What will be the next household-name app-based service like Uber? Where are the next “unicorns” – startup businesses which rapidly rise to a $1bn valuation?
The biggest successes of the last few years have all been about software. “There’s an app for that” has gone from being an Apple slogan to a simple truism. But the low-hanging fruit has been picked, and what’s left is much tougher to deliver. It may be expensive to build, pose a tricky technical problem, or simply have some strong incumbents fighting back.
There are revolutions ahead: virtual reality, artificial intelligence, autonomous vehicles and wearable technology are all in their early days. None are yet polished enough to really seize the imagination of users – or even to have been released. Any one of them could prove to be as revolutionary as the smartphone was, opening up new avenues of innovation and, in turn, bringing the startup ecosystem back to where it was in 2010. Just not quite yet.
There are still some companies, however, that are making waves right now. They include:
Financial technology, or “fintech”, is one of Britain’s best hopes for a worldwide hit, and TransferWise is one of Britain’s best fintech companies. Founded in 2010 by entrepreneurs Taavet Hinrikus (the first employee of Skype) and financial consultant Kristo Käärmann, it aims to undercut the foreign exchange market with an innovative peer-to-peer model. Instead of buying and selling currency directly, it aims to match pairs of sellers who each want the other’s currency, transferring the money directly and skipping brokers’ fees.
The company’s valuation of just under $1bn places it firmly in the big league – even if its actual revenue is reportedly just £6.5m.
A lot of British success stories exist in local industries where international competition is more difficult – like food delivery and real estate listings. Of course, that doesn’t mean there isn’t local competition, and the home delivery market is one of the most cluttered of them all: Hungryhouse, Just Eat and DineIn are all doing battle to bring your dinner to your door. But there’s a wide variety of approaches, from JustEat, which focuses on providing a simple web-based order and payment portal for traditional takeaway restaurants, through to Deliveroo, which uses its own staff to transport food from restaurants that otherwise wouldn’t offer to deliver.
Deliveroo was founded by William Shu, an investment banker, and Greg Orlowski, a developer, and raised £127m development cash in three funding rounds over the course of last year.
The online designer furniture retailer is one of a few trying to become the Asos of furniture. Asos proved that a good shopping experience, plus big savings over high street prices, could successfully sell clothes, and Made.com is attempting to do the same for tables and chairs. It handpicks furniture designers and passes orders from customers on in bulk. The company was founded in 2009 by serial entrepreneur Ning Li, who had previously started flash sale business MyFab, and Lastminute.com’s co-founder Brent Hoberman. It is regularly linked with a plans for a stock exchange float that could value it at £100m.
FarFetch specialises in designer clothing and grew out of an offer by founder José Neves to provide a free website for small boutiques to sell online, in exchange for the same products being available on FarFetch’s own platform. That gave it the stock it needed to become a destination in its own right. Now sales on the platform have become a lifeline for many smaller boutiques. It raised £59m in March 2015 – taking its valuation to $1bn and making it one of Britain’s newest “unicorns”.
App development is no longer seen as the road to riches, mainly because few people are willing to pay more than a couple of pounds for a smartphone app, users expect free updates for life and there’s always the risk that one of the bigger tech companies will barge in and do it for free. But CityMapper, founded by Londoner Azmat Yusuf in 2010, is so good at doing what it does – help users navigate the public transit networks in almost 30 cities, from London to Tokyo – that it’s survived head-to-head competition with Apple and Google.
“Discovery” is the holy grail of social media: find the way to put the best content in front of users when they log in, and you can guarantee they’ll come back for more. But the best experience hasn’t come from Facebook’s news feed, or Twitter’s disastrous “Discover” feature. Instead, it’s Nuzzel, a small startup from the creator of one of the first social networks, Friendster. It scans your Twitter and Facebook feeds, finds the best things shared among your network, and gives them to you in a handy digest. That’s something that a lot of apps have promised, but few have pulled off so elegantly. The biggest question about the service is: why hasn’t Twitter bought it?
Five years from now, we may be looking back on 2016 as the year virtual reality changed the world in the same way mobile changed the world in 2008. Until the three major platforms launch this year (from Facebook, Sony, and Taiwanese manufacturer HTC), it’s anyone’s guess as to how they will develop. Gaming will be the immediate focus, but Jaunt is hoping to dominate non-gaming activities. A cinematic VR company, it builds hardware and software for directors to shoot immersive movies, which can be played at home on consumer headsets. The prospect of VR storytelling has split the creative community, Pixar co-founder Ed Catmull being one of the loudest voices against the technology. But if it takes off Jaunt, with an executive team drawn from Flipboard and Lucasfilm, hopes to provide the tools required.
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