After IPOs and acquisitions, a look at Utah’s biggest venture rounds of 2019

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

This morning we’re dialing into some late-stage venture activity in Utah. Why? Because Utah has become a hotbed of startup activity, yielding both IPOs and huge acquisitions. And as Utah isn’t a media hub in the way that San Francisco and New York City are, it’s often a bit undercovered.

So what better place to cast our eye?

Today we’re going to look at the seven largest venture rounds in the state that have been recorded by Crunchbase in 2019 (no post-IPO action, no grants, no secondaries, no debt, no private equity). We’ll quickly explain each company, look at its investor list, and then ask ourselves how soon we think the company might go public.

Ready?

Countdown

Exploring our seven largest rounds, let’s start from the smallest of the cohort and proceed up in dollar-scale (full list here).

HZO’s $40 million Series D

Based in Draper, Utah, HZO’s tech coats electronics with tiny particles so that the elements can’t wreck them. The startup does more than just coat phones, working with industrial equipment, automotive tech, and IoT tooling.

It’s a business that has attracted well over $100 million in capital to date, according to Crunchbase. That sum includes a $20 million Series B led by Iron Gate Capital, a smaller, $15 million Series C led by Iron Gate Capital, and HZO’s latest $40 million investment led by, you guessed it, Iron Gate Capital. Horizons Ventures has also put money into the company, while Cathay Bank lent it $30 million.

Using our patented gut-check-o-meter, we aren’t expecting an S-1 from HZO soon.

Nav’s $45 million Series C

Another Draper, Utah, company raising large sums this year, Nav is a credit information marketplace for smaller companies. Investigating this morning, Nav feels a bit like Credit Karma, but for SMBs looking at taking on additional credit.

The model has attracted lots of external funding, including a 2015-era Series A from Kleiner that tipped the scales at $8.4 million. Nav’s 2017 Series B weighed in at $37.7 million. And, most recently, it picked up a $44.9 million Series C that was co-led by Experian Ventures, Goldman, and Point72 Ventures.

What’s our IPO guess? Given that it raised a Series C this year, we’d expect at least another round — maybe two — before we see SEC filings of interest from Nav.

Weave’s $70 million Series D

Weave’s Series D is notable in that it valued the company within spitting distance of unicorn status. Indeed, the $70 million round brought its valuation up to $0.97 billion according to Crunchbase.

Back to basics, Lehi-based Weave sells customer engagement services like calling, messaging, payments and marketing bundled into a single service. The company has been on a tear. I covered its $37.5 million Series C back in 2018. My friend and former colleague Sophia Kunthara covered its more recent $70 million Series D earlier this year.

The company is backed by A.Capital Ventures, Crosslink Capital, Catalyst Investors, Lead Edge Capital and Tiger Global.

Weave, along with Podium and Divvy, is among Utah’s known fast-growers. We predict one more venture round, probably worth more than $100 million, before Weave files to go public.

Galileo Financial Technologies’ $77 million Series A

Galileo Financial Technologies (GFT) is an interesting company. It lands on our list of largest venture rounds from Utah in 2019 with its very first-known round.

The company’s $77 million Series A is certainly eye catching. Not only is the round huge for its Series, but the financing was led by Accel, a well-known venture house, and participated in by noted local entrepreneur Ryan Smith (best known for selling his company Qualtrics for a zillion dollars).

GFT helps other companies create bank accounts and issue cards. That is a hot space, as the current fintech boom has led to a host of startups working to become bank-like entities thanks to the power of interchange. (I have a piece cooking about payments, Finix, and the future of that space, by the way.) Deserve is another company in the space.

Anyhoo, Galileo Financial Technologies is either close to an IPO (Crunchbase lists its founding year as 2000), or far from it (it just raised a Series A). Hard to say, though of course we’d love to see a filing.

MX Technology’s $100 million Series B

Tired of fintech stuff? Too bad. MX Technology’s huge Series B means we have more to talk about.

Founded back in 2010 according to Crunchbase, MX Technology has raised $175 million so far, including its most recent round. The company helps old-fashioned banks go digital; this is no small task given the scale of data present in banking systems, and the demands that end-users might have. Building a working mobile experience isn’t easy if you haven’t done it before, and so forth.

Notably MX has raised all its known capital in just three rounds: A 2014-era, $20 million Seed round, a $55 million Series A led by USAA, and, its most recent round, a Series B worth a flat $100 million. Battery Ventures is the company’s latest financial backer.

It’s hard to guess how close to an IPO MX is, other than to say that it’s now raised more than some companies in the $100 million ARR club, so we have pretty high expectations for its current revenue scale.

Recursion Pharmaceuticals’ $121 million Series C

Recursion Pharmaceuticals is a little hard to explain, but with a minimum of hand-waving, here’s what we have: Recursion uses super-modern tech to help run more tests on possible drugs, helping speed drug discovery. Or more simply, you can build an intelligent, automated system that can test more possible drugs than humans can do on their own.

The model has attracted over $200 million in external capital so far. Selecting from its extensive, and varied fundraising history, Recursion raised a $12.9 million Series A from Lux Capital in 2016. It raised a $60 million Series B from Data Collective. And it raised a $121 million Series C in 2019, led by Scottish Mortgage Investment Trust.

IPO readiness? Not close, is our guess. The tech is cool, but it doesn’t feel like the Salt Lake City-based company is close to pulling the trigger on a public debut.

Divvy’s $200 million Series C

Finally, Divvy. The late-stage startup, based in Lehi, Utah, is a quickly growing company that offers its business-oriented payment and expense software for free. It makes money on interchange fees, taking tiny cuts of transactions; this model is similar to why every company in the world wants to offer you a debit card — the regular revenue flow is simply too attractive to not pursue.

Divvy is a company in a hurry. The firm put together a Seed round in late 2017 ($7 million). It then raised a Series A just months later in May, 2018. That $10.5 million round was led by Pelion Ventures. But, another few months later, Divvy put together a Series B worth $35 million led by Insight Partners. Then it took a break, waiting a full 11 months before announcing its Series C, a $200 million infusion led by New Enterprise Associates.

The company’s last round gave it a $700 million, post-money valuation according to Crunchbase. Given the company’s relatively recent mega-round, we don’t expect an IPO soon. Perhaps another round in 2020, and an early 2021 debut. That would feel about right, time-wise.

And that’s a look at Utah’s 2019. More to come on Boston and other startup hubs. Make sure you are following Extra Crunch on Twitter!