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These Are the 50 Most Promising Startups You’ve Never Heard Of

This article was sourced from Bloomberg. Article by Ellen Huet.

There are a few early clues that a startup will be successful, according to market researcher Quid: Have the company’s founders worked together before? Is the business in a hot sector, one where many other new startups are also focusing? Has it raised funding at a quick pace? Based on those criteria and others, Quid looked at more than 50,000 companies and chose 50 it deemed the most promising.

While venture capitalists often try to assess startups’ potential one by one—at the moment they hear a pitch—some market researchers such as Quid are trying to crunch data on tens of thousands of startups to come up with their own set of best bets. This isn’t Quid’s first attempt to do this: In 2009, Businessweek asked Quid, then named YouNoodle, to pull together a list of 50 promising startups that were flying under the radar. Almost eight years later, it turns out that the list had its share of flops—companies that shut down or lost value—but some notable home runs as well. Cloudera, Palantir, Evernote, Twitch and Spotify all increased at least 30 times in value since 2009. If YouNoodle’s list had been a venture portfolio, it would have been one of the best-performing funds of the last two decades. So we asked Quid’s chief executive officer, Bob Goodson, to make a new list.

The companies, all founded in the past six years, have been raising money at an impressive clip—typically once every nine months, suggesting heavy interest among investors. The average business had already raised three rounds.

271
Average days between rounds
3.42
Average number of rounds

Investors had a particular interest in certain emerging sectors. Online security, fraud detection and artificial intelligence startups raised more than others on Quid’s list.

Top Sectors by Capital Raised

Online Security & Fraud Detection
$273.6M
Artificial Intelligence
$145.8M
Autonomous Driving; Image Recognition & Mapping Technologies
$134.5M
Augmented Reality
$110.8M
Smart Sensors
$97.9M
Drones
$84.7M
Digitization of Education
$83.4M

Which investors will benefit if these businesses do in fact expand to become the next Spotify or Palantir? These are the venture firms that have taken stakes in the most number of companies on the list of 50:

VC firms investing in multiple startups on the list

6

startups
  • Andreessen Horowitz
  • Sequoia Capital

4

startups
  • Felicis Ventures
  • First Round Capital
  • Y Combinator
  • TechStars

3

startups
  • Kleiner Perkins
  • Founder Collective
  • TriplePoint
  • Shasta Ventures

Here’s the full, sortable list of the 50 most promising startups from around the world, based on Quid’s research.

Company Name

Headquarters

Market Sector

Capital Raised
Over time

Average Number of Days Between Rounds

Accion Systems
Boston
Space Technology
Satellite propulsion
$9.5M
492
Airware
Newport Beach, Calif.
Drones
Commercial drones
$75.3M
204
Astro
New York
Smart Home
Speaker light bulbs
$5.5M
257
AYR
New York
Fashion
Bonobo spin off for women
$6.2M
98
BlueLine Grid
New York
Online Security & Fraud Detection
Securing mobile usage for govt
$6.0M
251
Clark Germany
Berlin
FinTech
Digital insurance
$15.9M
136
Cognotion
New York
Digitization of Education
$4.4M
127
Deako
Seattle
Smart Home
Smart lighting
$4.7M
134
Deep Space Industries
Moffett Field, Calif.
Space Technology
Space mining
$5.5M
146
Dispelix Oy
Espoo, Finland
Augmented Reality
AR optics
$1.9M
N/A
Distil
Arlington, Va.
Online Security & Fraud Detection
Cloud security
$55.8M
270
Doppler Labs
Provo, Utah
Smart Sensors
Smart earbuds
$58.0M
202
Eccrine Systems
Cincinnati
Smart Sensors
Sweat analysis – DoD applications
$8.9M
476
Edyn (Soil IQ)
Oakland, Calif.
Smart Home
Smart garden
$3.8M
228
EyeVerify
Kansas City, Mo.
Smart Sensors
Eye authentication (Wells Fargo and Sprint)
$6.0M
312
Focus FS
London
FinTech
Digital banking
$17.6M
180
Folloze
Palo Alto, Calif.
Artificial Intelligence
Sales and marketing integration
$16.2M
307
Geoblink
Madrid
Artificial Intelligence
Geospatial business intelligence
$1.5M
160
GrayMeta
Agoura Hills, Calif.
Artificial Intelligence
Enterprise search
$8.9M
244
Instamotor
San Francisco
Mobile Retail
Second hand car sales
$9.5M
298
Kahuna
Palo Alto, Calif.
Artificial Intelligence
A.I. in multi-platform marketing
$58.3M
382
LEIA
Menlo Park, Calif.
Smart Sensors
Holograms from smartphones
$25.0M
N/A
Loop Labs
Denver
Smart Home
Smart home sensor
$8.9M
97
Mad Street Den
San Francisco and Chennai, India
Artificial Intelligence
AI for fashion
*$1.5M
579
Mapillary
Malmö, Sweden
Image Recognition & Mapping Technologies
Crowdsouring street-level view maps
$9.5M
430
Mast Mobile
New York
Telecomms
Connects mobile phones to corporate network
$7.0M
196
Meta Company
Redwood City, Calif.
Augmented Reality
Augmented reality platform
$99.0M
336
Mihup Communications
Kolkata, India
Artificial Intelligence
AI digital assistant
$6.7M
N/A
Mobvoi
Shanghai, China
Artificial Intelligence
Chinese voice recognition/AI
$31.6M
341
Naritiv
Los Angeles
Mobile Retail
Snapchat marketing
$7.1M
654
Navisens
San Francisco
Augmented Reality
Location awareness without GPS or Wifi (for AR)
$2.7M
385
NewStore
Boston
Mobile Retail
Mobile retail platform / fashion
*$51.5M
111
OB1 Company
Fairfax, Va.
FinTech
Bitcoin marketplaces
$3.3M
424
Omada Health
San Francisco
Digital Health
Chronic disease prevention programs
$77.0M
324
Omapal Technologies
Mumbai, India
Fashion
Fashion rental platform
$6.9M
56
Paracosm
Gainesville, Fla.
Augmented Reality
3D in construction
$7.2M
253
PreNav
San Carlos, Calif.
Drones
Drones for infrascructure inspection
$5.5M
144
Quanergy Systems
Sunnyvale, Calif.
Autonomous Driving; Image Recognition & Mapping Technologies
Autonomous driving
$134.5M
167
Remind
San Francisco
Digitization of Education
$59.5M
316
Rulai
Sunnyvale, Calif.
Artificial Intelligence
AI bots, Valley and China
$6.9M
145
SafeBreach
Tel Aviv, Israel
Online Security & Fraud Detection
Predictive analytics for cybersecurity
$19.0M
134
Shape Security
Mountain View, Calif.
Online Security & Fraud Detection
Cyber security
$91.0M
458
Signifyd
San Jose, Calif.
Online Security & Fraud Detection
E-commerce fraud
$50.4M
457
SlantRange
San Diego
Drones
Drones for agriculture
$9.4M
262
Soar
Mountain View, Calif.
Digitization of Education
Educational game Blue Apprentice
$6.5M
221
Socratic
New York
Digitization of Education
$7.5M
588
Treasure Data
Mountain View, Calif.
Cloud
Cloud data management
$56.4M
249
Troops
New York
Artificial Intelligence
Slackbot for sales teams
$9.6M
127
Wickr
San Francisco
Online Security & Fraud Detection
Mobile encryption
$51.4M
299
Zodiac
Philadelphia
Artificial Intelligence
Predictive analytics on customer lifecycle
$4.5M
91

Methodology

Quid began with a list of around 50,000 private companies that had received venture capital or venture debt in the past three years. The data on investment received, investors, location and founding year came from S&P Capital IQ and are current as of September 2016. Quid narrowed the list down to around 5,000 companies by keeping those that fell into one of three categories: 1) early-stage startups with low valuations that raised money quickly from a set of top venture capital firms; 2) higher-valuation companies that already showed traction in their industry; and 3) companies that were in a sector that Quid determined was an expanding market opportunity. Quid found these market opportunity areas by analyzing the company descriptions of startups and finding what sectors were most popular among companies founded in 2015 and 2016, plus which sectors raised the most money from the top five venture capital firms. (The list of top venture capital firms comes from a top fund-of-funds that declined to be named for compliance reasons.)

Quid narrowed the list from 5,000 to 200 by ranking the companies according to a series of metrics: time between funding rounds, number of rounds, quality of investors and amount raised. The list was then narrowed to 50 by looking at such other metrics as whether the founders had worked together before (considered a plus), where the founding team had gone to school and how many employees the company had. Quid’s Goodson also made subjective decisions about which companies seemed most promising, just as he did with the 2009 list. Goodson also excluded companies that had had extensive press coverage already. Quid declined to disclose numeric scores or exact formulas that it used to rank companies in the final stages.

The final list was shaped by some preset parameters: Biotech was excluded, and 10 of the companies were from outside the U.S. Note: One company, EyeVerify, was acquired in September, around the time the list was being made. Otherwise, all companies are independent.

Added on March 6: Since this story’s publication, a few companies (noted with an asterisk in the table above) have contacted us to amend funding details or to disclose the size of previously undisclosed rounds. Mad Street Den said its August 2016 funding round was more than $4 million, bringing its total to more than $5.5 million. NewStore said it raised $8.7 million in February 2015, $30 million in July 2015 and $1.7 million in January 2016, bringing its total to $40.4 million. In addition, we updated this story with Soil IQ’s more commonly known company name of Edyn, and we’ve amended the company name of Mad Street Den Systems, which was renamed Mad Street Den, and Vespr, which was renamed Socratic. Lastly, we added another office location for Mad Street Den, which is now headquartered in San Francisco but was previously headquartered in Chennai, where it still has a larger office.

Source: Capital IQ, various databases, all via Quid

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