Flows of capital to Dallas-area startups are off to a rapid start in 2023, a trend that mirrors last year's before venture support plummeted amid economic uncertainty at the end of the year.
Since Jan. 1, at least five companies founded in North Texas have attracted significant investment, including the region's newest “unicorn” (awarded to a startup that reaches a valuation of $1 billion). This includes a $300 million round with a label.
Previous investment transactions include:
- Dallas-based ShiftKey has donated $300 million to a technology company that connects qualified professionals with healthcare companies seeking open shifts. Investors include Lorient Capital, Ares Management, Pantheon, Clearlake Capital, and Health Velocity Capital.
- Donated $40 million to Dallas-based Inbenta, a conversational AI platform that automates customer service interactions. Tritium Partners led the investment round.
- $35 million to Addison-based Medix Infusion. The company provides personalized care to improve access to IV therapy for chronically ill patients in rural, suburban and underserved areas. Investors include Echo Health Ventures, Pittco Direct Investments II, and Noro-Moseley Partners.
- $21.2 million to Dallas-based Worlds Enterprises. Worlds Enterprises is a technology platform that brings AI-based automation to the ground floor operations of large enterprises.
- Donated up to $15 million to Dallas-based ReCode Therapeutics to develop a genetic platform that can deliver drugs to selected organs in the human body. Its inhaled messenger RNA therapy could eventually be used to treat cystic fibrosis. The Cystic Fibrosis Foundation is an investor.
In addition, lottery betting app and website Jackpot.com received $42 million in support from some of Texas' largest sports franchises, the Dallas Cowboys, Houston Rockets, and San Antonio Spurs, this month. We have expanded into Texas.
Decline in 2022
Venture support for North Texas innovators has been on the rise during the recovery from the pandemic, with investments exceeding $1 billion in consecutive quarters in late 2021 and early 2022, according to data from research firm CB Insights.
Total investment flowing into Dallas-Fort Worth startups exceeded $3 billion in both years, with $3.65 billion in 2021 nearly tripling the pre-pandemic $1.36 billion in 2019.
Recession fears have investors tightening their wallets as 2022 closes out, with funding in the region at its lowest level in three years, or $190 million in the last three months. It decreased to .
Global venture funding fell 35% from the previous year to $415 billion last year. In the United States, the year-end total was $198.4 billion, a decrease of 37%.
Funding rounds of $100 million or more fell by 50%, the lowest level in 10 quarters.
Introducing the new “Double Unicorn”
Leading the way this year is ShiftKey's major funding round, valuing the company founded by Tom Ellis in 2016 at $2 billion.
ShiftKey built a unique scheduling platform for the healthcare industry, connecting qualified professionals with facilities looking to fill shifts. The company says its platform is used by more than 10,000 medical facilities nationwide.
“By giving qualified professionals the freedom and flexibility to choose when, where, and how they want to work, ShiftKey is a great way for qualified professionals to work,” David Berman, managing partner at Lorient Capital, said in a statement. “We are changing the future of work.”
Its mobile app allows nurses, radiologists, respiratory therapists, and other healthcare workers to search for and bid on shifts nearby to fill absent employees.
Ellis and his company earned multiple honors last year, including No. 1 on Southern Methodist University's Dallas 100 rankings. The program recognizes the fastest growing companies in the region with sales between $500,000 and $100 million.
According to SMU, ShiftKey's revenue grew 2,000% in three years. SMU does not disclose revenue figures for the companies it ranks.
“During the peak of COVID-19, healthcare facilities struggled to staff shifts 24/7,” said Simon Mack, executive director of the Caruth Institute for Entrepreneurship at SMU Cox School of Business. “The platform that ShiftKey provided was literally a lifesaver.”
It joins other prominent North Texas unicorns Caris Life Sciences, o9 Solutions, LTK, Island, and Mavenir. Tracking site Crunchbase lists 1,432 companies as unicorns.
