Mike Cook, the CEO and Founder of XOR Data, wanted to start his company in Austin because of its active entrepreneurship culture and the potential to raise local capital.
But when he went out to gather capital, he didn't find what he was looking for in Austin.
"We tried with the local folks, but I think we were a little outside of their criteria," he said, noting that he doesn't see many venture capitalists interested in the data and analytics space. Instead, his company found its Series A round in Wisconsin, Washington D.C. and Chicago.
Cook said his company set out to raise $3 million. He ended up finding a $1.8 million seed round and $4.2 million in Series A financing through American Family Ventures, in Madison Wisconsin, Lakewest Venture Partners in Chicago and Fenway Summer, in Washington D.C. -- among others.
"Austin entrepreneurs are a great breed of people," he said. "And it would be great for Austin (companies) to be benefiting with capital from Austin."
XOR Data Exchange launched in 2014 by building strong relationships with car dealerships, credit card companies and the business services divisions of companies like AT&T Inc., Verizon Wireless and Dish Network Corporation. The companies pay XOR Data Exchange to help vet small business customers by exploring their web presence and many other data points. For example, a small business may be looking to get cable or cell phones for its office and employees. XOR Data Exchange helps the service provider understand the details of that new small business and what kind of credit risk it may represent.
XOR isn't yet generating revenue, but Cook said it's very close. And the new round of funding will push the company to profitability within a year, he said. XOR will then likely look for a Series B round. And Cook said he'd love to find a way to raise that money in Austin -- or elsewhere in Texas.
Cook's first startup, ID Analytics, grew from its conception in 2002 to a fast-growth company with 280 business clients and, later, its acquisition by LifeLock Inc. in 2012.
Cook said that XOR Data Exchange may hire a few people as part of its growth into new markets. But he said their business model is mostly based on their existing proprietary products and that expanding that to new industries likely won't require many new hires. But the 10 employees currently there face a lot of new opportunities, he said.
"We have our work cut out for us," he said.
