20 Red-Hot, Pre-IPO companies to watch in 2019 B2B tech - Part 1

Martin Veitch gives his pick of business-to-business companies yet to float

After a hiatus, it's more than time to look again at the B2B tech sector and the most interesting candidates yet to float on the public markets.

The mania for talking about unicorns appears to be dying down, thankfully, but it remains a fact that technology companies continue to be some of the most potentially attractive investments available today. And, even as internet stocks such as Google and Facebook power on, B2B offers some of the biggest beasts and scope for building sustainable businesses. Witness, for example, Microsoft, the elite enterprise software comeback kid, reinvigorated and with its market value pumped up again under the dynamic leadership of Satya Nadella.

It has become a cliché for CEOs to say that an IPO is not an exit or the end to a story but rather a staging post and that if you take care of business the rest will sort itself out. True, no doubt, but the initial public offering remains a crossroads where companies can attract publicity, reward staff and investors, and create a comfort factor for customers and prospects that will happier to do business with a company that has come that far.

This report is not a tip sheet or intended as a series of predictions as to future IPOs. Some of the companies on this list will never make it to IPO and some might have no intention of doing so, but they are companies worth watching nonetheless.

There is no deep methodology other than the fact that these are companies I have deemed interesting based on some combination of market, technology, management, investors, scale of opportunity and ability to address that opportunity. I have avoided companies that have retreated from the public markets, taken private-equity or are the result of recent splits, as these seem to me to live in another category of company.

These are all companies IDG Connect has interviewed; keep in mind that some date back a while. The report provides pen portraits and links back to longer articles. You can see previous reports here for 2014, here for 2015, and here for 2016.


App Annie

Interview: Co-founder Bertrand Schmitt

Founded: 2010

Everybody's an app maker but how do they make decisions on markets to focus on, platforms to sit atop and where to invest next? There's an App Annie for that…

App Annie is a cloud data analytics service that acts as an information source for makers wanting to know about number of downloads, demographic splits, advertising and in-app purchasing.

The App Annie Index has become a big source for the media and analysts but App Annie makes its money primarily from premium subscription customers who pay for a deeper dive, with bells and whistles such as dashboards.

With $156m in VC funding, and tens of millions of dollars in revenue, the focus is on growth and global coverage. An IPO before the end of the decade is plausible if App Annie continues to ride the apps wave.



Interview: Eric Tilenius, CEO

Founded: 2013

BlueTalon CEO Eric Tilenius has a strong track record in Silicon Valley and his experience might help BlueTalon stand out from the horde of infosecurity startups seeking attention in the Californian sunshine.

The company's angle here is securing the data itself rather than the endpoint or the perimeter boundary. That's because we have so many data types, so much mobility and so many end-user devices that old approaches are no longer fit for purpose.

It's certainly the case that there's a changing of the guard in the old security brands and while BlueTalon remains a fledgling it has the chance to follow the likes of Palo Alto Networks and fly higher.

Indeed, the high-concept descriptor for BlueTalon's mission is "what Palo Alto Networks did for network security, we're trying to do for data security". That's an opportunity measured in billions of dollars and if BlueTalon can execute then there will be opportunities aplenty to cash in, whether they come from the highly-active security M&A side or not.



Interview: Founder Peter Agelasto and CEO Richard Averitt

Founded: 2014

For a company that hasn't long been monetising its software for managing content, Digital Relab has a unique and iconic USP: its Starchive system was chosen to host the vast, approximately 60-year old multimedia archive of Bob Dylan.

Starchive is a CMS with a difference. It takes a hands-off view of what file types are being used and makes them discoverable based on relationships items have with each other. Like its best-known customer, it is dense, allusive and of infinite variety.

Digital Relab garnered some media attention over the 2016 announcement that Dylan has given over a trove of artefacts, recordings, film and other materials to a museum that will open soon in Oklahoma, even if it is quite tight on disclosing what part it plays in that venture.

Its near-term future might lie in collecting other riches from artists' histories and other cultural sources, and that's timely given the enthusiasm for collecting the cast-aside recordings of performers reaching the end of their roads. Other customers include the New York Philharmonic and the Studs Terkel Radio Archive. Museums and galleries are other target audiences but the company sees potential for a much wider customer base.

If Digital Relab can find the financial backing to match its early wins then it stands a chance of becoming a player.



Interview: CEO Jaspreet Singh

Founded: 2008

In the battle for technology company kerb appeal, data backup suffers by comparison to most areas, except perhaps for uninterruptible power supplies. But, even if it's not the glamourous side of the business, no sane person doubts the importance of this segment and it's a segment that was overdue some attention. Enter that emblem of change, cloud computing.

Companies like Druva are reinventing backup by tapping AWS and Microsoft Azure cloud infrastructure to offer what the company calls "public cloud backup and recovery". Druva's service has won plaudits for performance thanks to a cunning blend of three Cs: caching, compression and content delivery networking. It also laces in governance routines to meet compliance and security needs.

That combination of value and a broadening information lifecycle management is drawing hard money. Druva recently celebrated six consecutive years of at least doubling revenue and Sequoia, one of the most feted VCs in Silicon Valley, is among those that have helped the company pick up about $198m in funding.


WRLD (formerly eeGeo)

Interview: Founder, Ian Hetherington

Founded: 2010

A veteran of the gaming scene, Ian Hetherington is now bidding to win a high-stakes game in mapping with 3D software and AR/VR visualisation that takes its cues from his experience in that world.

Hetherington has built WRLD to map the physical world so customers can overlay that with whatever they choose. A company that is considering building a new facility can foresee what it looks like, for example, from outside and (here's the killer app) inside. A new employee could see his or her desk and learn the maze of corridors before entering; the visitor to a department store or mall could see shops to visit; a visitor to a city could find places of interest.

Mapping is an interesting phenomenon that can act as the engine for lucrative opportunities such as finding local stores, restaurants and so on. But it's so interesting that it has already bagged the interest of giants like Apple, Google and Microsoft. Rivals will need to differentiate in order to succeed and they will need deep pockets to provide the kind of coverage that's necessary. So far, eeGeo has the differentiation and if it can raise the funds it might find a route to success.

The signs are positive. It has already collected customers such as NTT DOCOMO, Cisco, Samsung, Arup and London's Victoria & Albert Museum.



Interview with VP of Strategy Ray Chohan

Founded: 2007

PatSnap is a company that fills what appears to be an aching void. That is: companies young and old spent fortunes on R&D only to run into legal spats over who has the rights to technologies. PatSnap provides an in-depth resource that stores patents and other relevant information to help steer away from just those knotty problems.

Founded in 2007, PatSnap has a polyglot history with roots in Singapore, a large presence in China and HQ in the UK. That should help it to assist companies all over the world by providing what is effectively a census on global innovation and a guide to market insights.

As well as being a boon for startups, PatSnap will be an aid to lawyers and academics and it has already developed strong domains in life sciences, agriculture, robotics and automotive.

PatSnap founder Jeffrey Tiong was named Entrepreneur of the Year by EY for 2018. Also, last year, a Series D round took the company's total funding to over $100m as it opened its first US office.



Analysis and Interview with UiPath CEO Daniel Dines

Founded: 2005

While the world has obsessed over artificial intelligence and its potential impacts on society, robotic process automation - a related means of removing manual inputs from clerical and other repetitive tasks - has generally not garnered the same sort of obsessive coverage. That, however, might be changing.

The catalyst for that change is financial. One RPA leader, UK firm Blue Prism, carried the banner for pioneers with a rapturously received IPO in 2016. But two firms received vast funding sums in 2018: Silicon Valley's Automation Anywhere picked up $300m in November to take its total financing to over $500m. At about the same time, Romania's UiPath took its total raised to over $265m (in an extension co-led by VC royalty Sequoia Capital) at a valuation of $3bn.

What do these enormous numbers point to? Briefly, we can say that RPA stands to reinvent business process management by inserting an army of soft bots to work in formerly human roles. As has often been noted, these bots don't get tired, ask for holidays, waste time chatting at the water cooler or become disenchanted with their work. Whatever moral dilemmas this poses for society, the companies that become de facto leaders in RPA stand to become very influential indeed.



Interview with Runecast CEO Stanimir Markov

Founded: 2014

Runecast is a company that does work that few outside of IT infrastructure would know or care about, but then the same could once have been said of VMware, which became one of the largest new business IT companies of its time.

Czech Republic-headquartered Runecast arguably has less ambition than VMware but its work on the innards of deep IT is important nonetheless. Runecast makes tools that unravel knots in availability and performance by preventing known issues from impacting operations, mining logs for actionable information and helping to automate security and compliance processes.

Currently, Runecast focuses mostly on VMware environments but its remit will extend over time to oversee other chunky and complex infrastructure elements. If it can execute on that plan then it has a chance to become an important contributor to successful everyday IT automation… even if it remains invisible to most.



Interview with Canonical CEO Mark Shuttleworth

Founded: 2004

Of companies with roots in Linux and open source, Red Hat has emerged as the undisputed leader but Canonical has aspirations to be similarly influential.

And just as Red Hat successfully expanded on its core Enterprise Linux offering, Canonical sees a world of opportunity away from the hundreds of millions of devices that already run the Ubuntu distribution of the operating system.

Behind this ambition is the buccaneering figure of South African Mark Shuttleworth who returned for a second stint as CEO in 2017 and is navigating the company to be at the heart of OpenStack deployments as well as being in the cockpit of the Internet of Things.

His big vision: to bring the elasticity, availability and price points of the public cloud to the private cloud. Doing so would represent another twist in IT deployment models already turned on their heads in recent years. An IPO would help to fund Shuttleworth's ambitions although, as Red Hat has shown, an acquisition shouldn't be ruled out either. 



Interview with Zoom CEO Eric Yuan

Founded: 2011

It has become a standing joke of the technology world that even the most humble conference calls tend not to work reliably. The problem is tricky: line quality, the impact of mobile devices, too many players, platforms, pop-ups and sign-ons…

The company that has arguably gone closest to fixing matters is Zoom and, although it is far from becoming a de facto standard, it has become a reassuring sight on calendar invites, such is its intuitive user interface and ability to deal with suboptimal connections. Most of the time at least, Zoom just works.

The brainchild of a former WebEx staffer, CEO Eric Yuan, the company appears to have a good grip on the root causes of collaboration snafus and if it can fulfil its promise become a modern, better version of WebEx then it will become a very valuable company.

With a healthy amount of VC already raised ($145m) and troubleshooting points of presence globally, this 2011-founded firm has the right calling cards.


Part 2 of IDG Connect's 20 Red-Hot, Pre-IPO companies to watch in 2019 B2B tech will follow next week…