Denver's Tech Gurus on the Top Startup Stories of 2015

Confluence Denver recently spoke with local tech luminaries Erik Mitisek, J.B. Holston, Tom Higley, Joe Zell and Chris Onan to get their take on the year that was.
Denver is a startup city. The city's entrepreneurs are thriving as they foster their companies to growth stages and beyond. Who better to tell that story than some of the city's entrepreneurial leaders?

Some common themes emerged, like Denver Startup Week (DSW) and the opening of The Commons on Champa. "This free entrepreneurial resource center has hosted over 150 events and 11,000 people in just six months," Erik Mitisek, CEO of the Colorado Technology Association, says of The Commons. "If you're starting up, start there," he contends.

And DSW isn't just a place for companies to look for ways to grow and improves strategies, it's also helped create companies. "Revolar moved from Kickstarter to Techstars to $3 million in funding," Mitisek says. "Its amazing growth and promise for a company founded out of Startup Week."

Eric Mitisek of Colorado Technology Association.Cybersecurity and health tech companies also recurred as points of interest from the entrepreneur community. Some of these Denver companies are moving from a startup status to a growth stage or from a growth stage to potential IPO or other exit in 2016. At the same time a new, innovative financing community is being built in the city to help support these emerging and growing companies.

Mitisek likes Ibotta, which bills itself as a mobile shopping companion an app that offers rebates for making purchases of goods in its system. He calls it a "rocket ship that continues to attract capital and lead its category." He notes that the CEO, Bryan Leach, is "world-class" and that the company has partnered with investors who started Netscape. "They should continue this path to the moon."

Mitisek also sprinkled some love on Rachio, a Denver-based sprinkler controller company that may just have created the "Nest of sprinkler technology." He notes that the company is supported by many Colorado mentors and organizations, closed a large round of funding toward the end of 2015 and developed a successful partnership with Home Depot. "Sprinklers will never be the same."

Serial entrepreneur, founder of the Blackstone Entrepreneurs Network and now dean of the University of Denver's Ritchie School of Engineering and Computer Science, J.B. Holston notes the growth in cybersecurity firms in Colorado as well as health tech companies and new financing opportunities growing out of, well, local startups.

J.B. Holston of University of Denver.Holston points to the new crowdfunding site, Invest Local, as one example, and P2Binvestor as another. "P2Binvestor is an interesting lending platform," he says. It's woman-led business that's already provided $15 million in funding. It aims at offering 8 percent return for providing capital. "So far it's made four investments," Holston says. "It itself was a startup . . . companies it invests in have to have a social impact agenda or outcome associated," he explains.

The growth of IT security firms in Denver is impressive, according to Holston. "We've got four or five private firms that are almost -- or are -- unicorns in this space in Colorado. There's also a big constellation of startups that have launched or been funded in the last 12 months," he says. He and others cite LogRhythm as an example of a growing cybersecurity company in the region. "I think that's a big story, and it is a top-growth category. It's forecast to grow at three times from $77 billion to $150 billion over the next few years."

He also notes Ping Identity, which he says has been around for a while but is accelerating its growth. "In terms of earlier stage firms Coalfire just did a substantial private-equity round." As did ProtectWise. "It's an earlier-stage security firm that just closed a $20 million round," Holston says. "They're the next stage of [cybersecurity] firms."

"There are interesting things going on in the biotech space," Holston says, "Particularly in the medical device space." He points out two metro-area companies focused on pediatric care, JustRight Surgical and Silvergate Pharmaceuticals. Silvergate makes FDA-approved pediatric compound medications and JustRight makes surgical tools allowing surgeons to operate on babies, with appropriately sized and designed tools. "They've been crushing it," Holston says of the latter. "They're funded by local angel capital. That doesn't happen very much, at least in Colorado."

Tom Higley, a serial entrepreneur and founder of 10.10.10, a CEO bootcamp aimed at creating solutions for problems that plague the world, calls the growth of health tech innovation in Denver "explosive." The 10.10.10 Health resulted in the development of burstIQ, he notes. "burstIQ was started and funded within 60 days of the end of the program." 

Tom Higley of 10.10.10.Among other big local wins in 2015, he cites funding for health startups including RxRevu, RxAssurance, CirrusMD, Kindara and Prima-Temp in the Denver area. Another unavoidably big story: WellTok's $82 million rain in series D funding and its stream of acquisition.

Higley also credits "the enormous success of the Prime Health Digital Health Challenge led by Jeffrey Nathanson and an exceptional group of volunteers."

He also sees the new Catalyst HTI center, led by Mike Biselli, as an important health tech opportunity for Denver. Catalyst has "a vision to grow digital health in Colorado with the Koelbel experience in real estate to support it," he opines.

Outside of the health tech sphere, he saw more female entrepreneurs in Colorado, in particular praising Revolar CEO Jacqueline Ros, who recently announced the company's $3 million Series A funding round.

Joseph Zell, Denver-based general partner with Grotech Ventures, also points to LogRythm as one of the local security intelligence companies to watch, noting its multiple awards. "It was named the 2012-2015 leader in Gartner's Magic Quadrant for SIEM," he says. Frost & Sullivan declared it the SIEM and log management market leader, and "Info-Tech Research Group named them as a Champion in the 2015 SIEM Vendor Landscape Report."

Another company Zell saw big things from in 2015 was GutCheck, a qualitative and quantitative market research firm. "It raised $12 million in Series D funding led by Piper Jaffray Merchant Banking, with participation from other existing investors including Grotech Ventures and Rally Ventures," he says.

Meanwhile, Cloud Elements went live with integration hubs with over 100 APIs in a dozen different application categories including: finance, customer support and marketing systems, among others, according to Zell. "This launched them into being recognized in two Gartner Magic Quadrants for Application Services Governance and Enterprise Integration Platform as a Service," he says.

Zell's company invested in CommercialTribe as part of a $6 million funding round with Boulder Ventures and Access Venture Partners. The company makes sales-enablement software for video-based training, he says. Access Venture Partners and Grotech also invested in a $3.9 million Series A funding round for Dizzion, which provides cloud-based desktops as a service.
The rapidly growing startup incubator and educator Galvanize opened up its new Platte Street location in 2015 -- its second campus in Denver. Co-founder and CFO Chris Onan was impressed by the success of DSW this year. "Denver Startup week being the number one free entrepreneur event in the country and having such a monstrous success with over 50,000 attendees," he says. "That's obviously number one."

Artifact Uprising founders and sisters Katie Thurmes, left, and Jenna Walker at the DSW kickoff.Onan observes that a lot of startups graduated in 2014, but local companies like Ping Identity, Craftsy and Ibotta saw "amazing" growth in 2015. He anticipates some big things in 2016 as well. "You're probably going to have a couple of public offerings in 2016," he says. "LogRythm is going to go public for sure. Ping Identity probably late 2016, early 2017."

"There's this continued amazing momentum for the Denver/Boulder tech scene," he adds. "Techstars is expanding like crazy to cities across the U.S. and in fact the world, that's a huge story. . . . Foundry Group is now bringing on Lindel Eakman from UTIMCO. He is going to set up a fund to invest in other funds. I think that's fascinating."

Onan also points out that investors are investing locally. "Jim Kelly, Ryan Kirkpatrick and Ryan Heckman at The Colorado Impact Fund are making a lot of Colorado investments. They're cranking, that's worth talking about. It's having a significant impact."
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Read more articles by Chris Meehan.

Chris is a Denver-based freelance writer, editor and communications specialist. He covers sustainability, social issues and other topics.
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