New York’s tech ecosystem is strengthening dramatically. In fact, after Silicon Valley, no other area has seen more early stage funding flowing to local startups. There have been many successful exits in 2015 as well. Some of the most impactful companies in ad tech, fintech, ed tech and other tech sectors call New York home today. Many of them have big plans for 2016, from listing on public stock exchanges to creating whole new product categories. Here are fifteen New York tech companies, ranging from small to large, to watch in the coming year.
In the fight for online readership, publishers are increasingly using interactive content to improve engagement. Buzzfeed, for example, has increased its use of polls and quizzes. Apester brings this approach to the masses by making its polls and interactive videos available for free. Publishers use Apester’s tools to embed interactive features in their own content or to run native content from Apester’s corporate partners. The publishers and Apester share the revenue from the native content. In the middle of 2015, Apester raised $5 million in Series A funding, some of which will be used to expand its network of corporate partners.
One of the giants of New York ad tech, AppNexus helped pioneer key technologies of digital advertising. One of these was programmatic ad buying, the automated process of using algorithms to buy large amounts of ad space in real time. Now AppNexus serves all parts of the digital ad industry, including publishers, advertisers and other ad tech companies. But beyond its products, the main topic of conversation about AppNexus has long been when it will offer shares to the public. The company, which private investors have valued at more than $1 billion, has been eyeing an IPO for some time. AppNexus sat out the 2015 IPO parade (perhaps because some of its competitors stumbled in public markets the year before), so now tech-focused investors will be asking if 2016 is finally the year.
Taking another approach for boosting engagement, Arkadium develops games that publishers can integrate into their websites and apps. Arkadium offers its games for free and shares the revenue they produce. The company was founded by a married couple, Ken Rosenblatt and Jessica Rovello, in 2001. Having been a part of Buddy Media, I can appreciate the power of a married couple building a successful startup. Arkadium was profitable in its early years, so the founders didn’t raise outside funding until they closed a $5 million Series A round in 2013. Today the company is expanding its product offerings to include polls, quizzes and videos, and has a presence on most mobile platforms.
Taking on Amazon is not for the faint of heart, but that’s what DigitalOcean’s founders have done. The four-year-old company’s cloud hosting is a direct competitor of Amazon’s business services. DigitalOcean’s platform gained popularity among web developers for being easy to use. For a while, it was a bit of a hobbyist’s tool for people launching small sites. But now it has expanded its capacity significantly with the help of more than $170 million of venture and debt financing. Today it is the world’s third biggest hosting company behind Amazon and OVH, a French company.
Techcrunch called DWNLD “the easy-bake oven for apps,” which sums it up pretty well. DWNLD’s software allows anyone to turn a website into a mobile app. There is a free version of the product that gets the app up and running. A more robust version costs $15 per month and allows monetization through ads and content. Users keep 90 percent of the revenue generated and don’t need any knowledge of coding. As a result, DWNLD has significantly lowered the barriers to entry for launching an app. Founded in 2014, DWNLD raised $12 million in a Series A round led by Greylock Partners in September of 2015.
In partnership with top business schools like UC Berkeley’s Haas and MIT’s Sloan, ExecOnline delivers executive training online. The company’s clients are companies that want to invest in their executives’ continuing education but don’t want to send them to on-campus programs that are expensive monetarily and time-wise. Founded in 2012, the company closed a $5 million Series A round last year led by Osage Venture Partners. It used the money to create a new operations course of study with MIT Sloan and to expand internationally, a process which will continue into 2016.
One of the stranger and more compelling stories in New York tech, Foursquare has seen its fortunes rise and fall repeatedly since its founding in 2009. Originally a social app that “gamified” real life, Foursquare let users compete with each other and earn badges by “checking in” to locations they were actually visiting, such as restaurants, stores or airports. It also served to provide location-based recommendations and reviews. In 2014, the company split its popular app’s functionality in two to create a new Foursquare and another app called Swarm. Loyal users were furious and many abandoned the platform. But Foursquare keeps chugging along and it will be interesting to see what 2016 brings. To date, the company has raised more than $160 million in venture funding and claims to have tens of millions of active users. Foursquare’s CRO told GeoMarketing, “We’ve heard this for six years now, that we’re ‘never going to make it.’ But revenue is in triple-digit growth. Business is going great. You kind of just ignore it, because [we believe our users and our clients] know what we’re doing.”
As regulations and compliance costs have increased, it has become harder for banks to make loans to small and medium-sized businesses (SMBs). Some economists and business executives believe these conditions have created a credit gap for SMBs. Fundera exists to provide alternative, non-bank loans to SMBs at competitive rates. The company has created a sleek marketplace where business owners can apply for loans from multiple lenders and price shop in one place. Fundera can be a lifesaver for SMBs because even for a profitable, small business, securing a competitive loan quickly can be the difference between staying afloat and going under. Fundera has originated more than $60 million in business loans. In September 2015, the startup closed an $11.5 million Series B round to fund continuing growth.
Tinder’s cousin, Hinge has the same swipe-and-chat user interface as its number one competitor, but it tries to take some of the anonymity out of the process. On both mobile apps, users view a profile and photos of other users. Then they swipe the profile left or right to indicate interest or lack thereof. If two people express interest in each other, they’re prompted to chat through the app. One difference between the two apps is that Hinge only shows users’ friends of their Facebook friends, so there is always at least a tenuous personal connection. Hinge also limits the number of profiles users can view each day and provides more biographical information. Users and investors have responded well. Hinge has raised $12 million raised in December 2014 to expand internationally.
Even if you have not heard of Kaltura, you have likely viewed videos online powered by the company’s technology. Kaltura is a leading video technology provider, powering the video needs of thousands of enterprises, media companies and schools. Whether an internal campus tube for a university, a video training portal for an enterprise, or a full-service OTT platform for a cable network, Kaltura’s mission is to power any video experience across the web and mobile. With fast, consistent growth since its founding in 2006, Kaltura has had no trouble raising money, netting$116 million in venture funding. There have been rumors that Kaltura may be seeking an IPO – if so, perhaps 2016 will be the year.
A single large company might place thousands of digital ads every day. Buying that much ad space would be impossible even for big marketing teams, so the process is largely automated. The platforms that do the buying are called Demand-Side Platforms (DSPs) and one of the most widely used ones come from MediaMath. Taking on Google’s own DSP, Double Click Bid Manager, MediaMath has achieved astronomical growth, sextupling revenue in the three years through 2014 when sales reached $471 million. With more than $200 million of funding and two acquisitionsto its name, MediaMath is expected to continue on its upward trajectory in 2016.
StartApp is the fastest-growing private company in New York according to Inc., with three-year revenue growth of 22,036 percent and $37 million in 2014 revenue. The mobile advertising platform helps publishers and advertisers monetize, distribute and advertise in apps and on mobile websites. StartApp designs out-of-the-box ad units, such as its recently launched 360-degree ad offering, which utilizes a device’s gyroscope in order to create a panoramic ad experience. StartApp reaches over 350 million users and is embedded in over 150,000 Android and iOS apps. The company recently ranked number one on both the Deloitte Technology Fast 500 list and the Crain’s New York Fast 50 list.
Story2 began as a provider of college application essay workshops. The central tenet of the company’s classes was that writing a great admissions essay can significantly boost your chances of college acceptance. The method worked, but since it relied on in-person teaching it wasn’t easily scalable. In 2014, Story2 went through two accelerators and came out an Internet-based company. Today it teaches its writing process through a step-by-step SaaS platform, to college applicants all over the world looking to craft a great college essay. The great thing about this company is that it doesn’t write essays for students – but rather teaches them how to write great ones themselves.
There are seemingly countless apps that direct users to physical locations in one way or another—Google Maps, Yelp, and Foursquare are just a few. But businesses have done relatively little to capitalize on marketing opportunities from location-based data themselves. Yext proposes that businesses should take “geo-marketing” as seriously as “social marketing” and provides a platform to help them do so. Its Location Management Platform enables businesses to manage their listings across location-related apps, to create location-sensitive pages themselves within their own apps and to interact locally with customers over in-store Bluetooth networks. Investors have flocked to Yext, reportedly pushing its valuation to $525 million. Yext’s CEO has hinted that an IPO is imminent.
Disclosure: I have no personal or financial interest in any of the companies listed above.
Dan Reich is an Electrical Engineer in NYC that has been involved with companies that have collectively raised over $100M in venture capital and have exited for close to $1B in M&A.