10 Phoenix startups making tech bloom in the desert
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Photo credit: Phoenix Chamber of Commerce

Photo credit: Phoenix Chamber of Commerce

Phoenix is one of the cities attracting talent away from Silicon Valley. These are the fruits of their labor

Phoenix Arizona, (trivia test), is the US state capital with the largest population (1.53 million as of 2015). The 4.3 million people in the metropolitan area make it the 12th largest in the US. Being the state capital helped make Phoenix the cultural and business hub of the state. Before air conditioning made the aptly-named Valley of the Sun bearable after World War II, the area was known for the “Five C’s” meaning cotton, cattle, citrus, climate, and copper.

Four Fortune 500 companies call Phoenix home, as do teams in all major professional sports and Arizona State University. Proximity to Silicon Valley but a much lower cost of living, not to mention some great scenery and plenty of money available for investments, have made Phoenix a “hot” (literally and figuratively) startup market.

1. appsFreedom

Photo credit: appsFreedom

Photo credit: appsFreedom

Enterprise executives love mobile devices, but they have a love / hate relationship with Oracle, SAP, and other ERP systems. Enter appsFreedom and their Freedom Apps that make ERP portals easy to create and deploy, along with a variety of other mobile device-friendly enterprise overview products like Material Traceability, Field Inspection, and Logistics.

Vaidy Iyer, Founder and CEO, launched the app development platform in 2013 with $3.7 million in venture funding and started winning awards the next year. More investors pitched in during 2014 and 2015, bringing total support to about $4.57 million in four rounds from two investors.

2. CampusLogic

Photo credit: CampusLogic

Photo credit: CampusLogic

Rising college costs keep making headlines, but a degree still makes financial sense. Helping students and schools make sense of the twisted tangle that is financial aid from first enquiry through graduation, CampusLogic leverages their cloud-based expertise to make the money side of higher learning as painless as possible.

Founder Gregg Scoresby started CampusLogic by winning the Venture Madness 2015 run by the Arizona Commerce Authority, which included a $250k grant. In October of that year, Series A pulled in $7.5 million, followed by a $10 million Series B round in March of 2017.

3. Crowd Mics

Photo credit: Crowd Mics

Photo credit: Crowd Mics

Everybody loves to be heard, and everybody loves to do something new and cool with their smartphones. Crowd Mics gives you the best of both with their suite of software that turns attendee’s smartphones into wireless microphones and polling devices.

Founded in February 2014, Crows Mics lured $1 million from Sand Hill Angels in June 2015 and another million from a variety of Arizona angels in November of the same year. Tim and Sean Holladay (older and younger brothers) founded the company together. The company is, ahem, making some noise.

4. Emailage

Photo credit: Emailage

Photo credit: Emailage

“You’ve got mail!” used to be cute. Now it’s chilling, as viruses, ransomware, and phishing attacks hide inside your inbox. Traditional security tools often fall short when dealing with email, which is why Emailage Risk Assessment scores email data to better protect client companies.

Founded in the spring of 2012, Emailage has since closed a total of $5.67 million in Series A funding from a total of nine investors. While all investments were announced on April 2016, some parts of the investment package came as much as two years earlier.

5. Fathom Water Management

Photo credit: Fathom

Photo credit: Fathom

Phoenix is a desert, which may explain how a water utility built what became a well-funded startup and leader in the water, wastewater, and recycled water market. FATHOM developed a system to view and manage the meter-to-customer process. Now it includes tools to collect data from every point along the water’s journey and use that data to improve utility performance, like decreasing consumption by 10 percent.

Silver Lake invested an undisclosed sum in December of 2014. XPV Capital also pitched in another round of investment, again undisclosed, but their other listed investments range from $6 million to $15 million. Water utilities seem pretty boring and don’t get enough attention, at least until you get thirsty. FATHOM revenues currently run to nearly $17 million annually, supporting 135+ employees.

6. NeoLight

Photos credit: NeoLight

Photos credit: NeoLight

Six out of ten newborns show some symptoms of jaundice, a condition that can stop the liver from filtering out old blood cells leading to yellowish skin, brain damage, and possible death. Sivakumar Palaniswamy, one of four founders and CTO of NeoLight, developed the SkyLife product (still pre-release) after seeing the overcrowding in NICUs in his native India. NeoLight can be used anywhere, including at home, reducing hospital stay times.

Founded in 2014, two seed rounds totaling $1.4 million provided by mostly local investors, fund development. Partners include ASU, Dignity Health, and Children’s Hospital of Los Angeles.

7. NextNet Partners

Photo Credit: NextNet

Photo Credit: NextNet

Who is the next world-class IT services firm, and where will their headquarters be? Maybe NextNet Partners, who started in a Phoenix suburb back in the fall of 2011, and now claims revenue of nearly $20 million. Sure, that’s way shy of IBM and Accenture, but NextNet is deep into networking and security, two areas modern businesses spend more and more on each year.

CEO and Founder Phil Calzadilla spent 14 years at Cisco, and NextNet is an involved Cisco reseller and consultant firm. Cisco powers the Internet, or at least a huge part of it, and companies like NextNet sometimes double in size with one contract for a national client.

8. Parchment

Photo Credit: Parchment

Photo Credit: Parchment

Founded in 2005 with an undisclosed amount of Series A funding, Parchment deals with an issue outsiders may never consider: an advanced academic credentials management system for students, educators, and employers. The company claims they have helped thousands of schools with over 15 million credential exchanges globally.

Collecting $59.05 million in six rounds in total, Parchment kicked into startup mode again after CEO Matthew Pittinsky invested a total of $10.5 million in 2011. March 2014 saw that investments tripled with $35 million of Series D support, and March 2016 saw another $12 million add to the coffers. Annual revenue is now nearly $6 million.

9. Pure Chat

Photo credit: PureChat

Photo credit: PureChat

Huge e-commerce websites have the resources to track and engage prospects during every step of the online buying process. Pure Chat aims to even the playing field with their inexpensive engagement tools developed just for small to medium sized businesses.

Bootstrapped by founder Hamid Shojaee in October 2012, Pure Chat soon got validation with a Series A placement by Tallwave Capital for $1.5 million. Employees (or the business owner) can engage customers through a desktop, tablet, or even their mobile phone.

10. WebPT

Photo credit: WebPT

Photo credit: WebPT

The doctor’s struggle as they try to feel comfortable with EMR (Electronic Medical Records) may get too much attention, but there is a universe of other medical professionals with the same issue. WebPT focuses on Physical Therapists, a crucial part of the treatment chain. Their paperwork hassles may be even more aggravating because PTs are the third wheel between doctor and patient and recovery.

Heidi and Brad Jannenga founded WebPT in 2006 to improve Heidi’s physical therapist practice. Series A ($1 million) in December 2010 led to $43 million in April 2014, then another undisclosed amount in June the same year. Reported revenues are nearly $27 million, and over 8,500 PT clinics use the software.

 

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James Gaskin

About James Gaskin


James writes books, articles, and jokes about technology, and consults for those who don't read his books and articles.

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