Virtual Reality Startup Highlights – Q1 2018

Here is our Q1 2018 summary report on the virtual reality startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete virtual reality report and research platform, visit us at www.venturescanner.com or contact info@venturescanner.com.

Financial Technology Sector Overview – Q1 2018

The financial technology sector has seen a lot of momentum in funding and exits in recent years. As we previously noted, fintech funding has shifted to later stages and its exit events have skyrocketed.

We will now take a closer look at the different components of financial technology and how they make up this startup ecosystem. We have classified the companies into 16 categories. This blog post will illustrate what these categories are and which categories have the most companies. We will also look at how these categories compare with one another in terms of their funding and maturity.

Consumer Lending Is the Largest Financial Technology Category

Let’s start off by looking at the Sector Map for the financial technology sector. As of March 2018, we have classified 2407 financial technology startups into 16 categories that have raised $90 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Financial Technology Sector Map
Financial Technology Sector Map

We see that Consumer Lending is the largest category with 321 companies. These companies offer new ways for consumers to obtain personal loans and have their credit risks assessed. They include peer-to-peer lending, micro-financing, big data analytics, and consumer credit scoring services. Some example companies are SoFi, CommonBond, Avant, and Lufax.

We have seen what the different categories making up this sector are and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Payments Backend Is the Heavyweight Category in Financial Technology

Our Innovation Quadrant divides the financial technology categories into four different quadrants.

Financial Technology Innovation Quadrant
Financial Technology Innovation Quadrant

We see that the Pioneers quadrant has the most financial technology categories with 10. The Pioneer categories are in the earlier stages of funding and maturity. The Disruptors quadrant contains three categories: Consumer Lending, Business Lending, and Consumer Payments. These three categories have acquired significant financings at a young age. The Established quadrant includes Banking Infrastructure and Transaction Security. These two categories have reached maturity with less financing. The Heavyweights quadrant contains the Payments Backend category. This category has reached maturity with significant financing.

It’s interesting to see that both lending categories, Consumer Lending and Business Lending, are Disruptors. This indicates that lending startups have transformed the fintech industry with their venture capital backing at early ages. In addition, the Heavyweight category, Payments Backend, is the one that leads fintech in exit activity as we saw in our exits blog post. This makes sense since mature and well-funded companies are more likely to be acquired or go public than those that aren’t.

We’ve now seen the financial technology categories and their relative stages of innovation. How do these categories stack up against one another? Let’s look at the Total Funding and Company Count Graph.

Consumer Lending Startups Have the Most Funding and Companies

The graph below shows the total amount of venture funding and company count in each category.

Financial Technology Funding and Company Count
Financial Technology Funding and Company Count

As noted earlier, the Consumer Lending category leads financial technology with 321 companies. In addition, the above graphic highlights that Consumer Lending also leads in funding with over $28 billion. Some of the best-funded companies in this category are JD Finance ($3.01B), SoFi ($2.08B), and Avant ($1.78B).

It’s noteworthy that the funding in Consumer Lending is 81% higher than the funding in the next category, Business Lending. Business Lending companies offer new ways for businesses to raise debt financing and have their credit risks assessed. Some example companies include Bond Street, LendInvest, BlueVine, and Funding Circle.

Conclusion: The Consumer Lending Category Leads the Fintech Sector

From the above analysis, we can see the Consumer Lending category leads financial technology in funding and company count. On the other hand, the Payments Backend category stands out as the Heavyweight category in our Innovation Quadrant. It has reached maturity with significant average funding per company versus other categories. It’ll be interesting to see how the financial technology landscape will change and develop throughout the rest of 2018.

To learn more about our complete financial technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Health Technology Sector Starts Maturing

As we previously noted, health technology funding is experiencing robust growth. We’ve now gone one level deeper in our analysis on our Health Technology Report and Research Platform and determined that the health technology sector is starting to mature.

This conclusion comes from two key observations:

  • Funding amount percentages showed a slight shift to later stages
  • Funding count percentages showed a clear shift to later stages

We’ll explain these key observations with some graphics and discussions below.

To help set the stage, the graphic below highlights health technology funding amounts over time. As you can see, the sector’s overall funding demonstrated consistent growth.

Health Technology Funding by Quarter
Health Technology Funding by Quarter

Health Technology Funding Amount Percentages Shifting Slightly to Later Stages

Let’s examine the health technology funding amounts by round as a percentage of the total funding amount by year.

Health Technology Funding Amount Percentages
Health Technology Funding Amount Percentages

The above graph indicates that there has been a slight shift to later-stage funding. In 2012, Seed and Series A funding amounts accounted for around 25% of total funding. By 2017, that total had dropped to under 20%. Consequently, the funding amounts from Series B onward grew from around 75% of total funding to over 80%.

Would the funding count percentages confirm this trend? Let’s examine in the the next section to find out.

Health Technology Funding Count Percentages Clearly Shifting to Later-Stage Events

The below graph shows the health technology funding event counts by round as a percentage of total events.

Health Technology Funding Count Percentages
Health Technology Funding Count Percentages

This graph paints a clearer picture of the funding shift than the previous funding amount graph. In particular, Seed funding count percentage decreased by more than half its size from 53% to 23%. The funding count percentages in all other rounds increased by various magnitudes from 2012 to 2017.

Conclusion: Health Technology Sector Matures As Funding Shifts to Later Stages

In summary, we have seen health technology funding amounts and funding event counts shift from the early-stage rounds to mid and late-stage rounds. These observations led us to conclude that the health technology sector is starting to mature.

To learn more about our complete health technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Backend and Auto Insurance Categories Lead Insurtech Exit Activity

Last quarter we reviewed insurance technology exit activity and saw its healthy upward trend. We are now going one step further on our insurtech report and research platform to examine exits by category. We conclude that the Insurance Backend and Auto Insurance categories are at the forefront of insurtech exit activity.

This conclusion was derived from two key data points:

  • The Insurance Backend category leads in the number of exits
  • The Auto Insurance category leads in acquisition amount

We’ll explore these takeaways in some more detail below.

To help set the stage, the graphic below shows insurtech exit activity over time. As you can see, the sector’s exit activity grew significantly over the past few years with a slight drop in 2017 from 2016.

Insurance Technology Exits by Quarter
Insurance Technology Exits by Quarter

Insurance Backend Leads Insurtech in the Number of Exits

The below graph highlights the number of insurtech exit events by category.

Insurance Technology Exit Counts by Category
Insurance Technology Exit Counts by Category

This graph shows that the Insurance Backend category leads the sector with 50 exit events. Its exit activity is more than 1.5 times the next category, Insurance Marketplace, which has 32 exit events.

Insurance Backend contains companies that help insurance companies with their day-to-day operations. They include CRMs for insurance agents, communication tools for insurance companies, and claim filing tools for customers. Some example companies are CHSI Connections, ClaimKit, Shift Technology, and Unirisx.

Let’s now see how insurtech categories compare with one another by acquisition amount.

Auto Insurance Leads Insurtech in Acquisition Amount

The graph below shows the acquisition amounts in different insurtech categories.

Insurance Technology Acquisition Amounts by Category
Insurance Technology Acquisition Amounts by Category

We can see from this graph that the Auto Insurance category leads insurtech in total acquisition amount with over $16 billion. Auto Insurance companies offer car insurance and car telematics products. These products generally detect your mileage and driving behavior to customize your insurance plan. Some example companies in this category include Metromile, The Zebra, Clearcover, and Cuvva.

Auto Insurance has seen some large acquisitions in recent years. Esurance was acquired by the Allstate Corporation in May 2011 for $1 billion. DriveFactor was acquired by CCC Information Services in May 2015 for $22 million. Tempcover was acquired by Connection Capital in January 2018 for $16 million.

The acquisition amount in Auto Insurance represents 30% of all insurtech acquisition activity. It’s noteworthy that its acquisition amount is more than 1.7 times the next category, Enterprise Insurance, which has just under $10 billion.

Conclusion: Insurance Backend and Auto Insurance Lead Insurtech Exit Activity

In summary, we have examined insurtech exit activity by the number of exit events and acquisition amount. The Insurance Backend category leads the sector in the number of exit events. The Auto Insurance category leads in acquisition amount.

To learn more about our complete insurance technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Retail Technology Sector Matures As Funding Shifts to Mid and Late Stages

As we previously noted, retail technology has shown consistent growth over the past few years. Now we are taking a more detailed look on our retail technology report and research platform to examine its funding by round. From our analysis, we can conclude that the retail technology sector has been maturing over the past few years.

This conclusion comes from two takeaways:

  • Funding amount percentages are shifting to mid and late-stage events
  • Funding count percentages are shifting to mid and late-stage events

We’ll explore these takeaways in some more detail below.

To help set the stage, the graphic below highlights retail technology funding amounts over time. As you can see, the sector’s overall funding experienced a burst of growth from 2012 to 2017.

Retail Technology Funding by Quarter
Retail Technology Funding by Quarter

Retail Technology Funding Amount Percentages Shifting to Later-Stage Events

Let’s examine the retail technology funding amounts by round as a percentage of the total, which show changes independent of the total funding amount by year.

Retail Technology Funding Amount Percentages
Retail Technology Funding Amount Percentages

The above graph shows that the funding amount percentages in Seed and Series A rounds dropped relative to the other round types. In addition, the funding amount percentages in all the other rounds stayed constant or increased.

Specifically, Seed and Series A funding amount percentages fell by over half from 32% to around 13%. On the other hand, Series C and Late Stage funding amount percentages grew from 24% to over 40% during the same time period.

We see that the funding amount percentages by round indicate a shift from early-stage to mid and late-stage events from 2012 to 2017. Would the funding event count graph show the same trend? Let’s examine that in the next section to find out.

Retail Technology Funding Count Percentages Shifting to Later-Stage Events As Well

The below graph shows the retail technology funding counts by round as a percentage of total events.

Retail Technology Funding Count Percentages
Retail Technology Funding Count Percentages

This graph supports our previous conclusion from the funding amount graph. In particular, Seed and Series A funding count percentages dropped significantly from 80% to under 50%. The funding count percentages in all other rounds increased by various magnitudes from 2012 to 2017.

Conclusion: Retail Technology Sector Matures As Funding Shifts to Later Stages

In summary, we have seen retail technology funding amounts and events shift from the early-stage rounds to the later-stage rounds. These observations led us to conclude that the retail technology is in the maturing phase.

To learn more about our complete retail technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Security Technology Startup Highlights – Q1 2018

Here is our Q1 2018 summary report on the security technology startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete security technology report and research platform, visit us at www.venturescanner.com or contact info@venturescanner.com.

Security Technology Sector Overview – Q1 2018

Our security technology report and research platform contains companies that enable enterprises and consumers to secure their data and networks. They often focus on protecting information, authenticating identity, and defending against cybersecurity attacks.

In this post we examine the different components of security technology and how they make up this startup ecosystem. We have classified the companies into 14 categories. This blog post will illustrate what these categories are and which categories have the most companies. We will also look at how these categories compare with one another in terms of their funding and maturity.

Threat Detection and Mitigation Is the Largest Security Technology Category

Let’s start off by looking at the Sector Map for the security technology sector. As of March 2018, we have classified 1063 security technology startups into 14 categories that have raised $25 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Security Technology Sector Map
Security Technology Sector Map

We see that Threat Detection and Mitigation is the largest category with 283 companies. These companies actively monitor networks to detect attacks and mitigate them in real-time. Some example companies include DarkTrace, Cylance, Menlo Security, and Vectra.

We have seen what the different categories making up this sector are and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Most of the Security Technology Categories Are Pioneers

Our Innovation Quadrant divides the security technology categories into four different quadrants.

Security Technology Innovation Quadrant
Security Technology Innovation Quadrant

We see that the Pioneers quadrant has the most security technology categories with 9. The Pioneer categories are in the earlier stages of funding and maturity. The Disruptors quadrant contains two categories: Cloud Security and Computer Forensics. These two categories have acquired significant financings at a young age. The Established quadrant contains Industrial Security, which has reached maturity with less financing. The Heavyweights quadrant includes two categories: Endpoint Security and Email Security. These two categories have reached maturity with significant financing.

We’ve now seen the security technology categories and their relative stages of innovation. How do these categories stack up against one another? Let’s look at the Total Funding and Company Count Graph.

Threat Detection and Mitigation Startups Have the Most Funding and Companies

The graph below shows the total amount of venture funding and company count in each category.

Security Technology Total Funding and Company Count
Security Technology Total Funding and Company Count

As noted earlier, the Threat Detection and Mitigation category leads security technology with 283 companies. In addition, the above graphic highlights that Threat Detection also leads in funding with almost $10 billion. Some of the best-funded companies in this category are FireEye ($841M), Tanium ($581M), and Alert Logic ($387M). It’s also noteworthy that the funding in Threat Detection is 60% higher than the funding in the next category, Data Security.

Conclusion: The Threat Detection and Mitigation Category Leads the Sector

From the above analysis, we can see that the Threat Detection and Mitigation category leads security technology in funding and company count. On the other hand, Endpoint Security and Email Security stand out as the Heavyweight categories in our Innovation Quadrant. They have reached maturity with significant average funding per company versus other categories. It’ll be interesting to see how the security technology landscape will change and develop throughout the rest of 2018.

To learn more about our complete security technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com