Which 10 companies raised the most venture capital in 2018?
How were they able to raise so much money?
And at such extraordinary valuations?
And what can your business learn from them to drive more growth and funding in 2019?
Learn who they are below, along with a key lesson from financing and growth success that can be put to work in your business right away:
#10. Peloton: $550 million. Peloton, often referred to as the “Netflix of fitness” and famed for its luxury stationary bicycle that allows users to stream spinning and other exercise classes through a monthly subscription service, has raised now over $1 billion in equity funding and in its latest round at a $5 billion+ valuation.
Key Lesson: Combining multiple business models – in Peloton’s case, selling a high margin, high-priced product PLUS a super-profitable and “sticky” subscription service – can create a virtually unassailable competitive advantage.
#9. Automation Anywhere: $550 million. San Jose, CA – based developer of work process automation software that raised this capital as its first ever outside financing 15 years after the company’s founding.
Key Lesson: It is never too late to raise money. Too many existing businesses think outside growth capital is only for startups, but very often it is the right and best strategic choice for companies no matter how old or lacking in “glamour” they might be.
#8. Lyft: $600 million. In what is probably its last funding round before going public early this year, Lyft – when compared to its archrival Uber – has quietly gone about building and maturing its core ridesharing business while exploring expansion into scooters, bikes, and ultimately autonomous vehicles.
Key Lesson: One doesn’t have to be first to market, nor the largest or most renowned player in a market to prosper and win. In fact, it is often better to be a “fast follower,” – learning from the industry leaders and benefiting from their “education” of a new market and customers.
#7. Opendoor: $725 million. Online real estate marketplace Opendoor raised capital this year via two investments from SoftBank, the massive and famed Japanese multinational conglomerate and investment firm.
Key Lesson: As financial markets become more global with each passing year, for very many U.S. companies, it is far more probable to raise money from overseas investors than from domestic ones.
So ask yourself if in 2019 your company should explore and execute upon an international fund-raising strategy.
#6. Katerra: $865 million. Again a U.S. company being backed in a big way by SoftBank, but in Katerra’s case for what is fundamentally an old school project-based construction business.
Key Lesson: So many traditional businesses – from construction to healthcare to professional services – remain ripe for disruption and change.
If your business competes in one of these traditional industries, ask yourself how can it utilize technology and innovation to do things just a bit differently and better than legacy and tradition-bound competitors?
#5. Instacart: $871 million. Online grocer Instacart continues to raise lots of cash (now more than $2 billion) to attempt to do what many companies have tried and failed to accomplish – get customers to move their “analog” food shopping online.
Key Lesson: Just because others have been unsuccessful with a new business model does not mean a new business will be too. In fact, one of the most overlooked sources of great new business ideas is that list of startups that fail every year – within them are usually bursts of business model brilliance that with just a bit of fine-tuning can be made to fly.
#4. Magic Leap: $963 Millon. Makers of virtual reality headsets and software Magic Leap has now raised more than $2 billion to bring virtual reality to the consumer and business mainstream.
Key Lesson: As my 11 year old son likes to say, “dab on them haters.” For every virtual reality evangelist and true believer, there are as many doubters and skeptics.
Great business builders strive for momentous change, not popularity.
How about you?
#3. Juul Labs: $1.2 Billion. Maker and marketer of e-Cigarettes Juul – disturbingly so popular with teenagers – just this past month agreed in principle to a $12.8 billion(!) investment from Altria Group, parent company of Marlboro cigarettes.
Key Lesson: As the pharmaceutical industry proves so well with its extraordinary product margins, there aren’t many business models that can compare with selling addictive drugs.
The hope is always that the “positive externalities” of their business success will outweigh the personal health costs these kinds of products so sadly cause.
#2. Uber: $1.2 Billion. The modern poster child for raising huge gobs of private capital – now totaling over $20 billion – Uber has attained that hugely impressive feat of in such a short time becoming a fundamental fabric of modern life and society (even my 80 year old mother now Ubers everywhere to and fro.)
Key Lesson: Arguably the most valuable core competency a business can have is founders and executives who are highly skilled at raising money.
Because with buckets of money so many good business things – technology, talent, brand – can be simply bought and paid for faster, bigger, and better than everyone else.
So make it a goal in 2019 to just become a better fund-raiser – your business and your wallet will thank you.
#1. Epic Games: $1.25 Billion. My aforementioned 11 year old son (and his equally video game mad 12 year old brother), are personal testaments to the addictive power of Epic Games flagship game Fortnite.
As a Dad I don’t like it, but as a businessman I am extremely impressed by how this one game dominates the fragmented and crowded video game space.
Key Lesson from their 2018 Success: Check and challenge your prejudices. Video gaming and esports are, from very many perspectives, as morally acceptable as are traditional sports and the movies.
Generations and consumers tastes and needs change, and just because we may not share them does not mean they are without value or business merit.
Heed the easy wisdoms from these 10 companies that led the pack of over 4,000 U.S. companies that raised venture capital in 2018.
Make it a resolution for the New Year to explore and execute upon your company’s financing strategy and see business possibilities and opportunities open up like never before.
Looking to Raise Money or Sell Your Business in 2019?
With it, you will be able to assess your company’s likelihood – at varying prices and valuations – of raising capital and / or attracting a buyer.