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3 Major Industries And Their Next-Gen Disruptors (2019)

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As in prior years, the companies on the 2019 Next Billion Dollar Startups list demonstrate that there are no limits to the industries technology can infiltrate.

The sectors represented by this year’s list are diverse, including logistics and transportation, blockchain, fintech, open source cloud software, and healthcare/biotech. But while the industries are far-reaching, the majority of companies can still be funneled into three key industries: consumer products and technology, enterprise software, and security.

Here are the next-gen companies aiming to transform these three far-reaching industries.

TrueBridge Capital Partners

Consumer Products & Technology

Three of this year’s Next Billion Dollar consumer companies are retailers with their own unique twist.

Subscription service company Grove Collaborative sells natural household, personal care, and other products directly to consumers. The company was co-founded in 2014 by Stuart Landesberg, a former associate of TPG Capital who worked regularly with retail brands as an investor and saw the need for a company that prompted customers to buy items they tend to keep in stock (for example, dish soap, pet food, and deodorant). Like many retailers, Grove Collaborative aims to differentiate itself from Amazon through its niche focus, but it still faces competition against similar e-commerce companies like the Honest Company and Brandless.

Rothy’s checks all the boxes of a modern retailer – it’s become a social media phenomenon, has a rabid fan base, and is focused on sustainability. It also has the benefit of a founding team with a Wall Street background and a handy $35 million investment from Goldman Sachs. The company sells flats and shoes for women that are made from recycled plastic bottles through a process that the founders took four years to perfect. While many copy-cat products have emerged, the company is betting on its loyal fan base and word-of-mouth to keep its growth swift.

Nicknamed the Amazon for local retailers, Faire’s goal is to transform the antiquated wholesale retail model and how retailers find and create relationships with new brands. Faire offers an online marketplace where artisans can sell their products with help from the Faire team in uploading their product images, descriptions, and pricing information. Retailers can then browse and purchase local artisanal goods wholesale for their stores. Co-founder Max Rhodes, a former executive at Square, was inspired to start the company after he tried to bring Blunt Umbrella, an artisan umbrella he bought in New Zealand, to stores in the United States.

Two other consumer companies on this year’s list are capitalizing on the continued growth of streaming services.

Streaming platform FuboTV was founded in 2015 as a service for die-hard soccer fans. Since then, the company has maintained its niche focus on live sports, which differentiates it from the crowd of streaming services. But through a series of smart partnerships with media players like NBC, Bravo, and (recently) Discovery TV, it now offers an array of media and entertainment content to appeal to a broader audience, in addition to sports fans.

In 2013, artist and musician Jack Conte spent hundreds of hours building an exact replica of Star Wars’ Millennium Falcon, with the goal of shooting a music video with his band inside of it. When the project was finally complete, Conte and his band published their music video on YouTube. But with advertising revenue not nearly enough to cover the costs of the project, they provided a link to a website where viewers could donate money to the band. Thus the idea for Patreon was born. Today, Patreon provides the business infrastructure to support 100,000 online independent creators like Conte, allowing them to manage the patrons who pay to support them and earn a sustainable income.

Finally, language-learning platform Duolingo joins the list seven years after its founding by Luis von Ahn. Von Ahn, who immigrated to the U.S. from Guatemala, saw how many Guatemalans lacked access to quality education and was inspired to make a platform where people could learn for free. Duolingo takes a lighthearted and gamified approach to learning and is fueled by volunteers who are passionate about language-learning. The company has employed creative monetization strategies, including offering sponsored content and English language certifications that are significantly more affordable than traditional certifications.

Enterprise Software

As we highlighted in a previous blog post, the consumerization of enterprise software has been a long-standing trend. As workers use increasingly more software tools to get work done, they want and expect these tools to be as simple and enjoyable as the software they use in their personal lives. Several companies on this year’s list are representative of that trend.

Front is an efficient email inbox that allows teams to organize workplace conversations in one place and route information to the right people. Recognizing that work has become more complex as simple tasks have become automated, Front aims to make it easier for teams to collaborate, have shared visibility into tasks, exchange drafts, and discuss internally. Last fall, the company launched a major redesign that included a facelift of its software and the introduction of helpful new features, like the ability to create conversation threads, assign personal emails to coworkers, and create more flexible filtering rules.

Lattice, founded by Jack Altman (the brother of venture capitalist and entrepreneur Sam Altman), takes a modern approach to corporate goal-setting. The company makes it easy for employees and their managers to work together on their goals, including completing engagement surveys and performance reviews, sharing feedback, and arranging one-on-one meetings. Altman was motivated to found Lattice after directly experiencing the pain points of creating a successful and scalable workplace culture at Teespring, where he and his co-founder Eric Koslow helped grow the company from 200 to 400 employees in just two years.

Figma is a freemium cloud version of traditional design tools like Adobe and InVision. The company allows users to work solo or in collaboration with teams on UI and UX designs, prototypes, graphic designs, and website wireframes. The company has grown quickly since its founding in 2012, as more enterprises have recognized the importance of design to tech products. For example, as Figma co-founder and CEO Dylan Field wrote in TechCrunch, in 2012 IBM employed just one designer for every 72 engineers; today, it employs eight engineers to every designer.

Lastly, Utah-based Divvy is a software platform that simplifies the traditionally laborious process of managing business expenses. Founder Blake Murray first wrote out his concept for an easy-to-use business expense and budgeting platform on a napkin; three years later, that idea has turned into a rapidly growing business. Divvy’s expense tools are completely free to users, as the company generates revenue from transaction fees paid by merchants. The company faces competition from incumbents like Concur and Expensify. However, Divvy argues that its user-friendly platform, mobile app, and corporate credit card offering are key differentiators, and that it provides customers with real-time visibility into spending that other software cannot provide.

Security

The use of more software tools in the enterprise creates new risks and vulnerabilities. Two Next Billion Dollar startups are focused on securing the enterprise in this challenging new environment.

Contrast Security was formed to help companies address the vulnerabilities that are exposed in the application code of software apps that they buy or build themselves. Contrast’s platform automatically detects and fixes vulnerabilities and defends against targeted attacks, without requiring customers to conduct a scan or schedule an assessment. The company was recently recognized by Gartner’s Magic Quadrant for its ability to empower developers to weave security into their code.

Proxy is another company that is addressing security challenges that arise from the proliferation of technology and devices in the workplace, but in a different way than Contrast Security. Dubbed the Card Key killer, Proxy allows workers to simply walk up to an internet-enabled device and access it securely without signing in. The Proxy app doesn’t create yet another device to access all devices; instead, it simply offers an app that turns smartphones into a smart device.

Like Proxy, Verkada offers tools that enable smarter and secure use of devices. Verkada combines software and hardware to create a cloud-connected enterprise security system for any organization in need of physical security, whether it’s a school, municipality, or corporation. Verkada’s all-in-one cameras have a sophisticated and durable design, and its software enables customers to stream video feeds over the cloud. The company believes that its high-quality feeds, easy-to-use streaming dashboard, and advanced cameras distinguish it from established competitors like Tyco and Honeywell.

The last security-focused company on this year’s list is Cybereason, a startup with deep roots in the military. Many of Cybereason’s employees, including co-founder/CEO Lior Div, served in the Israel Defense Forces’ Unit 8200, the cybersecurity and intelligence division that – as TrueBridge previously profiled on our blog – is well known for churning out dozens of entrepreneurs. Cybereason specializes in an area of cybersecurity software called endpoint detection and response (EDR). But unlike most EDR software, Cybereason takes advantage of cyberattacks by finding where hackers are vulnerable and instantly telling customers when they’re under attack, the impact of the attack, and how to immediately stop it.

Other Represented Industries

Logistics & TransportationFourKites is a predictive supply chain platform that allows users to see where trucks are traveling in real time and quickly address problems; NEXT Trucking is an online marketplace linking shippers and carriers, which aims to resolve imbalances between shippers’ needs and drivers’ availability; RigUp is an on-demand network and services marketplace for oilfield jobs, contractors, and companies, with a goal of becoming the largest workforce provider in the oil industry

BlockchainChainalysis is a blockchain analysis and intelligence firm that helps law enforcement, regulators, and businesses (including banks) track flows of cryptocurrency to spot illicit activity and ensure compliance with federal laws

FintechDave aims to make financial products more approachable and service 99% of Americans (not just the wealthiest 1%), first by solving simple pain points through overdraft protection and automated budgeting; Remitly takes the pain out of international money transfers by allowing users to choose how and when to send money, with beneficial exchange rates and low fees

Open Source CloudKong allows companies to connect their microservices and APIs with a scalable and flexible API platform; Redis Labs offers managed cloud services and gives businesses a choice between hosting on public clouds and their private clouds; SignalFX provides real-time cloud monitoring for a company’s infrastructure, microservices, and applications

Healthcare/BiotechSynthego provides synthetic RNA solutions for CRISPR genome engineering; Truepill is the AWS for pharmacies, delivering pills to patients’ doorsteps