Looking at possible avenues for investment or trying to gauge where your own company might fit into the current investment landscape? Read on.
This year has seen a lot of new investment categories. You can read the full list of the 2011 funding rounds at Crunchbase; here we provide you an overview of the startup seed and angel funding activity in the first part of the year, to see which categories are white hot (and which are over-heating).
To keep an even keel, we’ve only included businesses where the funding amount was disclosed (data is for Q1/Q2 2011).
The hottest category overall with over 28 businesses funded in the last year and a total funding amount of $14.2 million. This figure isn’t that alarming when you consider a Facebook valuation – for a rumoured public offering in Q1 2012 – is in the range of US$100 billion.
As small businesses continue to expand the ways they use social media to advertise promotions and connect with customers, investors continue to find social networks a good bet. In fact, JPMorgan Chase started a social media investment fund in February 2011 to raise between $500 and $750 million by investing in companies with solid business models (and existing revenue).
5 different social networks in the travel space received funding:
Tytanium Ideas received funding for Mycampmate, a trip-based, information sharing social network and iPhone app targeted at outdoors and travel enthusiasts. Get Out of Cambridge raised $560,000 for its social travel website, which was started by two Harvard College students as an online extension of their campus ride-sharing board.
Social travel network for business travelers and frequent flyers MilePoint received $1 million and a similar company, Flytivity, was funded as well. Tripping received $1 million in funding for its site, which is a global community for social travel networking.
Several social networks that received funding focused on a specific niche:
Forrst and Hello World communities for developers raised a combined total of $255,000. Hello World changed gears to release Console.fm, a social network for electronica music. Console.fm uses an algorithm to find and categorize electronica music by channel. Users can listen to channels and chat with others. Hello World was one of 24 companies chosen for 500startups’ second incubator program. Endomondo raised $800,000 in a seed funding round at the CTIA Wireless conference in 2011. The social network allows users to earn points for fitness or sports activities and compete with their friends.
Everloop offers a protected space for children age 8-13, who are too young to use Facebook, to connect with friends online. They raised $3.1 million in seed funding in 2011. I Had Cancer raised $750,000 for its social network for cancer patients, survivors, and those supporting friends and family. The site is currently in beta testing.
There were also a number of companies funded for Social networks themed around shopping:
U4EA Networks was funded for its social networking and ecommerce platform The MonkeyBusiness Network. The company also received $5.2 million in Series D funding in 2005 and $16 million in 2007.
Virtualtwo, which allows users to build a virtual wardrobe of clothing they own or would like to own, received seed funding. Yotpo raised $800,000 in seed funding for its consumer-focused opinion aggregation engine with the help of investment firms 2B Angels and PLUS Ventures.
Storenvy raised $1.53 million in seed funding. Storenvy provides sellers with free, easily customizable online stores and lets them communicate with their customers. Founder Jon Crawford funded the company in 2009 and 2010 with profits he earned printing tshirts for storenvy store owners.
Photo and Video Sharing sites
Another popular category for investment, with five companies funded and a total amount of $2.15 million of funding. While this genre does have well-established players like YouTube and Flickr, many of this year’s funded companies so far placed emphasis on integration with social networking. For example, Photocollect lets users invite friends who attended an event to view an album via a site like Facebook, and then those friends can upload their pictures, make comments, and tag other attendees.
Similarly, Jixee will aggregate photos and videos from across various social media accounts, and BlipSnips will offer compatibility with Twitter and Facebook video sharing. Dropico adds a twist with including built-in photo editing and correction options before sharing your finished images with social media destinations, while entrant Suagi, which received $124,000 in angel investment, promises it is “redefining social video” but is otherwise remaining mum on its services for now, most likely to maintain eligibility in selective funding competitions.
Consumer shopping discovery platforms are also heating up with 12 startups funded this year: Copious, Flutterscape, Goshi, EggDrop, Zaarly , Unbooked, CoverHound, OpenChime, Hipster , Scoopola, Bevvy, Inveni have all received funding. The focus continues to be on either a tie to social networking or smartphone apps. Copious received $2 million in seed funding for its marketplace, currently in beta testing, that brings identity authentication into online commerce transactions by “social signals,” such as whether anyone in a buyer’s social network knows the seller or has purchased an item from them before.
Another standout in this category, EggCartel’s mobile phone marketplace EggDrop, which received $1 million in seed money, is a locally-focused classified ad app specifically for smartphone users rather than fighting for the broader web.
Also three B2B marketplaces raised a total of $1.65 million. Two of the companies connect businesses through social networks, and one (Equiprent) connects commercial construction companies with equipment rental companies in their area so contractors can review multiple quotes.
Collaborative consumption is an interesting investment category, with 3 ride and vehicle-sharing startups funded. Group buying saw some action as well, with 4 startups focused on discounted group purchases of commodities like home heating oil (NeighbourOil), food (FoodScrooge) and B2B (Market Sharing).
With the success of Groupon and Living Social, it’s no surprise to see 4 daily deal related web sites with funding totaling $1.85 million as well as 4 other general deal discovery sites. Juiceinthecity raised $6 million to “aggressively continue to push its market leadership position and create thousands of jobs for moms across America,” according to a press release. The website features daily, locally-focused deals for moms and lets users recommend companies to others.
8 startups in the loyalty program space received just over $2.6 million. These companies are changing the face of loyalty programs, exchanging punch cards for mobile phone apps (Getpunchd) or giving businesses a way to reward customers just for visiting their websites (Punchtab).
Shopolot lets businesses send their patrons coupons, promotions or advertisements via a smartphone app. The push in this area, as with others, is toward using technology to make meaningful, local connections.
Several companies have stepped up to deliver cost-cutting services to public schools, which according to The New York Times have had to eliminate an average of 13.7 percent from their budgets since 2007.
In addition, eight separate learning platform startups received funding, most of them trying to improve the way that educational content is delivered. Coursekit (rebranded as Lore in 2012) raised $1 million in seed funding for its reimagined social platform for college students and professors that will include tools like a gradebook, calendar, file management and let participants post links, start discussions, or ask questions all in one place. OPEN allows teachers to upload digital lessons, which students can view from home.
Other businesses are focused on connecting students with one another, such as Rayku, a peer micro-tutoring platform, or NoteWagon, a lecture note exchange that allows college students to buy and sell notes.
The health industry also is ready for some change and 6 startups were funded with software for the health industry and medical records. HealthTap raised $2.35 million for its interactive health product, which is currently in beta testing. HealthTap will allow people to store health information on devices like smartphones or tablets, integrating elements of social media to give doctors and patients a more personal experience.
Mobile app companies are very popular with 20 companies raising a total of $11.96 million in funding. These companies included mobile game companies and mobile location-based check in apps, as well as apps geared toward a niche market. RECAPP received seed funding for its app geared toward sports enthusiasts, and FLUD raised $1 million for its news reader app. A few mobile marketing companies, such as AppRedeem, already used by GroupOn, and the network site MobileApps.com, recieved attention, and investors also gave a total of $500,000 to Torsion Mobile (Torsion Mobile) and Mobicanvas (MobiCanvas), which aim to provide design tools to agencies and companies interested in creating mobile-ready websites.
Q and A
Question and Answer sites are surprisingly popular, with 6 startups given the nod. The companies that received funding each put a new spin on Q-and-A. For example, Piazza received $1.5 million in seed funding from Sequoia Capital, Felicis Ventures, Kapor Capital and SV Angel for its Q-and-A site for students and teachers. Anyone can start a “class” on Piazza, and classmates, teachers, or teachers’ assistants can join the conversation and help resolve questions.
Localmind received funding for its hyper-local Q-and-A engine, which allows users to send a question to someone who’s at a location they’re interested in. For example, a user might ask someone at a popular restaurant how long the wait is right now. When Localmind users check in with a service like Foursquare, they become available to receive questions about that location.
Employment & Hiring
Employment marketplaces weigh in with 5 startups. Gigwalk raised the largest chunk in its category, receiving $1.7 million for its platform to connect businesses with a mobile workforce, ready to complete tasks like photographing a restaurant menu or confirming product placement in a store. Funded companies tend to focus on social networking or mobile applications.
Energy Monitoring is another trending category – 7 companies received funded in this space, including Retroficiency with $800,000 for its energy efficiency platform for commercial property owners or facility management firms, while PlotWatt raised $1 million for its beta-stage site, which uses algorithms to figure the cost of appliance energy for regular consumers and gives them feedback and recommendations.
- ► Content discovery – This includes Limk, Topicmarks, Pinevio, and ContextLogic, which received a total of $1.9 million.
- ► Cloud hosting / platform as a service – The Efficient Cloud and DotCloud received a total of $941,000.
- ► Collaboration tools – Hubkick, Moprise, and Thinkfuse received $1.1 million.
- ► Database technology – ParElastic and MemSQL received $3.6 million.
- ► Facebook ecommerce – Boosket, Novelo, and Vendorshop received $310,000.
- ► Game development companies – Game development companies and specific game titles including MinoMonsters, Simple Lifeforms, Ayeah Games , Matatena Games, GameBuilder Studio, Gamzee, and PlayMob received nearly $2.1 million.
- ► Music discovery and download – Altavoz and Exfm received $775,000.
- ► Payments – Fuze Network, Payfirma, PagoPago, Cloudability, Card.io received nearly $3.7 million.
- ► Web Analytics – Spring Metrics and CANDDi received $798,000.
Of course, many startups received seed or angel funding that simply don’t easily fit neatly into one of these categories. Perhaps these are the best companies to be in, as they see less competition and benefit from providing a product to a niche market.