The quality of local startups in a region can often indicate the future of a tech ecosystem.
To find out what the future may have in store for the Pacific Northwest, we analyzed companies that recently joined the GeekWire 200, our ranking of privately held startups in the area. The results offer a glimpse into both the current and emerging strengths that the region has to offer.
Chris DeVore, managing partner at Seattle-based early-stage venture capital firm Founders’ Co-op, thinks the most important factor that drives successful startups is talent. “The first question is, what are we uniquely good at?” he said.
Over the past year, 33 companies have joined the list and nearly a third of them sell business software, building on a strong local enterprise acumen buoyed by Microsoft’s longtime presence and other B2B companies.
But there are are other sectors — such as real estate, internet-of-things and health technology — that are producing strong startups as of late.
Newcomers on the list also mimicked the region’s other interests. There was a craft beer delivery startup, Tavour (No. 163) and a marijuana comparison startup, Wikileaf (No. 170). Two coding education startups — Data Science Dojo (No. 152) and Educative (No. 98) — also joined the GeekWire 200, another example of the region’s technical acumen.
Business software reigns supreme
Given the region’s historic wealth of enterprise talent, it should come as no surprise that business software companies in the Seattle area continue to pop up. In the past year, nine new such companies made the GeekWire 200. Overall, software companies comprise nearly a quarter of the list, a share that stayed consistent from year to year.
Here’s a rundown of the newcomers, who make everything from event technology to sales software.
- Eventbase (No. 44), an event technology company
- Checkfront (No. 84), reservation software for tours, activities, rentals and accommodations
- Ekata (No. 101), identity verification software
- ModusBox (No. 139), digital transformation and payment software and services
- Replyapp.io (No. 143), sales automation software
- Traction Guest (No. 146), a cloud-based visitor management service
- Fulcrum Software (No. 165), software to track and manage network equipment infrastructure
- PTO Exchange (No. 187), a platform for employees to exchange unused paid time off
- Stackline (No. 199), a data analytics service for e-commerce companies
“The depth of our engineering population and the diversity of the engineering population has just gotten stronger and stronger over the last 10 years,” said DeVore, adding that the growth is owed to the robust cloud teams built in Seattle by Amazon’s AWS, Microsoft Azure and Google Cloud.
Real estate technology holds strong
Three real estate tech companies — Flyhomes (No. 89); Loftium (No. 182); and Knock (No. 185) — made the list, growing the total number of real estate tech startups from four to seven. There are also a handful of other startups on the list building tech tools in related industries such as home improvement. We highlighted the growing real estate presence on the GeekWire 200 last year.
The success of Zillow and Redfin has created the talent pool necessary to support new startups, said Rebecca Lovell, executive director of Create33, a “founder center” created by Madrona Venture Group. The red-hot commercial and residential real estate market in Seattle has also helped, she added.
Flyhomes helps people buy homes by putting down cash offers while the would-be homeowner secures financing. That puts it in competition with Seattle-based real estate tech leaders Zillow and Redfin, who are also in the home-buying business. Flyhomes raised $141 million earlier this year to fund its efforts.
Knock takes a page from the business software book, providing a platform that helps property managers communicate with renters and handle requests. Loftium’s pitch is a bit more out of left field: the startup rents apartments from landlords and then leases those units out to its customers, who receive discounted rent in exchange for hosting Airbnb guests. Loftium receives rent from its customers and a share of the Airbnb revenue.
Buzzy entrants: VR, AR and IoT
Several startups from tech’s buzziest sectors made the GeekWire 200 in the past year.
Iotas (No. 178) is focused on creating smart home devices for renters; Buddy’s (No. 189) platform handles data collected by IoT devices; and Xnor.ai (No. 171) has a product that allows developers to run AI locally on edge computing devices.
The GeekWire 200 also welcomed three virtual and augmented reality startups. Spokane, Wash.-based Gravity Jack (No. 174) helps companies build custom AR experiences; Portland, Ore.-based Torch 3D (No. 196) makes software that helps users build 3D prototypes in VR/AR; and Seattle startup Pixvana (No. 200) develops VR storytelling software and experiences.
“The early days of AR/VR saw early adopters on the consumer side, but may have been considered too bleeding edge for enterprise adoption out of the gates,” said Lovell. “We’ve been interested to see AR/VR technology being used as a tool for enterprise.”
Last but not least, three health technology companies joined the GeekWire 200, bringing the total number of healthcare startups to 15.
Aduro Healthcare (No. 40) makes employee benefits software, taking advantage of both developer talent and life sciences know-how in the region. EndoGastric Solutions (No. 112) and Ventec Life Systems (No. 178) build on the region’s long-running medical device expertise with a portable ventilator and a way to treat gastroesophageal reflux disease without cutting the skin.
The region’s longest-running sectors are likely to continue producing promising new companies, but there are also signs that the breadth of industries represented by startups is growing.
“The trend we’ve been seeing is increased diversity in the sectors of the startups approaching us for funding, as well as the increasing diversity of our angels’ backgrounds,” said Yi-Jian Ngo, managing director at Alliance of Angels.
“We are starting to see other industries starting to apply tech to their digital transformations. We see it for lawyers, we see it for doctors, we see it for farmers, we see it for logistics shipping companies, we see it for the travel industry, we see it for fashion,” said John Sechrest, founder of the Seattle Angel Conference.
Other startup leaders pointed to logistics and blockchain as future potential hotspots for the region.
Daniel Li, a principal at Madrona, recently looked at how early funding deals for Seattle startups compared to the national trends, using data from PitchBook. “Sectors like AI, healthcare, and blockchain have all seen significantly more seed deals than five or ten years ago,” he wrote.
And while Microsoft has helped spur enterprise-related startup creation, Seattle’s other tech giant — Amazon — could do the same for logistics companies.
“Amazon is the global leader in multimodal logistics for obvious reasons,” said DeVore. Convoy, a Seattle trucking startup valued at more than $1 billion, may just be “the tip of an iceberg that I would expect to see more energy around in future years,” he added.