To identify the most promising start-ups in London Informilo asked some of the most active investors to nominate and evaluate companies outside their own portfolios. Some are well-known, others are below the radar but unlikely to stay that way for long. The list includes financial services start-ups such as Wonga, Transferwise and Gocardless, gaming companies like King.com, Mind Candy and Space Ape Games , e-commerce companies like JustEat and Farfetch, music companies such as Spotify and Songkick and B2B software companies like Alfresco, Huddle and Datasift. Click on to see our picks for the top 25.
What it does:Digital, real-time short-term loans for consumers and businesses.
Why it’s hot: Wonga’s technology platform allows it to make swift credit decisions, yet maintain positive cash flow with very tight lending restrictions (in 2011 revenue exceeded £73 million and profits were £16.6 million). Recently named the number one company in the Sunday Times Tech Track 100. Allegedly considering a stock market float in the US as early as next year which could value the company above £1 billion. Expanding beyond the UK now, first to Canada and South Africa, and soon to other locations.
What it does:Online takeaway ordering service.
Why it’s hot: Active on four continents with more than 20,000 restaurants on its network; used by millions of takeaway customers every month. Raised $64 million from private equity group Vitruvian Partners and other investors in May to support acquisitions of smaller rivals, Europe’s largest e-commerce fundraise for 2012. Claims that less than 10% of all takeaway orders in the world take place online, so there is still plenty of growth out there. 2011 revenues: roughly £35 million, up from £5.6 million in 2008.
What it does: Links licensed cab drivers with would-be passengers via smartphone apps.
Why it’s hot: An app that links licensed cab drivers – starting in London, but now also offering the service in New York, Dublin, Boston, Toronto and Chicago – with passengers via the two main smartphone platforms, iOS and Android, is set to become a must-have for denizens of those cities. In late December Hailo reportedly raised an additional $30 million in funding, on top of earlier investment of $17 million; the latest round values the company at $140 million. The business is solidly backed for further development as it moves to take on Uber in the U.S.
What it does:Creator of Moshi Monsters, an online world for kids.
Why it’s hot: Founded in 2004 by Michael Acton Smith, a UK-based entrepreneur who previously founded Firebox.com. Over 65 million kids have joined the site online and Moshi is now expanding successfully offline into books, magazines, trading cards, toys, videos games, music, mobile apps, and cartoons. Moshi Magazine launched in February 2011 and is now the largest UK kids title in the UK. In March the company signed a major partnership deal with Sony Music.
What it does:Open-source enterprise content management platform.
Why it’s hot: Claims to be the second-largest open-source player in the market, after Red Hat, with more than 2,600 paying customers in 180 different countries. 2011 revenues were just under $100 million in revenues, and the company is considering an IPO in 2014 (if not before). It raised $20 million in venture funding from Accel, Mayfield and SAP Ventures in 2008. Recently launched The Alfresco Cloud, which hopes to take some market share from Dropbox and Box.net. Alfresco was founded by Documentum Co-founder John Newton and former COO of Business Objects John Powell.
What it does:Free online games.
Why it’s hot: King.com offers over 150 exclusive games in 14 languages through its website, mobile devices, Google+, and Facebook, where it is a top 10 Facebook developer, and the second most popular game provider, with more than 11 million daily active users. Overall, its games are played by 40 million players more than 3 billion times each month. Planning an IPO on Nasdaq next year.
What it does: Discovery service for music, TV shows, and ads.
Why it’s hot: Bar-goers have since 2002 been holding their handsets up to speakers so the Shazam app can identify the music they’re listening to. Since then it has morphed into a powerful marketing tool: the user can now not only identify the music in, say, an ad, but also buy the goods featured in the ad, concert tickets, the track itself, etc. It boasts 275 million users in more than 200 countries and 33 languages, adds two million new users a week, and claims to have identified more than five billion songs. Now it is expanding onto second screens, making TV ads “Shazamable,” allowing its large user base to buy not just music but all sorts of merchandise connected with programming.
What it does: Farfetch.com unites independent boutiques around the world with fashion lovers.
Why it’s hot: Farfetch offers shoppers more than 82,000 items from 2,000 fashion labels for both women and men. The site sees 3.8 million+ visitors from 200 countries each month; it has 130,000 customers. Founded in 2008, in 2012 the company raised $18 million in funding from Index Ventures, eVenture Capital Partners and existing investor Advent Venture Partners, bringing total funding to $24 million.
What it does: Streaming music service with close social media interactivity and mobile apps.
Why it’s hot: Allows users to stream music from the big music players and smaller independent labels using either a free, ad-supported service or a premium ad-free service. Now requires a Facebook account, so has enormous potential reach; recently declared itself a “platform,” encouraging developers to write apps for it. Users can share playlists, driving social crowdsourcing for events big and small; premium users can also access and share music on most mobile devices. Currently available in 17 countries and has more than 20 million active users, and over 5 million paying subscribers.
What it does:Social network “for meeting new people.”
Why it’s hot: Has 713 million members in 180 countries; more than 100,000 new members join every day. Currently available in 40 languages via Badoo.com and various social/mobile platforms as an iPhone, Android, Facebook & desktop application. More than 5 million adults visit Badoo daily and millions more come more often, each spending well above average time on the site. It is rumored to be considering an IPO on Nasdaq.
What it does: Video distribution and monetization services.
Why it’s hot: Rightster helps content producers, publishers and advertisers realize the value of their rights-held video. The company delivers more than 150 million YouTube views per month and works with high-profile publishers including ITN, the Guardian, SNTV, IMG Fashion and British Fashion Council. In February Rightster acquired Preview Networks, the leading international provider of digital distribution services for the movie industry. The deal makes Rightster the leading distributor of movie trailers in Europe.
What it does: Smart home monitoring provider.
Why it’s hot: Developed in Cambridge, AlertMe’s Smart Home platform enables consumers to take control not only of their energy use, but also a myriad of devices and applications in the home. Sales grew 169% a year from £390,000 in 2008 to £7.6 million in 2011. Strategy Analytics forecasts that Western Europe will be a leader in Smart Home services, with a predicted 23 million smart systems in homes by 2015 and 46 million by 2020. The market for Western Europe is expected to generate over $10 billion in revenues by 2017, giving AlertMe ample space to scale up.
What it does:Cloud-based email management, including archiving, continuity and security.
Why it’s hot: The company has over 6,000 customers globally – including 70% of the UK’s top 100 law firms – and over 1.5 million users worldwide. Sales grew 66% a year from £6.8 million in 2009 to £31 million in 2012. Mimecast has featured on the Fast Track 100 list for three years running. Received a £62 million investment from Insight Venture Partners in September 2012.
What it does: Healthy snacks by post throughout the UK.
Why it’s hot: Started four years ago by seven friends, including Lovefilm co-founder Graham Bosher, the company has sales of close to £20 million per year, to 100,000 customers. Investors including Octopus Investments, and angels such as Saul and Robin Klein, and William Reeve, another LoveFilm founder; in December Carlyle and DFJ Esprit also invested an undisclosed sum (which in August had been rumored to be close to £50 million).
What it does:Enterprise cloud collaboration and content management.
Why it’s hot: Customers include Fortune 500 companies and government, financial services, professional services and manufacturing organization. The company is using its recent $24 million Series C round of funding to form strategic partnerships and expand global operations, with the number of employees expected to exceed 200. In September Huddle reported sales have growth 800% “year on year”; CEO Alistair Mitchell expects Huddle to be a billion dollar business in three years; there’s also talk of an IPO. 2011 revenues: approximately £80 million.
Reading, UK (& San Francisco, U.S.)
What it does: Filtering and data mining software that targets social media.
Why it’s hot: Datasift enables companies to track and filter trending topics, sentiment and geolocation data from Twitter, for a variety of business uses. Last year it raised €4.7 million funding from IA Ventures and GRP Partners, bringing the total raised to $15 million. It also has data partnerships with Lexalytics and Klout.
What it does:Connects retailers such as Argos and Karen Millen with local courier companies, enabling online and in-store customers to receive their shopping within as little as 90 minutes or within a one-hour window.
Why it’s hot:The company recently raised $2 million from the UPS Strategic Enterprise Fund and existing investors Hummingbird Ventures and GeoPost. It will use the new investment to expand the team, acquire new retail partners, and prepare to launch its service in the U.S.
What it does: Allows smaller merchants to set up interbank transfers for customers via an online tool, the API or partners.
Why it’s hot: Direct debit is still a popular way to send regular payments, and GoCardless’s offers means that small businesses can take advantage of banking tools that previously only the big boys could access. Anything that enables e-commerce for the little guys wins friends – and funding, as the $1.5 million raised so far demonstrates.
What it does:Award-winning global platform for social video advertising. It distributes video across platforms such as YouTube, Facebook, Twitter, premium publisher sites, influential blogs and mobile applications.
Why it’s hot: Has delivered, tracked and audited 1.65 billion video views, across 2,000+ successful social video campaigns, for more than 400 brands since 2007. In January 2012, received a $25 million Series A investment — the largest ever for a private company in the social video space. Estimated 2012 revenue: £17.6 million; growth has averaged 157%.
What it does:
Provides a single place for users to track their favorite bands.
Why it’s hot: Songkick wants to “put every single concert or festival that’s ever happened online.” The site attracts more than 5 million unique users per month. In 2012 it raised a $10 million funding round led by Sequoia. (Existing investors Index and Y Combinator also participated.) Claims to be the second-biggest live-music site after Ticketmaster. Songkick has collected 1 million past concerts stretching back to the 1960s; they’re on their way to becoming the definitive live music resource online.
What it does:Free source of information on companies.
Why it’s hot: Duedil aggregates company information from Companies House, credit ratings agencies and other sources and serves it up for free (for now; it will introduce premium services soon; it also offers an API for business information). The company received seed funding from Passion Capital; angel investors include Wonga’s Jonty Hurwitz, Sherry Coutu, Tom Hulme, Denis Raeburn, and Federico Pirzio-Biroli. Duedil claims 75 of the FTSE 100 now use its services.
What it does:Foreign currency transfer services.
Why it’s hot: Transferwise keeps currency transfer costs down by using the real exchange rate and charging a low service fee. Can currently handle payments between the UK and eurozone countries, but it’s adding more currencies soon. Backed by IA Ventures, Index Ventures, Kima Ventures, Seedcamp and The Accelerator Group as well as private individuals who have built, or are building, PayPal, Wonga, Skype, Betfair and Simple.com.
What it does:An online marketplace to help businesses find fast finance, and investors get better returns.
Why it’s hot: Backed by Index Ventures, Union Square Ventures, and a number of prominent angel investors to the tune of £13.2 million so far. More than 1,000 businesses have been funded, with a total loan value to date of £78.5 million. Now lending more than £1 million a month, usually in tranches of £5,000 to £100,000. Tapping into the trend for peer-to-peer lending.
What it does:UK property website.
Why it’s hot: Zoopla is one of the UK’s most comprehensive property websites. Launched in 2008, the site attracts over 20 million visitors per month, and was named one of the Top 10 UK Tech Companies (Guardian) and one of the Top 10 Most Innovative UK Companies (Smarta). Shareholders include A&N Media (a division of the Daily Mail and General Trust), Atlas Venture, Octopus Ventures and a handful of well-respected angel investors.
Under the Radar
Space Ape Games
What it does:Social games on tablets and mobile phones.
Why it’s hot: Space Ape is a stealth start-up founded by John Earner, previously Head of Product at Playfish, Simon Hade, an early Product guy at Skype, and Toby Moore, previously the CTO of Mind Candy. The company’s LinkedIn profile says, “Space Ape may or may not be working on games. They aren’t saying.” Space Ape has raised $2.6 million and is backed by Accel Partners in the UK and California, Initial Capital, Connect Ventures, and angel investor Gigi Levy.