It’s never been more clear, as the coronavirus continues to rage throughout in the United States and many other countries around the globe, that the world has entered into a new period of drastic, rapid change. There was our world before COVID (“BC”), and now there is the new world, after the disease (“AD”). Until an effective vaccine becomes globally distributed (in the billions of immunized doses, likely to take a number of years), certain parts of the world are unlikely to go back to they way they used to be.
That fact is scary for everyone, and many people’s lives are very different now, and may never go back to the way they were before. But times of rapid change and huge market disruptions are also the points in history when many of the greatest new ventures are launched. Because when new problems call for novel solutions, the entrepreneurs are always among the first to answer the call for innovation.
We shared 20+ Successful Tech Startups Founded or Forged in Recession last week – but the truth is that recessions really are when so many new great startups are launched or grown, and we had so many examples leftover, that we now bring you Part 2 - Another 25+ Successful Companies Started In Economic Downturn:
Consumer
Entertainment & E-Learning:
Twitch
As Justin.tv’s gaming category grew popular, the company decided to launch a separate video streaming service. The idea was to focus solely on gamers and that’s how Twitch was born in 2011. The site receives about 15 million daily users to stream and discuss video games. Twitch is considered to be the top live streaming platform for gamers. The platform was acquired by Amazon for $970 million in 2014.
Udemy
Udemy (a Founder Institute Silicon Valley portfolio company) is the perfect example of never giving up on your dreams: even though its cofounders were constantly rejected by VCs in the early days, they worked hard to develop the platform and launched in 2010. Within a very short period of time, Udemy started getting traction, quickly growing its learning platform to 10k registered users and then 2k courses to choose from. Today, Udemy has over 50 million students and 57k instructors; plus, there are over 150k available courses to develop new skill sets.
The VCs definitely started paying attention, Udemy has raised $223 million in funding, most recently a $50M round at a $2B valuation led by Bessemer Ventures. And this most recent downturn has now slowed the trends –and according to a recent VentureBeat article “Udemy's online course enrollment surged 425% amid lockdowns.”
Marketplaces:
HotelTonight
Have you found yourself needing a last-minute hotel room at an amazing price? In late 2010, three entrepreneurs founded HotelTonight to help people get the best deals possible. With its instant booking process available across the Americas and Europe, HotelTonight lets travelers focus on experiences instead of on planning. Since its launch, HotelTonight has raised $126.9 million and was recently acquired by Airbnb.
Poshmark
In 2011, Manish Chandra founded an online marketplace to buy and sell clothing. Poshmark brings together a community of fashion enthusiasts, and encourages them to share their personal styles to create an unique shopping experience. Poshmark has 4 million registered sellers and has raised $153 million in funding.
Turo
Shelby Clark was inspired by the sharing economy in 2010 and launched RelayRides. The car sharing startup enables local vehicle owners to rent out their cars through the platform. Users avoid the headaches of going to a rental car company, with the mobile app that allows them to see car availability by location, and to rent it almost instantly. RelayRides changed its name to Turo in 2015, and as of 2017, Turo had 4 million registered users and 170,000 private cars available for rental.
E-Commerce + D2C Brands:
Rent the Runway
In 2009, Jennifer Hyman and Jennifer Fleiss disrupted the fashion industry with Rent the Runway. Rather than purchasing fashion goods, customers can rent designer clothing and accessories for a period of time. Rent the Runway offers membership plans, and also has several physical locations, where customers can rent on the spot as well as receive fashion tips from personal stylists. The startup has received funding from top VC firms like Bain Capital Ventures, Kleiner Perkins, etc., and now co-founders Jennifer Hyman and Jennifer Fleiss also help empower other female entrepreneurs through their Rent the Runway Foundation.
Warby Parker
Affordable glasses used to be hard to come by, so in 2010, Warby Parker set out to change that. Instead of outsourcing production, the socially conscious brand designs and manufactures their accessible designer eyewear in-house. Warby Parker also has a social program in place that consists of a pair of glasses sold equals to a pair of glasses donated to people in need. The company has raised $290.5 million in funding from several VC firms.
Stitch Fix
Katrina Lake and Erin Morrison Flynn started selling women’s clothing from Lake’s apartment in 2011. Stitch Fix grew into an online personal style service where customers receive a box with hand-picked clothing based on their style preferences. Stitch Fix currently has 3 million customers and had over $1 billion in sales in 2018. The startup went public in 2017 at a valuation of $1.4 billion.
Trunk Club
Founded in 2009, Trunk Club delivers a personalized box of clothing to its customers, and styling specialists use the person’s budget and style to curate each box. Customers are able to try on everything before making a purchase, and there’s no additional charges for returns. In 2014, Trunk Club was acquired by Nordstrom for $350 million.
Wish
In its early days launching in 2010, Wish was an app that connected users with merchants through product wish lists. Today, Wish is a top e-commerce platform catering to its customers through personalized visual shopping. Users can purchase thousands of affordable products, straight from their mobile app. Wish has more than 80 million monthly active users and sells close to 1 billion products annually.
Zulily
Mark Vadon and Darrell Cavens founded this e-commerce platform in 2009 - when Vadon and his wife were expecting a child, he realized that he had drastically underestimated the amount of products that the actually needed for the baby. At first, Zulily’s focus was exclusively on children’s clothing, but now it carries a large selection of products for the entire family. Zulily has raised $194.6 million in funding and it was acquired by QVC for $2.4 billion in 2015.
Food & Agriculture:
Impossible Foods
Patrick Brown wanted to improve people’s health and make a positive impact on the planet. In an effort to reduce the environmental impacts of livestock, Brown founded Impossible Foods with a mission to create plant-based food packed with nutrients and flavor that even a carnivor finds convincing.
In 2016, Impossible Foods launched its famous plant-based Impossible Burger as a ground beef replacement. Impossible saves water and reduces greenhouse gas emissions compared to livestock farming; plus, it has more proteins and less calories than a regular beef patty. The Impossible Burger is available in restaurants and select grocery stores across the US. As of today, Impossible Foods have raised $1.2 billion in funding.
Delivery + Gig Economy:
OrderAhead
Henry Lee and Jeffrey Byun founded OrderAhead in 2011. The app changed the way people order takeout by enabling its users to order ahead for food and products from local businesses - instead of waiting outside for their orders to be ready, users received an estimated time for pickup. OrderAhead raised $10.5 million in funding and was acquired by Square in 2017.
Postmates
Bastian Lehmann was interested in logistics, so he and his co-founders launched Postmates in 2011 to provide on-demand delivery services. Users are able to order food and products from more than 600,000 businesses, and track deliveries via GPS through the mobile app. Postmates has more than 65,000 active couriers and operates in 2,940 cities across the US.
Thumbtack
The Thumbtack co-founders wanted to ease the process of finding local professionals in 2008. Today whether it’s a landscaper, a health coach, or a makeup artist, Thumbtack has a network of exceptional talent to tackle almost any project or service need. The company was founded in 2008 and has raised $423.2 million from notable VC firms (Sequoia Capital and Tiger Global Management).
Fitness:
Peloton
Peloton started as a Kickstarter campaign in 2013, and now it’s one of the most profitable exercise equipment companies in the world. Peloton’s founder John Foley is a cycling fan who, rather than paying expensive gym classes, came up with the idea of broadcasting fitness classes straight to stationary bikes at home. The company today produces state-of-the-art stationary bikes and treadmills; and users can access on-demand classes via their digital app. Peloton has raised $994.7 million in funding and went public in 2019.
Orangetheory
No ordinary gym, Orangetheory incorporates three fundamental elements: a science-backed workout, community-building, and activity data, together to achieve users’ complete fitness goals. Founded in 2010 by Ellen Latham and David Long, Orangetheory now has over 1 million users and 1,200 studios worldwide. It ranked #43 in the 2020 Entrepreneur “Franchise 500” list.
Strava
Strava keeps athletes accountable through their social fitness network. Founded in 2009 by Mark Gainey and Michael Horvath, the platform uses GPS capabilities to track a wide array of physical activities. Strava wants to turn fitness into a social experience: users are able to monitor their exercise data, plan workouts, motivate each other and participate in fitness challenges through the app. About 8 million activities are recorded daily in Strava. The company has raised $41.9 million in funding.
FinTech:
Wealthfront
Founded in 2008 by Andy Rachleff and Dan Carroll, Wealthfront is an automated investment management startup. Wealthfront helps its customers easily manage their money through free financial planning, robo-investing and saving accounts with competitive APYs. The startup has raised $204.5 million in funding and manages over $11.4 billion in assets.
Learnvest
Alexa von Tobel wanted to make financial planning accessible and pleasant for people. She launched LearnVest in 2009 to help others strengthen their personal finance education and develop healthy money habits. Users were able to manage their spending, set budgets to achieve financial goals and receive investment advice. LearnVest was acquired by Northwestern Mutual for $250 million in 2015.
Lendio
It’s no surprise that small business owners face limited financing options. Brock Blake and Trent Miskin took it upon themselves in 2011 to create a lending platform that aids entrepreneurs with access to small business loans. Lendio works with a network of 75+ lenders to provide a wide array of financial products that help small business owners achieve their dreams. The startup has facilitated more than 107,000 small business loans, and aims to reach $1 billion in small business funding every year.
B2B
Enterprise Software:
Magic Leap
Rony Abovitz wanted to bring the best of two worlds: physical and digital. He founded the augmented reality startup Magic Leap in 2010 and created the Magic Leap 1, a spatial wearable computer that projects computer-generated images into the user’s retina. The startup has raised $2.6 billion in funding, including major investments from Alibaba, AT&T and Google. Magic Leap has downsized their workforce while doubling-down on enterprise B2B products, in response to COVID challenges.
New Relic
Lew Cirne always had a passion for analytics and performance metrics, so in 2008, he founded New Relic, a software analytics startup for website and application optimization. The company went public in 2014 at a valuation of $1.4 billion. Fun fact you probably didn’t catch reading it the first time: New Relic is also an anagram of Lew Cirne’s own name.
Okta
From single sign-on to user authorization, Okta provides secure identity management to top enterprises across the world. Founded in 2009 by Salesforce alumni Todd McKinnon and Frederic Kerrest, as of January 2019, Okta had over 100 million registered users. In 2017, Okta went public at a valuation of $1.5 billion.
Sendgrid
From email newsletters to sign-up confirmations, SendGrid is a cloud-based service that helps companies deliver its emails to their customers. The startup was founded in 2009 by three entrepreneurs who participated in the Techstars seed accelerator program. Some of SendGrid’s clients include Airbnb, Spotify and Uber. The startup was acquired by Twilio for $3 billion in 2018.
Twilio
Twilio was founded in 2008 to streamline communications via cloud computing. The company equips its clients with messaging, voice and video call integrations directly into apps and software that boosts customer engagement. Coca Cola, Docusign and Nordstrom are just some of the companies that are powered by Twilio. The startup has raised $263.8 million in funding and went public in 2016.
Commercial Real Estate:
WeWork
Although WeWork is known for its co-working spaces, it is a commercial real estate company. After its IPO debacle, WeWork is also now the infamous example of a startup whose growth-over-profitability metrics led to a somewhat abrupt devaluation. But where coworking spaces open for business-as-usual (*and in many places, they are not yet) WeWork is still accomplishing its core offerings: it effectively removes the hassle of dealing with landlords and rental contract negotiations, providing a flexible and swanky work space to creatives and entrepreneurs around the world. The company supplies unique workspaces with complete office services to not only individuals, but also startups and other small businesses – letting WeWorkers focus on their work.
Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $1.85BN in funding, and building products people love across over 200 cities worldwide.
See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey.
