Axios Pro Rata

October 23, 2021
Tech startup investing used to be all about Silicon Valley and the Acela corridor, but the pandemic has finally prompted many investors to look beyond their geographic comfort zones.
- So this morning we wanted to highlight some recent stories from Axios Local, which now produces daily newsletters in 14 cities (with more to come in 2022).
Today's newsletter is 840 words, 3 minutes.
1 big thing: An antitrust case grows in Austin
Illustration: Sarah Grillo/Axios
Several former aides to Texas AG Ken Paxton are behind an antitrust lawsuit against Zillow, Axios Austin's Asher Price writes.
The big picture: Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings, harming its business, homebuyers and sellers.
- REX's listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure "other listings" tab on the Zillow website, rather than the default tab.
- Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
Michael Toth, former special counsel to Paxton, is general counsel for REX and tells Axios that the ratio of "agent listings" to other listings was 9:1 when Zillow started separating the two in January. The ratio in some areas is now closer to 100:1, as sellers find it increasingly difficult to sell outside listing agents.
- He adds that what’s happened on Zillow is the "digitalization of a cartel."
What’s next: A federal judge in Seattle recently denied Zillow’s motion to dismiss REX’s antitrust and false advertising claims. But the judge also turned away REX’s injunction to move its listings out of the "other listings" tab.
2. The "blockchain capital you haven't heard of yet"
Illustration: Brendan Lynch/Axios
Tampa Bay has become an unlikely hub for blockchain startups, Axios Tampa Bay's Selene San Felice writes.
The backdrop: Many of them came out of BlockSpaces, a startup led by Tampa blockchain OGs Gabe Higgins and Rosa Shores.
- BlockSpaces opened officially in 2017. Shores calls it "a place that had air conditioning where people could get together and talk about these projects."
What to watch: The most exciting Tampa blockchain startup is Pocket Network, according to Shores, Higgins and Embarc Collective CEO Lakshmi Shenoy.
- The company, which has raised around $10 million in VC funding, allows developers to connect any app, on any blockchain, to any device with a single line of code.
The bottom line: Pocket Network CEO Michael O'Rourke calls Tampa "the blockchain capital you haven't heard of yet."
"I traveled around the world a bunch of times over the last few years. Comparing it with larger cities, I can 100% tell you that the kind of soul here in Tampa is very different and very unique. When people come and visit and experience it, they’re like, 'Holy shit, this is really cool.'"
3. Bike biz boom in Northwest Arkansas
Illustration: Aïda Amer/Axios
The University of Arkansas is launching a business incubator focused on entrepreneurs in the outdoor recreation industry, Axios Northwest Arkansas' Worth Sparkman writes.
The big picture: Northwest Arkansas is subtly experiencing an economic and cultural shift. Or, put another way, it's not just about Walmart anymore.
- Last year, Shane Matson and Kevin Aufdenkamp bought IP and designs for the Put Up bike rack from a business in Colorado and relocated it to Bentonville.
- Matson tells Axios the decision to locate the business in NWA was logical: "It's the mountain biking capital of the world."
- Another convert is Nate Nead, who relocated to NWA from Seattle and launched Bike.co, a bike rental and service startup.
4. Paying for poop in Iowa
Illustration: Shoshana Gordon/Axios
Gas created during wastewater treatment is now making a regional utility in Iowa an estimated $5 million a year, Axios Des Moines' Jason Clayworth writes.
Why it matters: We always knew our $#!+ was worth something. Now it's helping us pay the bills.
The big picture: "Sludge-to-energy" systems are being adopted around the world as technology advances and utilities discover they can reduce pollution and create new revenue, according to research group World Resources Institute.
- Dubuque began selling its wastewater gas in 2018, while Sioux City launched a program last year.
- Des Moines' metro landfill has been capturing gas created from garbage for decades. It's used to generate electricity — enough to power about 5,000 homes.
5. Building in Boulder backyards
Photo courtesy of Studio Shed
Boulder-based Studio Shed — a startup specializing in the design and construction of sleek, single-room structures — says it's seen a 150% surge in sales during the pandemic for backyard office spaces, Axios Denver's Alayna Alvarez writes.
Behind the scenes: With Colorado's housing market prices through the figurative roof, Studio Shed also is seeing a spike in sales for accessory dwelling units, or ADUs, small apartment-like spaces built onto, or on the grounds of, existing single-family homes.
- City officials in Denver are pushing to allow more ADUs to chip away at the affordable housing crisis and promote the structures as a wealth-building tool.
6. 1 fun thing: Where to fill your belly
Illustration: Allie Carl
One of the toughest parts of due diligence trips is finding a decent spot to eat. So we asked Axios Local writers for their top picks:
- Atlanta: Carroll Street Cafe
- Austin: Polvos
- Charlotte: Leah & Louise
- Chicago: Avec
- Columbus: Schmidt's
- Dallas: Pecan Lodge
- D.C.: Tail Up Goat
- Denver: The Wolf's Tailor
- Des Moines: Eatery A
- Nashville: Arnold's Country Kitchen
- Northwest Arkansas: The Hive
- Philadelphia: Kalaya
- Tampa Bay: Bern's Steak House
- Twin Cities: Bar La Grassa
Final Numbers: VC geography

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