Will the Next Great Boston Tech Company Please Stand Up?
Here we are in early 2014, and it feels like a zeitgeist-y moment for the Boston tech scene. So I wanted to weigh in and connect a few dots around town—and get people thinking.
Last Friday, Care.com became the first local tech company—a consumer-facing Web firm at that—to IPO since 2012. While nine Boston-area life sciences companies went public last year—and one more, Dicerna, had its IPO today—no one in the tech industry did. (As an aside, Boston is considered the best place in the world for biotech companies. That’s not true in tech, and that’s just the way it is.)
Care.com’s stock (NYSE: CRCM) has performed well—it’s up more than 50 percent from its IPO price of $17—even as the rest of the market has been down this week.
Meanwhile, we’re still waiting for the first big Boston-area acquisition of 2014. Around this time last year, public companies Acme Packet and Zipcar were snapped up by Oracle and Avis, respectively. Crashlytics, a fast-rising mobile startup, was bought by Twitter.
On the early-stage side, Techstars Boston named its seventh class of startups last week. Hardware accelerator Bolt has been up and running for half a year, and is working on its second round of applications. Keep in mind these startup programs—along with MassChallenge, LearnLaunchX, and various incubators—didn’t exist five years ago.
What’s more, MIT, Harvard, and other schools are upping their efforts to support young entrepreneurs. Much of this is geared toward keeping the next Mark Zuckerberg or Drew Houston in town.
Notable entrepreneurs like David Chang, Paul English, and Semyon Dukach are devoting time to running new startup incubators and angel investing. Walt Doyle, Matt Lauzon, Drew Volpe, and Yuchun Lee have been working on their next big things as entrepreneurs-in-residence at local venture firms. Interestingly, investors think there is a seed-stage funding glut in places like Silicon Valley and New York, but not Boston (yet).
So, there’s lots of activity on the early side and some on the later side. But I would argue that the most compelling players are in the middle—and that’s where a lot more effort is needed to grow successful companies in Boston.
Back in 2012, I posted a list of 11 private tech companies that had raised $50 million or more in venture financing—an arbitrary cutoff, but one that helped identify some of Boston’s biggest tech bets. Those are companies like HubSpot (which made news this week about its revenue and progress), Wayfair, Rethink Robotics, and Veracode.
Since then, a few others on the list—Jumptap, Kayak, and Verivue—were acquired. Care.com would have made the new, updated list up until its IPO. Other additions would be Visible Measures, Acquia, Bit9, Brand Networks, MC10, Extreme Reach, and uTest—with companies like DataXu, Gazelle, and Plexxi knocking on the door.
Some of these could potentially grow into iconic companies. Perhaps what’s most interesting is their diversity. Together they span marketing, e-commerce, networking, data management, electronics, security, travel, Web and mobile development, and more. And that’s what makes it so hard to answer this question:
What will the next great Boston tech company look like?