If you only focus on the multi-billion dollar valuations of young companies like Pinterest, Uber and Snapchat, you might assume 2013 has been a very good year for tech startups. In reality, it has been more of a bittersweet year.
Many early-stage companies struggled to raise a Series A rounds of funding, a phenomenon commonly referred to as the "Series A Crunch," which for some meant to fight for their survival. Meanwhile, several later-stage companies like Fab and Rdio laid off large portions of their staff to rein in costs.
Even so, plenty of promising startups raised funds and launched (or teased) exciting features this year in markets ranging from mobile payments to media. What's more, the success of Twitter's IPO has boosted investor interest in other social startups and may help revive the market for tech IPOs, which suffered after Facebook's troubled public offering in 2012.
We've rounded up a few notable startups that have the capital, talent or ideas — often all three — to succeed. Some may thrive for years, some may get acquired and some may go nowhere, but all will be worth watching.
Circa launched its iPhone app in late 2012 with the goal of rethinking the breaking news experience for the mobile era. This year, the startup proved that wasn't just an ambitious pitch. Circa poached Reuters' social media editor Anthony De Rosa to serve as editor in chief of a team that now includes 10 reporters. It also launched a new Android app and updates to its iPhone app which make it easier to find and track breaking news stories as they develop.
2. Level Money
It's not every day that a personal finance startup attracts a lot of buzz, but Level Money may be the exception. The San Francisco company was cofounded by Visa's former manager of global emerging products and aims to make it easier for users to budget on the go from their phones. Think Mint, but with a simpler design, boiled down to the essentials and targeted more toward younger users. The startup raised a $5 million round Series A round this year led by Kleiner Perkins, with investments from some big names in the finance industry including former Citigroup CEO Sandy Weill.
If the mark of a good Internet startup is addressing a basic pain point among consumers, then Routehappy is certainly a startup worth watching. Routehappy, which launched its website out of beta in May, relies on a team of data experts to help travelers compare flights not just by price and times, but by seat types, amenities and perks. The startup has since raised $1.5 million in funding and launched a mobile app.
Flipboard has been around for a few years, but in 2013, the startup took three big steps towards achieving its full potential as a curation platform. The company gave users the option to create their own magazines, embraced ecommerce with the introduction of shoppable magazines and added support for Windows 8.1, meaning it is now available on all major mobile operating platforms. These efforts, combined with the additional $50 million it is reportedly close to raising, should help Flipboard continue to grow its user base and ramp up monetization.
A year ago, the concept of e-book subscriptions was just that: a concept. But this year saw the launch of several notable e-book subscription ventures, including an offering from Scribd, the popular document scanning service, and Oyster, a younger startup that raised $3 million in 2012 from Founders Fund.
The two services offer a comparable number of books, but Oyster and its team that includes former Google employees has tried to differentiate itself with a gorgeous user interface like a modified version of Netflix. Both Scribd and Oyster believe that the e-book subscription market could be a multi-billion dollar opportunity just like movie or music subscriptions. If that proves to be even slightly true, expect to see more money and possibly some acquisitions in this space.
Uber has survived regulatory battles and the occasional bad headline to become a fixture in some of the biggest cities in the U.S. and abroad. In August, the ride sharing service announced raising a $258 million funding round led by Google Ventures to help expand into new markets and fight the inevitable legal battles. What makes Uber really worth watching though isn't just its success with the ride sharing model, but the hints from its CEO Travis Kalanick in recent months that the company may expand into other areas like same-day delivery, a hot space right now. In other words, Uber isn't just coming after taxi companies; it's coming after business like Amazon.
It may not be the sexiest startup on this list, but Datasift finds itself in a space that is becoming increasingly high-profile thanks to Twitter's IPO: social data. Apple recently acquired Topsy, a social media analytics company, for more than $200 million. One day later, Datasift announced that it had raised another $42 million in a Series C round, bringing its total funding up to more than $70 million.
Clinkle will either go down as the next big thing in mobile payments or the next big bust, but either way, it will be big. The startup and its 22-year-old founder have raised more than $25 million in June and more big name investors continue to flock to the company. In late September, the company revealed that more than 100,000 people were on the wait list to use the app, even though no one really knows what it does. The app, which is rumored to use a high-frequency sound to process payments, is expected to roll out to more colleges in the coming months. Yet, the company also recently laid off a quarter of its staff, suggesting that there are some problems behind the scenes.
Before Bitcoin started to gain tons of press coverage and approach the $1,000 mark,some of the startups in the space were essentially homegrown operations. But now, some well-known VCs and tech founders are entering the space. Perhaps the most notable is Circle, a company founded by the man behind the Brightcove video platform. Circle raised a $9 million Series A round at the end of October and plans to develop services that make it easier for consumers and merchants to purchase and use digital currencies like Bitcoin. Expect to hear more about Circle in the coming year, assuming Bitcoin sticks around that long.
SmartThings is one of the leading startups in the Internet of Things space. The company provides tools to help users connect their homes to their smartphones, which would potentially shut the garage door remotely and send updates when the heat is on too high or when too much water is under the sink. SmartThings recently raised $12.5 million in Series A funding.
SmartThings: Hello, Smart Home from SmartThings on Vimeo.