Of the list’s 225 alumni, 131 or 58% became unicorns, including DoorDash, Figma, Anduril, Benchling and Rippling. This year, artificial intelligence dominates the list.
From Amy FeldmanForbes Employee
Damn, we are fine. This year was the tenth year in a row that Forbes teamed up with TrueBridge Capital Partners to find the 25 U.S.-funded companies most likely to reach a $1 billion valuation. Of the list’s 225 alumni, 131, or 58%, became unicorns, including DoorDash, Figma, Anduril, Benchling, and Rippling, although 21 of those are now worth less than $1 billion. 42 were acquired; only three (1%) went public for less than $1 billion. There were surprisingly few disasters: only five startups imploded or shut down, most spectacularly microbiome startup uBiome, a 2018 alumnus of the list that was liquidated after an FBI raid over its billing practices.
Only a tiny fraction of the country’s tens of thousands of venture-funded startups will ever reach a billion-dollar valuation. Forbes This list was first published in 2015 in collaboration with TrueBridge. The goal was to find those that had the potential to become unicorns long before they broke through to household names. From the beginning, the list was based on quantitative analysis, using data provided by companies on metrics such as revenue, revenue growth, valuation, valuation growth and number of employees.
One of the standout companies in the first year was Tanium, the cybersecurity startup that was one of three companies to cross the $1 billion mark this year prior to our publication. (Today we are more cautious and exclude such startups.) Today, the Kirkland, Washington-based startup, which reached a $9 billion valuation in 2021, has raised nearly $1 billion in funding and ranks 20th on the Forbes Cloud 100 list. And perhaps our biggest single gainer not just this year, but on the entire list: DoorDash, the food delivery company that now trades on the Nasdaq with a market cap of $51 billion.
Alumni on the list include DoorDash, Anduril, Tanium, Figma, Rippling and Duolingo.
Since then, we have identified startups including Anduril, the defense technology company and former 2018 list company that is now valued at $14 billion; language learning app Duolingo, which was on the 2019 list and is now publicly traded with a market cap of $8 billion; design startup Figma, a former 2019 list company that is now valued at $12.5 billion; HR software company Rippling, which was on the 2020 list and is now valued at $13.5 billion; and semiconductor startup Astera Labs, a former 2022 list company that is now publicly traded with a market cap of $6.2 billion.
Astera, the first semiconductor startup on this list, reported $230 million in revenue over the past 12 months – and told investors in early August that it expects to generate $95 million to $100 million in revenue in the upcoming third quarter. The company’s founders, all young entrepreneurs who previously worked at Texas Instruments, started the company because they believed that existing methods of connecting all the GPUs and AI chips together were not keeping up with advances in artificial intelligence and machine learning. In a recent interview, co-founder and president Sanjay Gajendra said the AI boom has evolved even faster than expected. “We didn’t imagine the models with over a trillion parameters,” he said. “To be honest, this is much bigger than we imagined.”
Last year’s list included Monarch Tractor, the maker of an electric autonomous tractor that recently raised $133 million at a $518 million valuation to expand overseas, starting in Europe. Although farmers are delaying capital equipment purchases due to interest rates, Monarch expects revenue of $112 million this year, up from $37 million last year. “For farmers, high interest rates make purchasing challenging,” said co-founder and CEO Praveen Penmetsa. “We feel some of that, but being a transformational company and enabling farmers to save on operating costs will allow us to continue our growth.”
This year, Artificial intelligence currently dominates the markets and the list includes companies that use AI for pretty much everything. Codeium makes an AI app that works like autocomplete, but for code. Scribe uses AI to make training easier than screen sharing over Zoom. Fireworks AI, founded by former Meta CTO Lin Qiao, aims to help companies ship new AI products in as little as five days and at minimal cost. And Replicate offers a library of 25,000 open-source AI models, including Stable Diffusion and Meta’s Llama 2, so developers can test which model works best for them.
But this year’s list also looks beyond the hype to companies solving less glamorous problems, like Promise, which works with municipalities and utilities to collect unpaid bills with text messages and interest-free rates. “We needed to make it clear to the market that you can build products that are non-predatory, that work for people and for the market,” said co-founder and CEO Phaedra Ellis-Lamkins, who previously worked as a union leader, nonprofit executive and business consultant to pop star Prince.
This year’s list includes five companies with female co-founders – Equip, Fireworks AI, Midi Health, Promise and Scribe – all of which also have female CEOs. By comparison, on last year’s list, six companies had female co-founders, but only three had female CEOs. These numbers – a reflection of Silicon Valley’s funding – have remained stubbornly lower than we would like.
This year’s startups had significantly lower average revenue in the previous year than the companies on the 2023 list, $14 million versus $24 million. As AI investment booms, three companies – Coactive AI, Langchain and Turnkey – had no revenue in 2023. They also, perhaps surprisingly, raised less equity, an average of $80 million versus $104 million last year.
The full list of Next Billion-Dollar Startups can be found here.
