Facebook agreed to acquire WhatsApp for $19 billion. Uber raised more than $1 billion at an $18 billion-plus valuation, then reportedly went out to raise even more. Snapchat is rumored to be valued at $10 billion.
This year certainly had more than its fair share of shock value, at least in the startup world. While 2015 may not be able to live up to that, there’s still plenty of startup drama and excitement to look out for.
Uber and a host of other extremely well-funded ride-hailing startups will go head to head to control markets around the world. Messaging apps will keep adding features that assert them as a central hub for entertainment, payments and communication. Food startups are raising tens of millions of dollars to transform the industry.
Meanwhile Facebook, Google and Yahoo — flush with plenty of cash from the recent Alibaba IPO — will continue to prowl for hot startups to expand their businesses.
We’ve rounded up a few notable startups that may become more influential, grow into large businesses, become acquisition targets, go public or simply go bust.
Slack may singlehandedly be making enterprise startups sexy. It develops workplace communication tools and recently received a $1 billion valuation — less than a year after launching.
“It’s not going to be every single person on the planet using this — it’s not going to be Facebook numbers — but it’s an enormous kind of business with tens of millions of people,” Stewart Butterfield, founder of Slack, told me about the market opportunity in an interview shortly after the latest funding announcement.
Slack will certainly face some competition getting there: Just this week, it was reported that Facebook plans to make a similar push into the business space. But the team at Slack is ready to go all the way. Butterfield previously cofounded and sold Flickr to Yahoo — a feat he’s not looking to repeat.
“There’s definitely a strong desire to not be acquired, to remain independent,” he says. “Almost just a recognition that we won’t have an opportunity this big again.”
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Stewart Butterfield, founder of Slack and Flickr
When Twitter finally unveiled its much-rumored Buy button in September, most of the media focused on the social network, but the real force behind the scenes was Stripe. The same was true when Facebook launched its own Buy button.
Stripe was founded by two brothers and launched in 2011 to help businesses process payments online. It now works with big names in tech like Reddit, Lyft and TaskRabbit. It started out 2014 by raising $80 million at a $1.75 billion valuation and ended the year by raising another $70 million at twice that valuation.
“The vast majority of online transactions when we started were processed by this legacy infrastructure of banks and merchants,” Patrick Collison, cofounder and CEO of Stripe, told me in an interview earlier this year after Stripe announced its latest funding round. “We don’t really see anybody else approaching the problem the way that we do and thinking about building the platform of internet commerce.”
The startup is now working to add more business partners and expanding rapidly abroad.
3. Blue Apron
“We’re a new kind of Fresh Direct.”
That’s how Matt Salzberg pitched his company Blue Apron to us in 2012 shortly before it launched. At the time, that sounded ambitious — now it almost seems to be an understatement. Blue Apron mails recipes and ingredients to customers’ homes to take the pain out of cooking. In the two years since it launched, Blue Apron has emerged as one of the leaders in the fast-growing food startup space, which aim to find the kind of success innovating the food industry that Uber found disrupting the taxi industry.
Earlier this year, Blue Apron raised $50 million in funding to boost hiring, marketing and the number of fulfillment centers. Just this month, Blue Apron announced hitting a new milestone: It now delivers more than a million meals a month.
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Image: Blue Apron
Bitcoin has gone through some rocky moments in the last year, but it is still around. Coinbase is betting that Bitcoin — or at least some virtual currency — is here to stay.
Coinbase was founded in 2012 to provide a digital wallet for bitcoin transactions. At the time, founder Brian Armstrong struggled to pitch the service to investors. “I couldn’t explain the whole concept of Bitcoin to someone in a pitch and also get them to invest,” he told Mashable in an earlier interview.
But at the end of 2013, it managed to raise $25 million in funding, making it the top funded Bitcoin startup. Now the startup is reportedly in the process of raising another large round of funding that might value it at about $400 million.
You could almost hear the exasperated sighs of thousands of readers when the report first came out in August that Snapchat may be valued at $10 billion. After all, how could a startup with no revenue be worth five times as much as The New York Times Co.?
Since then, however, we’ve started to get our answer: Snapchat has no shortage of ways to make money. The service experimented with its first ad for a 20-second trailer last month. It just partnered with Square to let users transfer money to friends. And some have speculated it could easily introduce TV-style ads into its live events Our Story feature.
As Aswath Damodaran, a valuation expert and finance professor at New York University, explained to Mashable in an earlier story, it’s all about what you’re comparing it to. If Twitter is worth $30 billion or more, then why wouldn’t Snapchat be worth $10 billion. “Twitter, after all, is not that far ahead of Snapchat.”
This may be the year we see Snapchat play catch up to the bigger social media companies.
Fusion may not be your typical media startup — it is the product of a joint venture between Univision and Disney/ABC. Yet, in the world of journalism, there’s no other media venture with as much buzz at the moment.
The digital and television news service launched last year targeting America’s Latino community, but in recent months Fusion has begun retooling its approach. Fusion has staffed up with a Who’s Who of top journalists: Alexis Madrigal from The Atlantic, Kevin Roose from New York Magazine, Felix Salmon from Reuters and Kashmir Hill from Forbes, just to name a few.
First Look Media poached a bunch of great writers as well, thanks to $250 million in funding from the founder of eBay, but things haven’t exactly gone smoothly. It’s still early days at Fusion. Whatever happens, this will be a media venture to watch in 2015.
7. Magic Leap
A mysterious startup. More than half a billion dollars in funding. Bold but vague statements about how its team of “modern wizards” plans to build something “magical” that changes the world. Magic Leap has it all.
The 3 year-old Florida startup announced raising $542 million in funding in September from Google and other investors to develop augmented reality technology that might just compete with Facebook’s Oculus acquisition.
“Magic Leap is going beyond the current perception of mobile computing, augmented reality, and virtual reality,” Rony Abovitz, president, CEO and founder of Magic Leap, said in a statement when the blockbuster funding round was announced. “We are transcending all three, and will revolutionize the way people communicate, purchase, learn, share and play.”
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An image from the website of Magic Leap, a mysterious startup with more than $500 million in funding.
Image: Magic Leap
Around two years ago, Box began prepping for life as a public company by holding mock earnings calls. At the time, it seemed like the cloud storage company’s IPO would be just around the corner. But that’s not exactly how it played out.
Box filed to go public and raise $250 million in March of this year. Then reports came out that Box was delaying its IPO until the summer due to a downturn in tech stocks. Now the IPO is reportedly delayed until sometime next year.
Until then, Box and its CEO Aaron Levie must manage their costs and private market investors while simultaneously competing against better funded businesses like Dropbox, Google and Microsoft, which are expanding their efforts in the online storage market.
9. Product Hunt
If you’ve found yourself reading about more “silly” apps this year like Yo, you can thank Ryan Hoover and Product Hunt.
Hoover launched Product Hunt a year ago to help users share and discover new mobile and web applications every day. Now the 27 year-old and his site have emerged as influential voices in the tech community, surfacing new products and startups for investors and reporters alike. Last month, Product Hunt raised $6 million in funding from top investors to continue growing the service and its community.
The plan, as Hoover told us in an earlier interview, is to gradually expand beyond the early adopter tech community by creating new sections for subjects like music and fashion. “When we start identifying a big enough group, we’ll expand and create a separate community,” he said.
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Product Hunt has helped apps like Yo gain traction.
Image: Product Hunt
Uber was on our list of startups to watch in 2014 as well. We generally try not to repeat, but the reality is that Uber will be at least as fascinating to watch in 2015 — if not more so.
The company has raised more than $1 billion in funding and is reportedly in the process of raising another billion. It is experimenting with courier services and “corner store” deliveries, moves that analysts believe hint at its greater potential as a full-fledged logistics service. And it continues a heated battle against other well-funded ride-hailing startups as well as the established taxi industry and, of course, regulators.
Yet, perhaps the most fascinating thing to watch with Uber will be how it reforms its internal operations. Uber built up a corporate culture that prized “fierceness,” brash rhetoric and some questionable tactics to fight its way to the top of the taxi heap. Now that it’s a big player, though, those same tactics are earning it greater criticism and run the risk of damaging its perception and traction among customers.
Uber has largely succeeded so far in disrupting a multi-billion dollar industry. Will it succeed in disrupting itself?