March 30, 2011

Information Technology Trends: Hot Companies, VC Bets

Information Technology Trends
Hot Companies, VC Bets

Yesteryear’s top bets

VentureBeat’s top 10 VCs in 2010 included hot companies Twitter, Zynga, and Groupon. This creamy top ten included only one non-web/digital-media company: Boston-Power, maker of EV and Grid lithium-ion batteries.

Software was the single biggest benefactor in 2010 according to The PwC MoneyTreeTM Report Q4 2010/Full-year 2010. Life Sciences (biotech and medical devices) took nearly 1/3rd of the VC market. CleanTech grew significantly taking with five of the top ten deals in 2010 attracting 17% of VC dollars; the same percentage was invested in internet-based companies.

IT Services, Tele¬communications, and Media & Entertainment all saw big dollar increases in 2010 as venture capital investment rises for the first time since 2007.

This year’s top 50

2011’s Wall Street Journal’s most likely to succeed US-based VC-funded companies shows a similar bent. The second annual “Top 50 Venture-Backed Companies” picks are based on the capital raised, the experience and track record of the talent and investors, and have a valuation of $1b or less. The winners are in Information Technology (23 out of 50), Business & Financial Services (12), Health Care (8), and Consumer Services (6).

The top of the top include: Castlight Health Inc. (web-based software analyzing health care costs), Xirrus Inc. (enterprise Wi-Fi), Xactly Corp (web-based sales compensation management tool), Recycle Rewards Inc. (recycling partnering and motivation), ExteNet Systems (infrastructure for wireless), Cyan Optics Inc. (data delivery), Aster Data Systems Inc. (data management and analytics), Glam Media Inc. (web publisher/targeted advertising), Carrier IQ Inc. (mobile analytics), and Imperva Inc. (data security).

The web dominates throughout: with all of the Consumer Services companies offering an internet-based, the majority of Business & Financial Services companies and a quarter of the Health Care companies

offering a web service. Wireless infrastructure, data-management/analytics/delivery services, software as a service, storage and security, as well as the cloud are all looking hot.

Betting folks are betting on California, with a whopping 35 of the 50 companies. New York and Texas followed up with 4 and 2 companies, respectively. And each of the following had one company on the list: Illinois, Indiana, New Jersey, Massachusetts, North Carolina, Georgia, Colorado, Utah and Washington.

Related Articles:

The Top 50 Venture-Backed Companies
VentureBeat’s top 10 VC startup fundings in 2010
Trends in Terms of Venture Financings in the San Francisco Bay Area (Fourth Quarter 2010)
PricewaterhouseCoopers, National Venture Capital Association, MoneyTreeTM Report Q4 2010/Full-year 2010

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