit to training, developing and hiring talent locally. We have seen first hand through 500+ developer graduates working at over 230 companies that this is not only possible but already happening.

[LGE]: The sooner you learn and embrace the opportunity it brings to your business, the sooner your business is going to run smarter. There are so many different things your business is doing already relying on tech. Rather than adapting one piece at a time, think it through once, roadmap and start to execute. Artificial intelligence will make certain jobs disappear and others be created. Education needs to change so that new generations get ready for what’s coming. It’s impossible to compete with AI when we still study like we did 50 years ago. There is a huge gap there that we need to solve or the workforce won’t be ready. I believe we won’t work from an office anymore. We won’t work for just one company. We will work per project, we will be more entrepreneurial, we will feel we will own our careers and our dreams again. I think the future will be fascinating.

How does a company continue to work toward integrating what we now consider foundational technology (i.e. cloud, analytics, mobile, UX) while also keeping up with new technologies (i.e. IoT, AI, robotics)?

[DC]: Companies should invest in technologies that align with their overarching business strategy and goals  not just adopt the latest technology for the sake of being ‘cutting edge.’ Businesses need to be laser focused on customer needs and only implement technologies that smooth processes. Human experience is the strategy, and technology enables it. I’ve never seen a company solve its problem through a technology strategy.

[JM]: Companies need to invest in technologies that improve the customer experience. Foundational technology is now expected, and companies need to be at the forefront of that field. Those who are can focus on testing new technologies and how they apply best to their industry.

[LGE]: You need to execute the upcoming opportunities in a smart way, thinking long-term and ambitiously. Transforming a business in terms of tech means exponential growth if done well. You need to transform and educate your talent first, insert that mindset and operate towards it.

What are the biggest challenges the entrepreneurial ecosystem faces when it comes to tackling digital transformation?

[DC]: I think the toughest challenge is preserving some of the "start up" mentality after a company has matured. Growing while being able to stay nimble, continuously improve and build new things is the biggest challenge, and entrepreneurs, like CEOs of legacy companies are under tremendous pressure to stay competitive. This factor, and the challenge of preserving talent and keeping them motivated are the two biggest challenges I see.

Every year we take the pulse on the Digital IQ of business and IT executives around the world. In our 2017 Digital IQ Survey, we found that just 52% of companies rate their Digital IQ as strong. The most common obstacles companies face when tackling digital transformation include lack of properly skilled teams, outdated technologies, lack of integration of new and existing data and tech, and inflexible or slow processes.  Often, executives don’t even have the skills needed to guide an organization’s digital strategy. People have to be at the center of transformation projects, which often up-end years of processes, habits and cultural baggage.

[JM]: The biggest challenge is getting over the thinking that technology is only for developers. Understanding the language of technology (coding) is already as important as executing on things like marketing, finances and hiring. In the same manner in which we all learned to read and write but didn’t necessarily go on to be published authors, having a baseline understanding of coding will empower you to be a better entrepreneur.

[LGE]: I don’t think it’s that different from other places around the world. Maybe, this city is even in a better position because we are used to facing challenges constantly. It’s in our DNA. We are always ready to fight whatever comes our way. So, this is more of a call to action to start thinking about the opportunity we have to become the fastest digitized state of the U.S.

What are the biggest opportunities for businesses?

[DC]:  The biggest opportunity for businesses is creating a great culture, one that’s centered on experience for both customers and employees and powering growth. Among all this new technology, the focus needs be on real people — and a lot of times this is a huge missed opportunities. Businesses that create a strong culture, maintain a good employee experience, and move quickly are the ones that are set up for success.

[JM]: Diversity. Unlike established technology ecosystems that have a deeply rooted diversity problem, Miami has an opportunity to show that a diverse ecosystem is not only possible but will produce the best talent and the best products. For example, given that women make up 47% of the workforce and account for 85% of household buying decisions it makes sense that a product’s creators and builders be more reflective of their end user, meaning attracting more women makes business sense. In turn, it leads to stronger products and services and thus better businesses.

[LGE]: Let’s keep our talent home. Let’s create meaningful jobs here for the brains of the future that normally leave. Let’s be more open and inclusive to the crazy ideas the younger generations have and they want to test; from drone-based shipping to self-driven car circuits. Let’s have South Florida running on clean energy and transform the educational system completely, teaching kids coding and entrepreneurship from the very beginning of their school years.

Register for NewCo Miami here.


Romina Ruiz-Goiriena is a seasoned journalist and digital media entrepreneur who has worked in Paris, Cuba, and Israel for France24, El Mundo, and Haaretz. Most recently, she co-founded Prowell Media in 2016, a digital media news company that produces content for 14 million people across Mexico and the U.S. Previously to returning to Miami in 2015, she worked for CNN out of Guatemala and The Associated Press, where she reported on key regional issues such as migration and drug trafficking. She consults for media projects including Newco Miami, by M + D.  You can follow her on Twitter @RominaAdi.

500 Startups decides to 'double down' on Miami, opens office for Florida, Latin America

Miami skyline

By Nancy Dahlberg / ndahlbergbiz@gmail.com

In a surprise to almost no one in Miami’s startup scene, 500 Startups is putting down deeper roots in the Magic City.

If you’ve been reading Starting Gate, you know that 500 Startups has been holding programs and events here, including a Series A accelerator and a PreMoney conference. The Silicon Valley company, which has invested in more than 2,000 startups in 60 countries, is an investor in a number of South Florida startups, including (at the risk of leaving some out) Home61, FIGS, Court Buddy, Alta5 and Senzari.

Now the venture fund and accelerator company is opening a large office in Miami, where it will host an expanded menu of programs and serve as its base for South Florida, Latin America and other markets in the eastern U.S., Managing Partner Bedy Yang told Bloomberg in its report Tuesday. 500 Startups has about $400 million under management in multiple funds, said Yang, who has been a speaker at several Miami area events.

 “Today, we believe the Miami entrepreneurial ecosystem is at an inflection point, with more high-potential founders launching locally than ever before. Further, we believe the city is uniquely poised to become a global hub for entrepreneurship and innovation that will hopefully connect South Florida with Silicon Valley, the East Coast, Latin America, Europe, Africa and beyond,” wrote Ana Paula Gonzalez, who has been on the ground for more than a year leading the efforts to establish a larger presence here, in a blog post announcing the news today.

CEO Christine Tsai said in a statement: “We believe Miami is a key market for us to double down on and continue to serve all three parts of that mission,” Tsai took over the reins of the company after Dave McClure resigned when his sexual misconduct toward women was brought to light.

Helping to fund the Miami endeavor is the Miami Downtown Development Authority, the John S. and James L. Knight Foundation and Visa.

500 Startup Miami’s offices will be in downtown Miami at Mindwarehouse, where it will have about 7,200 square feet. Programs will include founder bootcamps, accelerator programs, corporate innovation programs, demo days and more. Learn more about 500 Startups Miami here.

Welcome (officially) to Miami, 500 Startups.

Follow @ndahlberg on Twitter.

UPDATE: Read more in the Miami Herald's report here.

March 15, 2018

Co-founder Ryan Cohen stepping down as CEO of Chewy, a homegrown success story

ChewymiamiHerald

Ryan Cohen, CEO of Chewy.com, and his poodle Tylee at the company’s photo studio in Dania Beach in 2016. Photo by C.M. GUERRERO. cmguerrero@elnuevoherald.com


By Nancy Dahlberg / ndahlbergbiz@gmail.com

PetSmart announced today that Ryan Cohen, the co-founder and CEO of Chewy.com, is stepping down.

In six years, the 32-year-old Cohen grew Chewy to a homegrown success story, selling it to PetSmart for about $3.35 billion last year, the largest e-commerce acquisition in history.

Chewy, headquartered in Dania Beach, will be led by Sumit Singh, current chief operating officer of Chewy, who joined the company in August 2017 from his role as director of Amazon Fresh Worldwide, the company said.

It’s a familiar story in corporate acquisitions -- that is, the founding CEO steps down to pursue other passions or is replaced at the top -- and it gives Cohen the opportunity to start or fund something anew in South Florida, which is what ecosystems are all about.

Cohen has quite a story of his own. Growing Chewy.com from zero revenues to a multi-billion company was an incredible ride, Cohen said in a keynote appearance at the Florida Venture Capital Conference early this month (see a post here). The pet supplies retailer now has about 7,000 employees nationwide.

Cohen, who has always been entrepreneurial and has no college degree, said he started Chewy to replicate the same “amazing” customer experience of his neighborhood pet store (he is pet parent of a poodle, Tylee), but online. He used Zappos, the massive shoe e-tailer, as a model and inspiration. When he needed capital to grow, he approached more than 100 investors – and they all passed. “But I thought there’s a chance … we were on to something genius. I felt with scale we will prove them wrong,” Cohen told the audience of investors and entrepreneurs at the conference.

When the sale to PetSmart was announced, some longtime customers worried their beloved brand would change, and this news will not make them feel better. Still, the hyper-growth continued after the acquisition. In February, Chewy opened a 100,000-square-foot facility for its customer service team, which had outgrown its space in the Dania Beach headquarters. In total, Chewy employs 1,500 in South Florida, with 1,000 in Hollywood, out of its 7,000 worldwide. Chewy plans to hire 400 more customer service employees for Chewy Hollywood this year, Cohen said earlier this year.

For its part, PetSmart said in a news release announcing the CEO change that the company will continue to operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy.

“Ryan is an amazing leader who has built a unique and powerful ecommerce business with a strong culture that is laser-focused on serving the needs of customers and their pets. I have full confidence that this will continue under the leadership of Sumit, a seasoned ecommerce leader who is well equipped to carry Chewy’s strategy forward and grow the company,” said Raymond Svider, a managing partner at BC Partners and executive chairman of PetSmart.  “We have enjoyed a great relationship with Ryan and respect his desire to step back from running the company after the relentless pace of the last seven years; he has our unwavering support and we wish him well.”

Said Singh: “We will remain focused on Chewy’s founding vision, core values, operating principles and goals. Our business momentum remains strong as we continue to scale while improving our customers’ experience and lowering our costs. We will stay focused, keep moving forward and continue with our vision of making Chewy the best pet retailer on the planet.”

Singh has served as the chief operating officer of Chewy.com since November 2017. Prior to Chewy, Singh served as the Director of Amazon Fresh, and before that he worked for Dell. He received his M.B.A. from the University of Chicago, Booth School of Business and an M.S. in Operations and Logistics from the University of Texas at Austin.

In a statement Thursday, Cohen said: “The past 7 years have been a tremendous journey and the learning experience of a lifetime. In a short time span, Chewy has gone from a concept to disrupting and redefining an entire industry. I feel the time is right for me to pass on the torch so I can pursue personal goals and spend time with my family. I’m confident in Sumit and believe he will continue to carry on the vision of making Chewy the best and biggest pet retailer on the planet.”

What’s next for Cohen? He’s not saying yet, but no doubt it will be entrepreneurial. He also has the means to support other startups, should he want to go the investor route. But to be sure, entrepreneurship is in his DNA, he told the audience at his most recent appearance in South Florida.

“I have never been a clear cut career path kind of person. I started my first business when I was 14 or 15 building websites… My father was a business owner so I saw what it was. It was very clear early on that I would be my own boss,” he said at the appearance in January.

In the recent talk, he discussed the challenges along the way and shared war stories about Chewy, including the difficulty finding funding. He said he moved forward and never changed his business strategy, even after a hundred investor doors were shut on him.

“I spoke to over 100 investors and they all passed for one reason or another. At one point I got so desperate … we took a trip to Sand Hill Road [in Silicon Valley]. I literally went door to door -- that didn’t work. But one of those 100 investors that passed made a visit later and I remember it like yesterday.  I was 25 at the time, and looked like 15 years old. He followed up with us, was impressed with all of our numbers and ultimately he invested.”

Cohen, who describes himself as obsessive, relentless and contrarian, said the biggest challenge was managing the hyper-growth. He  talked about the transformative decision to bring fulfillment in house in 2014, rather than relying on a third party. “It was three or four months of pain. Everything that could have gone wrong went wrong. We worked through those problems and … in order for us to scale a billion dollar company we needed to go through that.”

Cohen also had some advice to aspiring entrepreneurs.

“You need to make sure you are in a place in the world that you are ready for this. Scaling a business is going to test you physically and emotionally, it’s not for everyone. I have an 11 month old now, and scaling a startup from inception to reality is like taking a human being from infancy to adulthood in a very short period of time. It’s going to get sick in the middle of night and you are going to be up all night taking care of it. It’s going to make mistakes and you will learn from it. It is a huge act of selflessness and dedication and if you are ready for it, it is going to be a crazy, crazy, crazy roller-coaster and it will be the journey of a lifetime.”

Follow @ndahlberg on Twitter.

March 14, 2018

Wyncode to offer $1.4 million in scholarships to promote female involvement in tech

Wyn1

For women who want to learn tech skills – coding, UX/UI design or digital marketing -- and perhaps qualify for a scholarship, too, here’s an opportunity for you. Here’s the lowdown, from Wyncode:

Today, Wyncode Academy announced a $1.4 million scholarship commitment to promote increased female involvement in technology. The scholarships will allow females to build technical foundations in the areas of computer coding, user experience and user interface (UX/UI) design, and digital marketing, ultimately building long-term meaningful careers in technology.  The scholarship aims to balance the school’s female enrollments as Wyncode strives to create an equal gender parity environment in their classrooms and throughout the South Florida tech scene.

“There’s a shortage of women in technological roles and it is not because women lack skill, but because they lack equal opportunity in a traditionally male-dominated industry,” said Johanna Mikkola, CEO and co-founder of Wyncode Academy. “As a community of educators, technologists and entrepreneurs, we see limitless potential in all our students and alumni, and want to develop a support system through education to help them achieve their goals.”

Wyncode strives to offer up to 930 scholarships over the next four years to qualified female candidates interested in enrolling in the academy’s Full Stack and Front End Web Development courses, UX/UI Design Immersive and Digital Marketing course. Wyncode’s in-person courses are comprised of rigorous professionally curated curriculums taught by senior instructors, many of whom worked in tech hubs such as Silicon Valley and New York City before joining the academy in Miami, Florida.

“Miami’s thriving tech ecosystem is in need of skilled technologists, especially since the city is a serious contender for Amazon’s second headquarters,” said Adriana Cisneros, CEO of Cisneros and member of Wyncode’s Endeavor Advisory Board. “Through Wyncode’s commitment, the talent pool in South Florida will increase by nearly a thousand women with highly desirable tech skills that both established corporations and startups across the country need.”

Prospective female students can start their application or learn more by visiting:

http://wyncode.co/women-in-tech-scholarship

March 12, 2018

This cute home can be 3-D printed for $4,000 -- and be a solution for the developing world

  Home

 

By Nancy Dahlberg / ndahlbergbiz@gmail.com

Building a home in a day for under $4,000? It can be done with 3-D printing technology and could be a sustainable solution for Haiti and the rest of the developing world.

New Story, the nonprofit startup that created hundreds of small concrete homes for Haitians after other nonprofits faltered, partnered with ICON, a construction technologies company, to unveil the first permitted, 3D-printed home created specifically for the developing world. The 350-square-foot home was unveiled Monday at South By Southwest in Austin, Texas.

In the past couple of years, New Story has funded and built hundreds of homes in Haiti and El Salvador. But even though its crowdfunding model is efficient and effective, the nonprofit can’t keep up with the demand building homes the traditional way. The 3D-printed home unveiled Monday serves as proof-of-concept for sustainable homebuilding that will allow for safer, more affordable homes for more families, faster than ever, said Brett Hagler, the CEO of Silicon Valley-based New Story.

 “We feel it’s our responsibility to challenge traditional methods and work toward ending homelessness,” said Hagler, who grew up in South Florida and co-founded the nonprofit with a friend, Mike Arrieta, who attended the same Broward high school, Coral Springs Christian Academy.

Other companies are working on 3-D homebuilding technology, but they are primarily targeting high-end consumers. “We thought, okay, what if the bottom billion weren’t the last ones to get this, but the first ones to get this? It made sense for us to try to leapfrog what’s happening domestically, because our homes are so simple,” Hagler told FastCompany, which broke the story.

The 3-D printer, called the Vulcan, is designed to work in places like Haiti and rural El Salvador where power, potable water and technical assistance can be sparse. It will be built to fit on a truck, so it can be easily transported from site to site. The printer will use a common mortar and the same concrete foundation the YCombinator-funded New Story has been using at its other houses, including in Leveque, Haiti, 40 minutes from Port-au-Prince.

“Conventional construction methods have many baked-in drawbacks and problems that we’ve taken for granted for so long that we forgot how to imagine any alternative,” said Jason Ballard, co-founder of ICON. “With 3D printing, you not only have a continuous thermal envelope, high thermal mass, and near zero-waste, but you also have speed, a much broader design palette, next-level resiliency, and the possibility of a quantum leap in affordability. This isn’t 10 percent better, it’s 10 times better.”

New Story’s goal: To print the first community of homes for poor families in El Salvador in the coming 18 months, and then through partnerships, scale up production in the developing world over the next few years.

New Story currently works in Mexico, Haiti, El Salvador and Bolivia and in three years has funded more than 1,400 homes for families in need. More than 850 of those $6,500 concrete homes have been built and families have moved in. The nonprofit says 100 percent of donations goes to build homes while organization overhead and R&D is covered by private donors.

And this little home, now sitting in an Austin backyard, could be the start of something big in social ventures. Hagler hopes New Story's upcoming project will serve as a catalyst for the industry.

 



 

March 07, 2018

Yes, more, more, more: Magic Leap raises $461 million, primarily from Saudi investors

By Nancy Dahlberg / ndahlbergbiz@gmail.com

Magic Leap, the Plantation-based mixed-reality startup, announced Wednesday that it has raised $461 million from the Kingdom of Saudi Arabia’s investment arm, The Public Investment Fund. Magic Leap has raised more than $2.3 billion in funding to date.

 The Saudi Arabian fund contributed $400 million of the raise, which was forecast by Bloomberg.

The additional Series D funding is in addition to a previously reported $502 million funding round led by Singapore’s Temasek in October. The  Series D funding now stands at $963 million, the company says.

 “The Magic Leap team and I are happy to welcome The Public Investment Fund and the other new investors to the Magic Leap family. We look forward to having them join us on our journey to build an amazing future,” CEO Rony Abovitz said in a statement.

Magic Leap’s “mixed reality” glasses feature its digital lightfield technology. In December, it unveiled some more details of its first product in development, Magic Leap One, which will be available first to selected developers and designers. '

Magic Leap, founded in 2011 by Abovitz, is based in the former Motorola plant space in Plantation. Greater Fort Lauderdale Alliance president and CEO Bob Swindell told the Sun Sentinel that the company already is outgrowing the space and the economic development agency is working with Magic Leap on options.

READ MORE IN THE SUN SENTINEL HERE.

 

March 05, 2018

Magic Leap sues employee who allegedly tried to extort ‘millions’

Magic Leap sued its senior director of global security, asserting he attempted to “extort millions of dollars” by threatening to make legal claims against the Plantation company, the Sun Sentinel reported.

In a lawsuit filed by Magic Leap on Feb 28 in U.S. District Court in the Eastern District of Texas, the company alleges that Todd Keil has demanded the payment of millions from Magic Leap in exchange for not publicly filing “whistleblower claims” that include alleged illegal conduct concerning competitor Microsoft’s HoloLens virtual reality headset, the Sun Sentinel report said.

Keil is a Texas resident who was hired in 2015 after leaving his assistant secretary position at the Department of Homeland Security in 2012. He oversees workforce and intellectual property-related security as well as strategic business risk mitigation, according to the lawsuit.  According to the South Florida Business Journal, Keil has said he was forced to resign from his Homeland Security post after criticizing management of a program to protect U.S. chemical plants from terrorist attacks.

At Magic Leap, Keil alleges wrongdoing centered on the company's receipt of advance copies of HoloLens. Magic Leap said they were obtained legally but returned as soon as they were discovered, all but one unopened.

Read the full story in the Sun Sentinel or the South Florida Business Journal.

READ MORE: More, more, more? $400 million investment may be in works for Magic Leap  

February 24, 2018

More, more, more? $400 million investment may be in works for Magic Leap

  Magicleap

 This time, Magic Leap investment dollars may come from Saudi Arabia government wealth fund

By Nancy Dahlberg / ndahlbergbiz@gmail.com

A half billion here, a half billion there, and another potentially huge leap for South Florida’s secretive startup.

The latest news: Magic Leap, the mixed-reality technology company based in Plantation, is in talks for a $400 million investment from Saudi Arabia’s Public Investment Fund, the Financial Times reported on Friday. That would bring Magic Leap’s funding to $2.3 billion, unprecedented for a company that hasn’t yet launched its first product.

According to the FT, the deal is expected to be announced in the coming weeks, said the report, which cited sources close to the deal.

While Magic Leap and the Saudi wealth fund would not confirm the news, if true it follows a pattern. In October, just a month after Bloomberg revealed a half billion mega-deal was in the works, Magic Leap announced it had raised $502 million in a funding round led by Singapore government-owned investment firm Temasek Holdings TEM.UL and began dropping more hints the technology will be revealed soon.

The new funding is an extension of the $502 million round and would be at the same $6 billion valuation, the FT said.  If completed, the FT said it would be the second high-profile U.S. tech investment for the $230 billion Saudi government fund. In 2016, the fund invested $3.5 billion into Uber.

The internationalization of Magic Leap's funding follows a pattern too. Earlier Magic Leap raised a similar amount from Alibaba in China. Its other funders include Google, Fidelity, various studios and other Silicon Valley funders.

Magic Leap’s “mixed reality” glasses feature its digital lightfield technology. In December, it unveiled some more details of its first product in development, Magic Leap One, which will be available first to selected developers and designers. Founder Rony Abovitz has said the spatial computing technology will provide a more natural computing experience that could replace the phone.

READ MORE ABOUT MAGIC LEAP ONE AND THE JOURNEY TO GET THERE HERE.

Two weeks ago, at a Recode conference, Magic Leap announced a partnership deal with the NBA.  Shaquille O’Neal starred in a promotional video too.

Follow @ndahlberg on Twitter. 

February 22, 2018

Home61 launches flat-fee service aimed at increasing efficiency, decreasing costs of home-selling

Home61_2

The traditional way isn’t the only way.

A Miami real estate-tech startup is offering owners a flat-fee service to sell their house or condo, rather than paying the traditional 3 percent.

Until now, Home61, which uses technology to streamline the residential home buying process, was primarily tackling the buying side of the market. But on Thursday, Home61 launched a flat-fee service that provides homeowners with dedicated agents who use  a data-driven platform to efficiently list, market, schedule viewings and close the sale of their properties.

“We are now entering the sell side with this flat fee structured home-selling service, aimed at offering a better service at an honest price to homeowners,” Olivier Grinda, CEO and co-founder of Home61, told Starting Gate. “Our ambition at Home61 has always been to become the real estate ecosystem for our clients. Adding the sell side offering was the natural next step.”

The fee, $6,100, would be lower than the traditional 3 percent real estate agent commissions for listing most homes . For any home selling for about $332,000 – the median existing-home sales price in South Florida – the service would save more than $4,000. On a $500,000 home or condo, the savings would be about $9,000. Home61 aims to sell over 200 homes through the service in 2018 and double that number in 2019.

“Our agents will maintain their commission split on deals with buyers, but for selling properties, the clients will work with a specialized team that has been trained on selling homes and work with the flat fee model,” said Grinda (pictured below), who was raised in France and moved to Miami from Brazil in late 2013. “We see both sides of the business as complementary, as managing listings brings new buyers to our traditional team and buy side clients will eventually sell.”

Home61

Home61 tested the service with a client in December. That client introduced Home61 to other clients and it ended up with seven properties under management. Two properties have already sold. “We did not anticipate such a ramp-up and had to hire more people faster,” Grinda said.

Home61 has about 65 real estate agents and expects to reach 100 agents by June on the buy side. In 2017, it generated more than $100 million and sales and completed its 1,000th closing of homes and rentals. Home61 expects to do 800 closings this year. [Read about its startup story here.]

Last fall, Home61 raised a $4 million round of financing from FF Angel, Founders Fund’s early stage investment vehicle, global marketplace investment firm FJ Labs, co-founded by brother Fabrice Grinda, and Miami Angels, South Florida's largest angel network formerly called AGP Miami, to help fund its national expansion.

“This new service is a continuation of our aim to bring honesty and transparency to the real estate industry,” said Grinda. “Innovation is sorely lacking in the space, and consumers end up paying the price for it – they pay overinflated commissions for sub-par service. Adding on this service allowed us to take a more holistic approach in addressing this problem by serving both sides of the market, buying and selling.”