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The Next Billion-Dollar Startups

This article is more than 8 years old.

This story appears in the May 3, 2015 issue of Forbes. Subscribe

Massively successful startups have historically been rare. Emerging to the wonder of the business world, companies like Yahoo, Google, Amazon and Facebook seemed such aberrations they became known as unicorns.

But today’s business playing field sports a herd of them—over 80, in fact. Companies such as Dropbox, Uber, Snapchat, WhatsApp and Pinterest have raised vast sums of capital and reached high valuations. But what does the next generation of top startups look like?

Together with TrueBridge Capital Partners,* we went in search of young companies with enough momentum to reach the upper echelon and comprise the next generation of unicorns, and detailed our findings in the latest issue of Forbes Magazine.

We surveyed over 90 VC firms and asked them to nominate their most promising startups, the ones likeliest to reach sky-high valuations. We asked for revenue figures, valuation history, launch dates and customer counts.

We whittled the results down to 35 promising companies and subjected them to our own grading formula, keeping in mind the track records and skills of the founding teams, and chose 25 startups we think have billion-dollar valuations in their futures (indeed, three of these firms hit that milestone in the past month as we toiled to cover them). (See, Unicorn Rush: Three Startups That Beat Forbes' Next To A Billion List)

What we learned was that technology is transforming industries the world over and investors are backing young companies that promise to change the face of e-commerce, food tech, financial services, and the enterprise.

We took a look at some of the trends we’re seeing in the high-value startup space and filed reports on the industries our 25 startups are dismantling, as well as the venture capital firms laying the most bets on hot companies. We also found out why venture-backed companies are taking longer to go public, how that affects valuations, and what venture capitalists are doing in response.

Winners Crushing It

Among some of the top startups we’re taking a closer look at is Tanium, the product of father and son cofounders, became the latest $1 billion startup at the end of March (See, Meet Tanium). David and Orion Hindawi have now received over $140 million from Andreessen Horowitz, the VC firm’s biggest single bet ever, to reinvent cyber security for massive corporations. FORBES’ reporter Brian Solomon took a look at how Tanium’s back-end architecture lets clients like Visa, Amazon, Best Buy and the U.S. Department of Defense view and control every one of their hundreds of thousands of networked computing devices in seconds.

Docker also made the winners circle. In just two years, Docker has become one of the most popular open-source projects in tech, its app containers downloaded more than 300 million times. The big enterprise players are lining up to partner with it from IBM to Microsoft and VMware. And it's just raised $95 million at valuation just under $1 billion from top investors in venture as well as Coatue and Goldman Sachs.

Personal loan startup, Avant (formerly AvantCredit), has been racking up customers by taking the headache out of getting a quick handout. (See,  Loan Star) Revenue grew 971% to $75 million in 2014, and CEO Al Goldstein says Avant can more than triple that this year as it surpasses its 200,000th customer. Its valuation so far? We estimate $875 million.

*TrueBridge Capital, has direct or indirect ownership interests in some of the companies on this list and is not recommending any of the listed companies as potential investment opportunities.

 

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