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Innovate Arkansas Firms Experiencing Success

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Since its inception in 2007, Innovate Arkansas has counseled and mentored hundreds of Arkansas tech startups, placing them in position to succeed and create high-paying jobs. With about 85 currently active client companies, IA continues to nurture tech entrepreneurs and help grow the state’s budding tech startup ecosystem.

It has played such a critical role in the development of the state’s tech startups that Fund for Arkansas’ Future, the state’s first angel fund, looks to invest almost exclusively in IA client firms. In 10 years, 21 of the 26 early stage Arkansas startups in which it has invested have been IA firms, said FAF Director Jeff Stinson.

“Not only has IA fundamentally improved both the quantity and quality of our fund’s deal flow, they’ve become such a fundamental factor for the success of these companies, it seems unlikely we’d invest in a company which isn’t an IA client,” he said.

A few of IA’s successful client firms include Acumen Brands, the e-commerce giant behind Country Outfitters; Sumotext, the SMS messaging, short-code and mobile-management platform; DataRank, the social media analytics platform that helps businesses track conversations about their brands and competitors; RxResults, a self-styled pharmacy risk-management company that uses an evidence-based prescription model; and Treatsie, the online subscription service for, and promoter of, independent, artisan-crafted candies.

Together, these five IA startups account for more than 250 jobs and $65 million in revenue.

Acumen Brands, Fayetteville

Founded by a doctor who finally gave in full-time to an inner entrepreneurial bug, Acumen perhaps is poised to one day join the ranks of northwest Arkansas’ global titans Wal-Mart, Tyson and J.B. Hunt. In fact, that’s the stated goal of Acumen founder John James: for Acumen to be No. 4 in NWA behind the big 3. Its Country Outfitter brand has the company well on its way. Country Outfitter boasted nine-figure sales in 2014 with more than 10 million Facebook fans. Plus, it’s partnered with several A-list country music stars. Acumen has 200-plus employees and a fleet of more than 50 Kiva robots that fill orders from its west Fayetteville warehouse.

Acumen’s rise has been fueled by its attraction to investors in Arkansas and across the globe, who’ve plunked down more than $90 million in the last five years.

Acumen’s $83 million round in 2013 from New York’s General Atlantic remains the largest single investment in an Arkansas startup.

James has since moved on from his role as CEO to focus on other ventures, but retains his role as founder and remains an Acumen board member.

“We’ve assembled a group of hyper-talented, hyper-competitive people pursuing the audacious goal of changing the entire face of retail,” he told Arkansas Business last year. “With a great team pursuing a huge idea, growth comes naturally.”

Sumotext, Little Rock

Sumotext is one of those companies that many consumers may never realize has impacted their lives. If you interacted in last year’s Starbucks Frappuccino marketing campaign or in

2013’s mobile photo-sharing campaign for Corona or received messages or notices from brands like Southwest Airlines and EA Sports or even local schools such as Little Rock’s Catholic High and Christ Lutheran School, then you’ve been a part of the Sumotext experience.

Its mobile messaging platform is consistently rated among the best in the world. Earlier this year, TopTenReviews.com rated it a 9.98 out of 10 and called Sumotext the “most comprehensive service out there” and a service that “will help propel your mobile marketing campaign forward.”

Other Sumotext clients include the Army National Guard, L’Oreal, Firehouse Subs and other national and global brands. But Sumotext remains rooted in Arkansas. In addition to local schools, which use Sumotext to send out information about school closings and more, Sumotext is the platform through which audience members determine the pitch contest winners at the annual Donald W. Reynolds Governor’s Cup collegiate business plan competition.

“Innovate Arkansas has been a source of counsel and encouragement,” said founder and CEO Tim Miller. “If they don’t have an answer, they know who to call. They have met with us regularly, stayed on top of our progress and needs and allowed us to share our story with potential investors.”

DataRank, Fayetteville

Since its 2011 Fayetteville launch by former University of Arkansas students, DataRank has achieved rarified status in the tech startup space, certainly by Arkansas standards but, really, by any measure of startup success. In addition to raising a $1.4 million funding round, DataRank was accepted into the uber-prestigious Y Combinator accelerator program in Silicon Valley in 2013.

Its platform has been featured by prominent tech publications TechCrunch and Mashable, and in a nod to contemporary American cultural relevance, DataRank even has its own Wikipedia page.

Last year, it grew its customer base that already included clients such as Clorox and ConAgra Foods by 240 percent and expanded its product portfolio. While it was at it, CEO and co-founder Ryan Frazier said the company also redesigned its core product and re-engineered its backend infrastructure.

Early on, Frazier hooked up with Innovate Arkansas. The DataRank team now includes 15 full-time employees.

“The team behind IA has been a constant support group for me since starting DataRank,” Frazier said. “They have been very actively available whenever we have needed it, and their support and guidance have been instrumental to me becoming a better leader and business owner. I can confidently say that we would not have gone as far as we have as fast as we did without their mentorship, and we will continue to keep them close to our business.”

RxResults, Little Rock

Formulary may not be as sexy as running short-code messaging campaigns for Starbucks and Corona, building giant e-commerce companies or telling businesses what their customers are saying about them on social media, but pharmacy touches virtually everyone.

And RxResults, which came out of the University of Arkansas for Medical Sciences BioVentures incubator, is offering what it likes to call its own version of health care reform through pharmacy risk management.

Its secret sauce is an evidence-based prescription drug program that enables large self-funded employers to realize prescription drug savings.

RxResults has clients in 12 states including Dillard’s; the Municipal Leagues in Arkansas, Texas and North Carolina; Crete Carrier; hospitals in Louisiana, Florida and Georgia; and the Community Health Network of Connecticut. It has worked with the Arkansas Employers Health Coalition, the University of Texas System, the Missouri High Risk Health Insurance Pool and the Clovis School District in California.

The firm has grown to 27 full-time employees and recently expanded its product offerings to include specialty pharmacy management and medication therapy management. Plus, RxResults raised a $4 million funding round in August of last year.

“IA has been instrumental in our success since inception as they helped craft our message designed to most effectively reach our target markets and also helped model our story and value proposition to the investor community as well,” said CEO Tery Baskin. “They are a critical component of the Arkansas entrepreneurial ecosystem in coordinating the relationship between startup companies and potential investors.”

Treatsie, Little Rock

Candy consumers from all 50 states and many countries are saying, “Yes, please,” and paying for Treatsie’s monthly service. Treatsie began as an idea pitched by co-founder Keith Hoelzeman at an Innovate Arkansas G60 pitch contest in Conway, after which the founders formally became IA clients. They’ve been in steady growth mode ever since, attracting funding rounds from Gravity Ventures and the Fund for Arkansas’ Future.

For now, plans call for growing monthly subscribers and the online store. Treatsie offers a line of themed boxes such as chocolate, coffee and even bacon as well as a four-tier executive gift plan. Through Treatsie, one customer discovered that she loved a sweet treat produced by a maker located just blocks from her home in Portland, Oregon.

“That’s the opposite of how we expected it would work,” co-founder Jamie Walden said. “But it’s kind of become like culinary tourism for treats. We’re excited about the potential there, where instead of just ordering candy or giving a gift, you get an experience.”

Hoelzeman said Innovate Arkansas helped place Treatsie on track to make those kinds of connections.

“They help client firms with a wide range of subjects and help you put ideas into motion,” he said. “IA’s advisers have a wealth of expertise in many categories, and they supported us and helped us network, develop our platform and pointed us in the right direction.”

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