Richard Howe
Conway tech firms Inuvo Inc. and PrivacyStar announced Thursday that they will move to the Museum Building in the River Market District of downtown Little Rock.
Publicly traded Inuvo will occupy about 13,000-SF of renovated space on the building’s third floor, while PrivacyStar will occupy 13,000-SF on the second floor. The firms signed a five-year lease. The Museum Building is located at 500 President Clinton Avenue.
Inuvo CEO Richard Howe said he expects both firms to be in their new spaces by October. Each firm employs about 50 people, and all employees from both firms will make the move. PrivacyStar operates a one-man marketing office in San Mateo, California, which will remain open.
The moves were formally announced Thursday morning at the Little Rock Regional Chamber of Commerce, but early word was reported Wednesday by the Arkansas Democrat-Gazette.
Howe said the growth of his digital publishing and ad-tech business necessitated the move, and added that PrivacyStar was experiencing similar growing pains.
“We were fortunate to find a cost-effective space in the heart of Little Rock, in close proximity to the Little Rock Tech Park and other local amenities that will accommodate our current and planned growth,” Howe said in a news release.
Howe told Arkansas Business that the Museum Building, which houses the Museum of Discovery, is a perfect fit for both companies given the momentum surrounding the tech park and the growth of a tech startup ecosystem in central Arkansas.
Howe said Inuvo experienced 36 percent growth the first quarter of 2015, and its annual revenue is $50 million.
Both companies have ties to former Acxiom Corp. CEO Charles Morgan. Morgan is a member of Inuvo’s board of directors, and he is chairman and CEO of PrivacyStar, which makes a call and text blocking app for smartphones. Howe is a former chief marketing officer for Acxiom. Inuvo manages much of PrivacyStar’s IT work.
Both companies have been operating at 1111 Main Street in downtown Conway. Morgan said both firms looked for space in Conway but couldn’t find any to fit their needs. They also considered building, he said, but needed the space sooner than new construction would allow.
In 2013, Inuvo moved from expensive office space in New York City to Conway, part of “efforts to become profitable.” It received a $1.75 million grant from the Arkansas Economic Development Commission.
Morgan said Inuvo was close to bankruptcy in 2013 when he helped persuade company leadership to move to Arkansas. Morgan now says that Inuvo is the seventh-best performing stock and the second-best, non-biotech stock on the NYSE MKT LLC, formerly known as the American Stock Exchange.
“That was a difficult decision for us,” Howe said. “We thought we must be crazy to contemplate such a move. This was madness. It turns out to be the best decision we ever made.”
Howe credited support from the state and the Arkansas talent pool with pulling Inuvo back from the brink.
“We knew if we moved to Arkansas, we’d have a talent base receptive to our business,” he said.
Morgan said both companies have added 30 to 40 jobs in the last year, and he expects similar growth in 2015.
“We’re terribly excited about this move,” he said. “We love Conway but Little Rock is a fabulous place to live and work.”
Mayor Mark Stodola said the move represents a clarion call that “Little Rock is a cool place.”
“This is a cool place,” he said. “Central Arkansas — Conway, Little Rock, North Little Rock — is a place where tech firms can prosper.”
In February, Inuvo, which also develops consumer Internet applications and delivers targeted online advertising, reported fourth-quarter net income of $645,000, up from a $253,000 loss in the same quarter last year. Full-year earnings rose to $2.1 million from a $477,000 loss in 2013.
The four-story, 200,000-SF Museum Building is owned by Little Rock Newspapers Inc., which is controlled by Democrat-Gazette Publisher Walter Hussman. The building, built in 1927, once housed the newspaper’s printing press.
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