Austin software maker Phunware buys mobile developer Digby [Austin American-Statesman :: ]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) May 06--
When mobile software maker Phunware raised $30 million in venture capital in March, the company said the deal would allow it to make acquisitions.
On Tuesday, Phunware followed through, buying Austin mobile software developer Digby for an undisclosed price.
Phunware develops custom mobile applications for major entertainment, sports and media firms including Warner Brothers, NBC Sports and NASCAR. The company developed an interactive app for the Discovery Channel show "Mythbusters," as well as the popular Petfinder app.
Phunware received the latest round of funding from investors including Firsthand Technology Value Fund, Fraser McCombs Ventures and Maxima Ventures. It has raised a total of $43 million since it was founded in 2009.
Phunware CEO Alan Knitowski said in March that in addition to making acquisitions, the company plans to expand its 140-person workforce by up to 60 people. The company also is aiming to increase revenue from $22.1 million last year to $50 million this year, he said.
Since launching in 2006, Digby has helped major retailers such as Home Depot and Costco build mobile websites that can be accessed with smartphones.
Two years ago, it expanded its smartphone technology to help retailers connect with customers who are shopping inside the store. Localpoint, a location-based mobile platform, lets users check in when they enter a store, allowing the retailer to make special offers or other promotions while they have a captive audience.
Retailers can also reach customers when they're driving near their store and send them special offers to try to sure them in.
When Austin entrepreneur Dave Sikora founded Digby, it was one of the city's first startups focused on e-commerce for mobile phones.
Digby, which has about 60 employees, raised about $16 million from investors including Battery Ventures, BlackBerry Partners Fund, S3 Ventures and Daylight Partners. Its customers include Cabela's, Kohl's and Hasbro.
Knitowski called Digby "a pioneer in the mobile commerce and location-based marketing software market," and said his company was "thrilled to add their team and platform to the expanding Phunware ecosystem."
Phunware plans to integrate Digby's software into its own location-based services offering.
Last year, Phunware acquired California mobile advertising company Tapit Media Group for $23 million. Tapit develops and syndicates display and full-page ads for iPhone and Android phone apps. Tapit served as the foundation of Phunware's mobile ad platform and operates as "Tapit by Phunware."
At the time of the acquisition, Knitowski said two-thirds of mobile apps are downloaded for free, which means companies are looking for ways to generate revenue through advertising.
Market research firm eMarketer estimates that mobile ad spending will grow to $72.3 million by 2017, nearly 10 times higher than 2012 spending levels.
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