The TOP Funded Startups of 2020

What are the top funded startups though?

Let’s explore the superstar companies in 2020.

Those companies have a bright future ahead of them:

An image with the top funded startups in 2020.

Here we go:

TOP Funded Startups in 2020 

1. JUUL Labs – $13,561.5 million

2. Infor – $4,133 million

3. Magic Leap – $2,633.5 million

4. Epic Games – $1,595 million

5. DraftKings – $727.6 million

6. Avant – $655 million

7. Kabbage – $498.95 million

8. Privia Health – $432.84 million

9. SmileDirectClub – $426.7 million

10. Welltok – $339.43 million

11. Vox Media- $324.65 million

12. Remitly – $312.27 million

13. IO Data Centers – $311 million

14. WP Engine – $289.77 million

15. InsideSales.com (Now Xant) – $264.3 million

16. Jama Software – $233 million

17. Cedar Gate Technologies – $220 million

18. SevOne – $203.5 million

19. C2FO – $199.68 million

20. Upserve – $191.45 million

Now:

We’ve narrowed down the top twenty startups by equity funding for 2020.

Spoiler alert:

Some of the names might surprise you.

First things first, though:

What Is Equity Funding?

Investor funding can take a few different forms. There are several broad categories when it comes to these financial investments:

  • Debt Capital: As the name suggests, this is money the company borrows. The investors will expect the company to repay the full amount with interest.
  • Equity Funding:  In this case of startup funding, the investor is buying a stake in the business. This could be in the form of stock, ownership of one area of operation, or part ownership.
  • Venture Capital Deals: These often end up being a hybrid of the previous two options. The venture capitalist may lend the company and require a stake. But they may also request that the funds be paid at a set future date.

In many respects, equity funding is easier for businesses. They get the capital they need without a creditor breathing down their neck. Additionally, they don’t have debt and interest payments to contend with early in the game.

The downside is that the new investor has some say in the company. How much depends on the original agreement.

Why Is Equity Startup Funding Important for Investors?

There are no guarantees in the business world. But taking a look at the equity investors of a project can provide valuable insight.

Here’s why:

First, equity investments show that investors believe in the project. They’re in it for the long haul.

Second, if some of the big names in the business world have invested, you can see the confidence that the business community at large has in the project. If you see that an enterprise like Google or Microsoft has invested a significant sum, there’s a good chance the startup has potential.

How to Find Startup Companies to Invest In?

Every investor dreams of the day when they find the next unicorn in the making. If you hope to be one of those investors, research is your best tool. The better you know the markets that you’re investing in, the better the decisions you’ll be able to make.

Here’s how to go about it:

Start by keeping an eye on the top blogs, trade magazines, and news sites related to the industry you’re interested in. If you’re interested in tech, for example, find out what the top tech startups are doing. What are the gaps in the market? What forecasts are industry experts making?

Don’t forget that there are many aspects to the industry to consider. Your tech startup is going to need a range of secondary services to operate efficiently. These services include collecting payments and shipping.

Now:

This is important:

Keep an eye on those secondary industries because advances there could change things for the primary sector as well. Take IoT, for example. Startups in California and around the world already had the necessary skills to make IoT a reality a while ago.

But:

For one company to run a secure server to support every product it produces is prohibitively expensive. So, while IoT was a great concept in theory, it wasn’t practical. That is, until we started to learn more about blockchain tech. Some of the most valuable apps in the world have been developed to support existing products.

Today, there is a way to create a worldwide, secure network that could help us manage our IoT devices at a low cost. What’s even more exciting is that because no single company foots the bill for the infrastructure required, the barriers to entry are lower.

Now:

Naturally, you have to go beyond the buzz and dig deeper. New tech startups could have an outstanding idea. But that doesn’t mean they have a way to execute it. Even if they have a working prototype, they might not be able to make it profitable.

This is where research comes in.

Try to come up with in-depth answers to the big questions:

Does the idea seem plausible? Is it really necessary? Is it an idea the market will accept? How easy is it for clients to switch to your product?

You’re far more likely to find your best startup investment through thorough research than sheer luck.

Finally:

Consider the team that is running the company. Do they have the experience necessary to make this business workable? A group of designers, for example, might be skilled at designing the perfect smartwatch. But will they be able to work out the more tedious aspects like pricing, the daily running of the business, and so on?

News flash:

The startup map is littered with half-baked and hare-brained schemes.

Why?

Because no one asked the difficult questions at the very beginning, when it really mattered. Everyone on the team was so enthusiastic that they thought they’d easily find a way.

But as an investor, you need something more concrete than a can-do attitude. Make sure that any company you’re investing in has a clear plan of how they’ll build and boost their business.

How Does Tech Startup Funding Work?

Thirty or forty years ago, if you had a business idea, you’d go to the bank and apply for a loan. They’d assess your business idea, ask for collateral, and then give you the financing you asked for. If you didn’t have collateral, you didn’t get the loan. Simple as that. It was good to be able to get all your capital up front.

Today, though, this might not be the best idea. As the top technology startups will tell you, things don’t often go to plan. Perhaps they can’t get beyond a particular design stage, and the project needs to be axed. They end up with no product and no way to pay off their creditors.

Or maybe things are going well, but they’re running into cost overruns. With traditional lending, that would have been the end of it. Finally, if they did exceptionally well, and needed to up production, traditional financing might still have been hard to obtain.

The thing is:

With modern investing, we have access to a lot more options. Most startup funding is conducted in different stages. The company will raise its seed money in the first round, which would give it enough money to get to the next step.

Then:

When they need more money, they can start another round of funding. They might even be able to make more in the second round because they have proof of concept. Over time, the company will run more rounds of fundraising.

Which brings us to:

What Is Series D Funding?

These are usually the final rounds of fundraising, usually the fifth and sixth.

Where’s the Best Place to Look for Startups?

There seems to be an impression out there that Silicon Valley is the ideal place for finding a trendy new startup to invest in.

Ask the question:

“What are the best states for startups?”

Almost everyone is going to mention California.

But don’t be too hasty:

Many US college graduates are opting for the Big Apple instead of the Bay Area for better opportunities.

Our advice?

Don’t settle on just one area. Look at the recent fallout when Chinese company Huawei beat everyone to the post in the 5G arena.

If you’d been focused on Silicon Valley alone, you’d have missed this as an investment opportunity. That’s where our list comes in.

Our Top Twenty List of Successful Startups

These companies have attracted billions in funding. Make way for the new stars on the startup scene!

1. JUUL Labs

(Source: CB Insights)

Total Equity funding: $13,561.5 million

This California-based startup has caused some serious media buzz since breaking away from Pax Labs in 2017. What makes the company a favorite is that it offers e-cigarettes with nicotine salts. This more closely replicates the experience that you get from a real cigarette.

Altria, one of the world’s largest cigarette producers, bought a significant stake in the company in the company in 2018. This raised the valuation of the startup to a massive $38 billion. It’s currently considered one of the top US startups.

2. Infor

(Source: CB Insights)

Total Equity funding: $4,133 million

This New York-based startup has been making waves ever since it was founded in 2002. The company’s decision to focus on niche software in 2010 has helped it skyrocket its profits into the stratosphere.

Infor offers cloud-based solutions that are designed with a specific niche in mind. The company received a $1.5 billion investment in January 2019. This sparked speculation of an IPO being in the offing. According to Tech Crunch, the company’s valuation could reach $60 billion. Funding for startups in the USA tends to be generous, and Infor is a prime example of that.

3. Magic Leap

(Source: CB Insights)

Total Equity funding: $2,633.5 million

This Florida-based company got its start in 2010 and made a big splash in the augmented reality industry with Magic Leap One. This retinal display device you wear on your head superimposes a computer image over items in the real-world.

Think of the glasses that the McFlies wore in the cult movie Back to the Future II. Now put a fresh and modern twist on them, and it becomes clear why Google and other investors were willing to put in $540 million. The company’s innovation is proving them one of the most valuable startups on this list.

4. Epic Games

(Source: CB Insights)

Total Equity funding: $1,595 million

This North Carolina-based company has made significant advances in the gaming industry since its inception in 1991. It produces a range of games but has received accolades for its innovative gaming engine.

Being awarded the Guinness World Record for the most successful game engine in 2014 contributed to the company’s 2018 incredible valuation of $15 billion. Which is why epic Games registers as one of the biggest startups on this list.

5. DraftKings

(Source: CB Insights)

Total Equity funding: $727.6 million

Draftkings has stirred up a fair amount of controversy since being founded in Massachusetts in 2012. Before the US Supreme Court declared PASPA unconstitutional in 2018, sports betting was illegal by federal law.

Draftkings overcame this by offering contests and fantasy sports betting. This is not considered gambling because a certain amount of skill is involved. The company turned heads by spending more on advertising in 2015 than it earned in 2014.

The move proved to be a winner thanks to the change in legislation. The company is now valued at up to $10 billion. This makes it one of the most profitable startups on our list.

6. Avant

(Source: CB Insights)

Total Equity funding: $655

This Illinois-based lender was founded in 2012. The founders aimed to transform the lending industry through the use of technology by offering small to medium loans of $2 000 to $35 000 to borrowers with lower credit scores.

They also provide software that allows financial institutions to make smart lending decisions. Thanks to the innovative nature of the product, the company took just under three years to reach unicorn status. Thanks to the $325 million raised in the 2015 funding round, the company was valued at $2 billion. It’s been growing from strength to strength since.

7. Kabbage

(Source: CB Insights)

Total Equity funding: $498.95 million

Number seven on our list of top funded startups, this Georgia-based startup was founded in 2009. It’s also a lender that aims to change the credit industry. The company created an innovative lending program to automate the entire process. It promises to approve or decline business loans of up to $250 000 in a mere ten minutes.

2019 has been an exciting year for the company. It secured a $700 million securitization deal in April to develop its AI platform.

And that’s not all:

Since then, it’s raised another $200 million on the back of a revolving credit facility. At its last valuation, the company was valued at $1.2 billion. Additionally, Kabbage has been voted as one of the best startups in the world to work for.

8. Privia Health

(Source: CB Insights)

Total Equity funding: $432.84 million

This Virginia-based company has been termed an industry disruptor since it launched in 2007.

The concept is simple:

Privia Health has created a network of healthcare practitioners with a focus on disease prevention. It provides the technology to manage the network effectively so doctors can focus on their patients. Its last post-money valuation was between $500 million and $1 billion.

9. SmileDirectClub

(Source: CB Insights)

Total Equity funding: $426.7 million

Next on our list of top funded startups comes a Tennessee-based company which came up with an interesting proposal in 2014. The idea was to make straightening your smile more affordable.

Cheeky!

SmileDirectClub coined the term “digital dentistry,” as clients use a kit to create their teeth impressions. Realignment devices are created from this process.

This DIY option has skyrocketed the company’s value to a whopping $3.2 billion.

10. Welltok

(Source: CB Insights)

Total Equity funding:  $339.43 million

This Colorado-based SaaS company has been changing the way we receive customer rewards since 2009. Its cloud-based program has earned it a valuation of $625 million because it allows businesses to manage reward programs more easily. One of the most exciting recently funded companies certainly deserves a pat on the back.

11. Vox Media

(Source: CB Insights)

Total Equity funding: $324.65 million

This company was founded in DC in 2005. Since then, it’s taken the media world by storm. NBC was so impressed that it invested $200 million. This brought the market valuation of the Vox Media to a cool billion bucks.

Fun fact:

That’s about half of what The New York Times is valued at. Considering that the newspaper was founded in 1851 and has been publicly listed, Vox Media is doing exceptionally well.

12. Remitly

(Source: CB Insights)

Total Equity funding: $312.27 million

This Seattle-based company was founded in 2011, offering cheaper and faster alternative international payment solutions, takes the twelfth spot on our top funded startups list. You’d be forgiven for wondering what all the fuss was about. The answer is that these solutions include mobile phone payments. You can also send money without a registered bank account to send it to.

Still think it’s no big deal?

The market disagrees:

Remitly is now worth an estimated $1 billion. In fact, according to the World Bank, it’s companies like these that could help reduce poverty around the globe.

Why? Because they make it cheap and easy to get aid money to the people who need it. People who may not have access to traditional banking systems.

13. IO Data Centers

(Source: CB Insights)

Total Equity funding: $311 million

This is an Arizona company that started in 2007. The company introduced the concept of modular call centers. This allows companies to build the data center they need with extra capacity built in to make things easier later.

As one of the top tech startups, IO Data Centers was sold to Iron Mountain, which is one of America’s large companies in 2017, for $1.3 billion and now functions as its subsidiary.

14. WP Engine

(Source: CB Insights)

Total Equity funding: $289.77 million

Crunchbase bills this Texas-based company as the world’s top WordPress digital platform aimed at improving the client’s experience. The create digital plugins and modules that make managing your WordPress site a lot easier.

From humble beginnings in 2010, the company now serves more than 85 000 clients in 140 countries.

Still not impressed?

Check this out:

5% of people online visit sites built on this platform. Its popularity explains why one of the best startups in the world was valued at between $500 million and $1 billion in 2018.

15. InsideSales.com (Now Xant)

(Source: CB Insights)

Total Equity funding: $264.3 million

This Utah-based firm was started in 2004. It offers a unique solution that enables revenue acceleration, which has an AI engine built into it. The software integrates the information from the various sales and CRM programs that you use. Additionally, it identifies and prioritizes the most promising leads and tells you who to contact first.

During its last round of fundraising in 2017, the company netted $50 million and was subsequently valued at $1.5 billion. What’s even more interesting, though, is that Microsoft made a significant investment as well. This sparked rumors that Microsoft might want to buy the company.

16. Jama Software

(Source: CB Insights)

Total Equity funding: $233 million

Coming up next on our list of successful startups, this Oregon-based firm founded in 2007 has been turning heads for its innovative design, management, and testing platform. This allows companies to track the product through every stage of its lifecycle.

And it seems that the market is responding. The platform’s adoption rate grew by 80% between 2017 and 2018. It looks like the sky’s the limit for this innovative company.

17. Cedar Gate Technologies

(Source: CB Insights)

Total Equity funding: $220 million

The Connecticut company which launched in 2014 is tackling inefficiency in the healthcare industry. This software, as a service company, offers solutions for healthcare providers and insurers. The innovative approach has landed Cedar Gate Technologies a place amongst the top-funded startups. The system uses sophisticated methodologies to allow:

  • Forecasting
  • Performance Management
  • Contract modeling
  • Patient loss ratios to be measured
  • And a lot more besides.

The company has processed $91 billion claims through its platform and saved clients a mind-blowing $4.2 billion by identifying potential improvements.

18. SevOne

(Source: CB Insights)

Total Equity funding: $203.5 million

This Delaware firm offers a revolutionary platform that monitors infrastructure digitally. What makes it special is that it’s the only one that is both fast and scalable. A $60 million round of fundraising saw the company valued at a neat $1 billion.

That’s not bad for a business that started in 2005. What’s even more interesting is that in November 2019, Turbonomic bought the company. Details on the ground are slim, but it’s clear that Turbonomic values its new acquisition.

19. C2FO

(Source: CB Insights)

Total Equity funding: $199.68 million

This Kansas-based startup, which claims the penultimate spot on our list of top funded startups, is heading for the stars. In July 2019, it was valued at between $1 billion and $10 billion. Not bad for a company that is just 11 years old, is it? Especially when you keep in mind the innovative factoring program that it uses to help businesses free up working capital.

And here’s another lesson for you:

Equity capital is not the only predictor of success. This is one of the highest valued private companies on our list. In terms of equity capital, though, it’s quite far down. That’s why you must do your research.

20. Upserve

(Source: CB Insights)

Total Equity funding: $191.45 million

This Rhode Island company has been one to watch since its inception in 2009. Forbes has listed it as one of the more promising companies in the country. Thanks to a large investment from Vista Equity Partners in 2017, this company has started to skyrocket.

It offers a unique POS and administrative system. With this system, you have access to more analytics than you probably know what to do with. Upserve might be bottom on our list at the moment, but it will certainly move up the rankings over time.

Final Notes

That brings our list of the top-funded startups to a close. Now you know precisely what some of those unicorns look like and can look for one for yourself.

Remember, the more research you do, the better the results that you get. Happy hunting!

ABOUT AUTHOR

Fiona worked in the retail banking industry for 16 years. She felt that she could put her experience to good use in helping small businesses grow. Web writing was a great fit and sparked a new career for her. She believes that her flexible working schedule gives her more time to spend painting. She loves being at home all day with her schnauzers and her cat. For Fiona, it's furbaby Friday every day of the week.

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