- While many tech startups have reeled from the coronavirus crisis, some of them are still attractive to investors.
- A Silicon Valley company called EquityBee, which lets startup employees connect with investors who can help them exercise their stock options, said that 10 hot startups stand out based on data from its platform.
- EquityBee calls the financiers on its platform "hidden investors" who bet on startups they believe will do well when they are sold or when they go public. Investors and employees remain anonymous on the platform.
- "We've seen a very strong increase for fintech companies, for cloud-based companies and for developer tools," EquityBee cofounder and CEO Oren Barzilai told Business Insider.
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While many tech startups have taken huge hits from the coronavirus crisis, some continue to attract interest from investors.
Startups such as cloud platforms Vercel and Better Cloud have managed to raise venture capital during the pandemic while data analytics company Palantir filed to go public (and cloud insurance firm Lemonade even made its market debut).
Silicon Valley company EquityBee, which connects startup employees with investors who can help them exercise their stock options, has seen a boost in investor interest on its platform, too. EquityBee calls the financiers on its platform "hidden investors," that buy vested equity options from employees, essentially betting on startups that they believe will do well when they are sold or when they go public. Both investors and employees remain anonymous on the platform.
The company said it has roughly 3,000 investors who are able to make the minimum investment of $10,000 to participate in the platform. One of the largest investments by an individual was a few hundred thousand dollars into one startup, according to EquityBee.
The coronavirus crisis has sparked a flurry of activity on the platform.
"We've seen a very strong increase for fintech companies, for cloud-based companies, and for developer tools," EquityBee cofounder and CEO Oren Barzilai told Business Insider.
EquityBee has also seen "a very significant drop" in investor interest in travel-tech startups, such as TripActions. There is one exception, though, Barzilai said: "Investors are still very interested in Airbnb."
Barzilai said EquityBee had seen a spike in interest early on — about three months ago — from employees who were worried about losing their jobs and who began exploring ways to exercise their options when the coronavirus crisis began to escalate.
But it has become clearer over the last few months which startups are valuable in the eyes of EquityBee investors.
Here are the top 10 startups that are hot to the "hidden investors" on the Equity Bee platform:
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Airbnb
Funding: $5.4 billion
Top Investors: Silver Lake Partners, Capital Group, TCV
What it does: Airbnb, which pioneered the online home rental market, has been widely expected to file for an IPO soon.
But the San Francisco startup took a big hit from the coronavirus crisis which led to a sudden drop in both business and leisure travel. The company was forced to lay off 25% of its staff.
But CEO Brian Chesky has remained upbeat about the company's prospects, telling Business Insider in a recent interview: "There is an innate human desire to travel, to explore, and that is never going to go away. Travel may be on pause, but it's going to come back."
eToro
Funding: $222.7 million
Top Investors: Spark Capital, BRM Capital, China Minsheng Financial Holdings
What it does: The pandemic has not slowed down eToro's growth, which could explain strong investor interest in the online trading platform. The UK-based startup reported 13 million global registered users in May. The company also said stock trading has tripled on its platform since the beginning of 2020.
Houzz
Funding: $613.6 million
Top Investors: Sequoia Capital, ICONIQ Capital, GGV Capital
What it does: Houzz is a popular online home improvement and design platform that helps connect homeowners with designers, contractors, architects and other professionals.
The Silicon Valley startup was forced to cut jobs and salaries as the coronavirus escalated, but it has announced some good news in the past few months too: It expanded its network to more than 2.5 million professionals and introduced virtual meeting and visualization tools for its clients.
Palantir Technologies
Funding: $2.6 billion
Top Investors: Sompo Holdings, Kortschak Investments, Founders Fund
What it does: Palantir, the controversial big data analytics company, has confidentially filed paperwork for an IPO, one of the most widely-anticipated public trading debuts in years.
Palantir, which is valued at about $20 billion, was founded in 2003 by a group of PayPal alumni, including investor Peter Thiel and Alex Karp, who is currently its CEO. The company's technology collects and analyzes huge amounts of data in order to detect patterns.
But Palantir has been criticized for the role its technology has played in law enforcement, including raids on undocumented immigrants conducted by Immigration and Customs Enforcement (ICE).
Monday.com
Funding: $234.9 million
Top Investors: Sapphire Ventures, Insight Partners, Genesis Partners
What it does: Monday.com is one of the fast growing collaboration and production platforms, which have become more important in the world of remote work.
Jai Das, a partner at Monday.com investor Sapphire Ventures, named the company among the startups poised to come out stronger from the coronavirus crisis.
"You can't really just have hallway conversations anymore," he told Business Insider in an interview in May. That makes online collaboration platforms like Monday.con even more valuable for businesses adapting to the new normal.
SpaceX
Funding: $3.5 billion
Top Investors: Founds Fund, NASA,
What it does: It's not surprising that EquityBee's "hidden investors" would be drawn to the most famous space exploration company. SpaceX was in the news recently when it launched its first two human passengers into a space.
It was a major milestone for the 18-year-old company whose CEO Elon Musk has told his employees to aim for bigger things, including eventually taking passengers to Mars.
SimilarWeb
Funding: $112.2 million
Top Investors: Viola Growth, Prosus & Naspers
What it does: SimilarWeb is New York-based web analytics company that helps businesses track and analyze digital trends related to their product and their market.
The company offers a form of digital marketing intelligence that has become even more valuable at a time when markets are getting disrupted. For example, recently SimilarWeb shared data with Business Insider that showed a sharp uptick in traffic for online grocery and food delivery firms, and a drop-off for sites offering luxury goods.
JFrog
Funding: $226.5 million
Top Investors: Insight Partners, VMware
What it does: Silicon Valley startup JFrog helps developers manage their software more efficiently. It is considered a pioneer in the world of DevOps, which refers to a critical arena in software development and operations.
JFrog's customers include tech giants like Google, Amazon, Netflix and Facebook.
"When you do something so fundamental that powers all of [the major applications], it's very hard to explain why this company is so important," CEO Shlomi Ben Haim told Business Insider in a recent interview. "We are the guys behind the scenes."
Databricks
Funding: $897 million
Top Investors: Andreessen Horowitz, New Enterprise Associates
What it does: Founded in 2013, Databricks has become one of the hottest data analytics startups today. The San Francisco-based startup raised $400 million in a Series F round late last year at a $6.2 billion valuation. It also recently hired Silicon Valley veteran David Conte as CFO, sparking speculation that the company was gearing up for an IPO.
Databricks' solid finances has made it easier for the startup to navigate the coronavirus crisis, CEO Ali Ghodsi said.
"We find ourselves in the extremely fortunate situation of having well over half a billion dollars on our balance sheet," he told Business Insiderin an April interview.
Stripe
Funding: $897 million
Top Investors: Andreessen Horowitz, GV, Sequoia
What it does: Stripe is a fast-growing digital payments platform based in San Francisco. It just raised $600 million from investors in April, pushing its valuation up to nearly $36 billion.
CEO Patrick Collilson has touted the company's financial strength, highlighted by over $2 billion on its balance sheet. Stripe has also signed major customers, including Mattel and NBC.