Raising money will always be a challenge for technology companies, and in the South, startups will have a harder time than if they were based in well-oiled venture capital hubs like Silicon Valley, Boston or New York.
An October report from BIP Capital puts the challenge into perspective: A company with $1 million in revenue would be priced at $8.8 million in one of those larger cities. In the Southeast, the same company would command $3.8 million.
Simply put, there is less capital available in the Southeast. Still, investors have pumped $457 million into South Carolina since 2013.
Despite the difficulty in capturing the funds, there were several success stories this year. A notable mention this month is Atlanta-based communications company Avoxi, which raised $10 million and is expanding its presence in Charleston.
Among companies based in the Charleston area, here are the biggest winners of 2018, from least to most capital raised:
Vizbii Technologies: Located on King Street, it raised about $2.8 million by this August, closing out its first investment round and moving on to another. It makes Morphii, a toolkit that helps users express their emotions.
Right now, the kit is applied to review systems and offers more detailed information than a star rating, for instance.
But Brian Sullivan, co-founder and president of the company, said the firm hopes to work on the development of a Morphii-based suite of applications in the coming year. They aim to create an app that would aid people on the autism spectrum communicate their feelings and guide them to a calmer state when they’re upset. It would also incorporate machine learning, meaning it would grow smarter about its user as they utilized the app.
“We’re really excited about developing something new, engaging and frankly, more effective,” Sullivan said.
Sullivan, a clinical psychologist, said his goal is nothing less than eliminating loneliness.
Heatworks: Mount Pleasant-based Heatworks pulled in $5.3 million this year, mostly in options. The investments come as the company works to bring a new product to market.
The first, a tankless water heater that runs on a patented technology, recently made Time magazine’s list of best inventions. Now, they’re applying the technology to a dishwasher with a transparent, stylish lid that sits on top of a kitchen counter. It says the innovation saves consumers both water and energy.
But Heatworks also is looking to sell its technology to other businesses — for instance, its CEO Jerry Callahan said coffee makers are interested in using Heatworks to precisely warm the water they use to make fine coffees.
Engage Talent: The Mount Pleasant-based technology company creates software that helps employers get a jump on hiring the best employees. In fact, the technology identifies employees at companies that might be close to making a move. Engage Talent is one of a handful of tech companies in the human-resource arena in Charleston, a group that includes publicly traded Benefitfocus.
The $3 million it brought in early this year came from a fund called Rise of the Rest, which works to lift up tech companies outside of traditional technology hubs.
CEO Joseph Hanna told The Post and Courier the startup put the money into its technology, as well as an expansion of its sales and customer support teams.
Ceterus: Accounting company Ceterus’ raise of $10 million was impressive for a Charleston-based software company, bringing its total to about $20 million.
Ceterus makes accounting software for small businesses and franchise owners.
Looking forward, CEO Levi Morehouse has said he would like to see the software Ceterus creates becoming more predictive, offering clients more insights about what they’re doing right and wrong.
Phishlabs: In the largest investment round of the year, cybersecurity company Phishlabs raised $20.5 million. They used the money to buy another, competing firm, BrandProtect, in the spring. CEO Tony Prince said it has been one of the smoothest acquisitions he’s ever participated in, calling the merge a “strong culture fit.”
“They’re people we would want to be part of our team even if we didn’t do the acquisition,” Prince said.
The acquisition doubled the firm’s client base. Prince said the company will be working on making the experience with Phishlabs’ technology as seamless for their customers as possible. It will also be hiring in the Charleston area.
In the meantime, investment groups with the company will be scouting other possible acquisitions, Prince said.
Reach Mary Katherine Wildeman at 843-937-5594. Follow her on Twitter @mkwildeman.