Venture-backed companies are usually startups that have private equity-based financing from investors. These investors are known as venture capitalists and can include public and private corporations, and individuals. The venture capitalists can take up to 25% to 50% of a startup’s ownership. Venture capitalists are not hobbyists but professionals who provide capital assistance, guidance and support to startups.
Venture capitalists are experts at forecasting growth and evaluating potential of companies. But not all their investments are fruitful. As a rule of thumb, out of 10 startups, only one or two return profits on investments. The other three to four fail and the rest just manage to reach break-even levels. One of the examples of a successful return on investment is Sequoia Capital’s $60 million investment in WhatsApp which got converted into $3 billion when Facebook Inc. (NASDAQ: FB) acquired WhatsApp for $22 billion. Some other notable successful companies that were backed by VCs include Airbnb Inc (NASDAQ:ABNB), DoorDash Inc (NYSE:DASH) and Robinhood Markets Inc (NASDAQ:HOOD).
In the year 2020, when businesses saw a downward trend due to COVID-19, venture funding saw an annual increase of 4% with total funding amounting to $300 billion. This growth is attributed to an increase in the use of technology-based online solutions for work, health, education, finance, and shopping.
Photo by Olivier Bergeron on Unsplash
14. One97 Communications
Valuation: $16 billion
One97 Communications is based in India and operates in the fintech industry. One97 Communications offers financial services through its platform Paytm. Paytm allows e-commerce sellers to use semi-closed wallets for accepting payments. Some of the major investors in One97 Communications are Intel Capital, Sapphire Ventures, and Alibaba Group. Founded in 2000, One97 Communications has raised $4.73 billion. One97 Communications earned a revenue of $380 million in 2020.
13. BYJU’S
Valuation: $18 billion
BYJU’S is an Indian startup with operations in the Ed-tech industry. BYJU’S offers a K-12 learning application that allows students to learn for classes 4 to 12 and prepare for competitive exams like JEE, NEET, CAT, GRE, GMAT, and IAS. Since its inception in 2015, BYJU’S has raised $3.62 billion. The investor count of BYJU’S is 41, with major investments from Tencent Holdings Limited (HKSE: 0700. H.K.), Lightspeed India Partners, and Sequoia Capital India. BYJU’S earned a revenue of $800 million in 2021.
12. Fanatics
Valuation: $27 billion
Fanatics is based in the U.S. and works in the e-commerce and direct-to-consumer industry. Fanatics offers merchandising, marketing, fulfillment, and e-commerce services to professional sports leagues, collegiate teams, conferences, and other major sports events. Fanatics works with its own collection of merchandise on its e-commerce store and customized ordering service on its B2B website. The major venture capitalists investing in Fanatics include SoftBank Group Corp. (OTC: SFTBY), Andreessen Horowitz, and Temasek Holdings. Fanatics earned a revenue of $2.6 billion in 2020.
11. FTX
Valuation: $25 billion
FTX, a Hong-Kong based company, operates in the Fintech industry. FTX is a cryptocurrency exchange providing traders a platform to trade online. FTX also offers derivatives, options, and tokenized stocks. FTX has an investor count of 31 with major investors like Sequoia Capital, Thoma Bravo, and SoftBank Group Corp..
10. Chime
Valuation: $25 billion
Chime is based in San Francisco and operates in the fintech industry. Chime offers a mobile banking app that is aimed to reduce banking fees and automate savings. As of September 2021, Chime has raised more than $2.44 billion since its inception in 2013. Chime has an investor count of 24 with major investors like Forerunner Ventures, Crosslink Capital, and Homebrew.
9. Epic Games
Valuation: $32 billion
Epic Games is based in North Carolina and works in the Software/Gaming industry by developing video games. Some of the well-known games by Epic Games include the Gears of War series. The Unreal Engine technology of Epic Games is also very popular. Since its foundation in 1991, Epic Games has raised $4.375 billion from major capitalists like Tencent Holdings Limited (HKSE: 0700. H.K.), KKR, and Smash Ventures.
However, gaming companies and tech stocks like Airbnb Inc, DoorDash Inc and Robinhood Markets Inc are feeling the brunt of the slowing economic activity amid recession fears.
8. Nubank
Valuation: $45billion
Nubank operates in the fintech industry and is based in Sao Paulo, Brazil. Nubank offers a no-fee credit card to the Brazilian market. The card is managed through Nubank mobile application. The company has raised over $2.547 billion in investments since its incorporation in 2014. The total investor count of Nubank is 28, with major VCs like Sequoia Capital, Redpoint E.Ventures Management, LLC., and Kaszek Ventures.
7. Revolut
Valuation: $33 billion
Revolut is based in London and operates in Mobile Software & Payments industry. Founded in 2015, the company has raised over $1.716 billion in venture investments. Revolut aims to remove the hidden banking costs by providing money exchange services at interbank rates, multi-currency cards, and money transfers using the social network. Revolut has over 30 investors, including major venture capitalists like Index Ventures, DST Global, and Ribbit Capital.
Venture capital activity has slowed down in 2022 amid recession fears and broader rotation away from growth stocks like Airbnb Inc, DoorDash Inc and Robinhood Markets Inc.
6. Databricks
Valuation: $22 billion
Data Bricks is based in San Francisco and provides Data and Document Management services. Since its inception in 2013, Databricks has raised $3.497 billion, as of September 2021. Databricks offers a data platform for simplification of data integration and allows data analytics services. Databrick has over 29 investors with major names, including Andreessen Horowitz, New Enterprise Associates, and Battery Ventures.
5. Instacart
Valuation: $24 billion
Instacart is based in San Francisco and operates in the supply chain, logistics, and delivery industry. Instacart allows users to shop for groceries from their phones using Instacart mobile application. Instacart manages the delivery of groceries from stores to consumers. Instacart uses personal shoppers to buy and deliver groceries from stores to consumers. Instacart has over 39 investors with major VC including Khosla Ventures, Kleiner Perkins, and Caufield & Byers.
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4. Klarna
Valuation: $6.7 billion
Klarna is based in Stockholm and operates in the Internet Software and Payments industry by providing safe payment solutions to online merchants. The core idea of Klara is to provide buyers with the options of an after-delivery payment gateway. The buyers only pay after they receive the goods. Thus, Klarna bears all the risk and credit for e-stores. Klarna has an investor count of 53, with major investors including Institutional Venture Partners, General Atlantic, and Sequoia Capital.
3. SpaceX
Valuation: $125 billion
SpaceX is headquartered in California and specializes in Aerospace and Defense segments. Founded in 2002, SpaceX works in the aerospace industry by designing, manufacturing, and launching rockets and spacecraft. SpaceX is also involved in satellite communication and provides worldwide broadband internet through Starlink. The major venture capitalists in SpaceX are Founders Fund, Draper Fisher, Steve Jurvetson, and Rothenberg Ventures.
2. Stripe
Valuation: $95 billion
Stripe, a San Francisco-based company, was founded in 2010. Stripe operates in the Financial Services and Payment industry. Stripe provides an economic infrastructure for payments. The service allows online merchants and sellers to integrate Stripe’s platform for online receiving of payments through credit cards. Stripe has raised $2.901 billion until September 2021. Stripe has an investor count of 39, with major venture capitalists like Khosla Ventures Acquisition Co. (NASDAQ: KVSA), Lowercase Capital, and CapitalG.
1. ByteDance
Valuation: $300 billion
ByteDance is based in Beijing, China, and operates in the Artificial Intelligence industry. ByteDance provides content-sharing platforms for content creators to share their content. TikTok, founded in 2006, is the biggest service of ByteDance, which is accessible all over the world and has more than 1 billion downloads on the Google Play Store. Other products include Vigo, Toutiao, TopBuzz, and more. This company is backed by venture capitalists like Sequoia Capital China, SIG Asia Investments, Sina Weibo Corporation(NASDAQ: W.B.), and SoftBank Group Corp..
Photo by Olivier Bergeron on Unsplash
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