A few weeks ago, we highlighted many of the cool startups that have popped up in New York City in recent years. And now we turn to Silicon Valley.
Over the past few weeks, we’ve asked VCs, angel investors, entrepreneurs, and other tech journalists about their favourite up-and-coming Valley startups. We’ve written about many of these companies before, obviously, and we’ll be writing about many of them again.
In this list, you won’t see companies that have been around for years and raised multiple rounds of capital. Instead, you’ll see the some of the next generation — startups working on ideas so exciting that VCs and angels are lining up to throw money at them.
Check out the 20 hot Silicon Valley startups you need to watch >
We would like to thank Brendan McManus of Startup Digest for contributing to this list, as well as all of the investors and entrepreneurs who provided valuable insight.
Bump Technologies lets you exchange contact info and other data with other people by tapping your phones together
Founders: David Lieb, Andy Huibers, and Jake Mintz
What it does: Bump is pretty simple -- it lets you exchange contact info and other data with other people by tapping your phones together. It partners with other app developers to build that feature into their products.
Why you should watch out for it: For some reason, people can't get enough of how neat this function is. It is built in to PayPal's latest app, and completely stole the show in all the coverage of the app's release. Being tied to PayPal is a huge deal in and of itself, of course. That and the huge number of anachronistic business cards we receive make us think this could be big.
Investors: Y Combinator, Sequoia Capital, Ron Conway, Ram Shriram, Joshua Schachter, Aydin Senkut, Brian Pokorny
Founders: Drew Houston and Arash Ferdowsi
What it does: Dropbox is a tool that helps you sync your files across all the computers and other devices you use. It also backs up everything in the cloud, so you can access anything from any web-enabled device.
Why you should watch out for it: More people we talked to mentioned Dropbox than any other startup. The service already has 4 million users.
Investors: Y Combinator, Sequoia Capital, Accel Partners
Founders: Evan Cooke, Jeff Lawson, and John Wolthuis
What it does: Twilio makes APIs that let web developers integrate the ability to make and receive phone calls and text messages into their apps.
Why you should watch out for it: Twilio's competitors are mostly enterprise services. Twilio is cheap, and lets developers build simple phone functionality into their products with just a few lines of code. Tumblr uses the service, as have some major brands (Sony, Cheetos).
Investors: Mitch Kapor, David G. Cohen, Manu Kumar, Dave McClure, Union Square Ventures, The Founders Fund
Founders: Oliver Roup and Rodrigo Leroux
What it does: VigLink handles all of the busy work around using affiliate links to products on sites like Amazon. These links give referring publishers a small commission on completed sales. Once a publisher signs up with VigLink, converting standard links to the special links needed to track these referrals is entirely automated.
Why you should watch out for it: There is an absolutely massive volume of web content that could theoretically include affiliate links, but whose creators can't be bothered. Unless you expect to drive a good deal of traffic to a product, setting up affiliate links is more trouble than it's worth. If VigLink -- or one of its competitors -- can change that dynamic in exchange for a slice, it could be huge.
Investors: Google Ventures, First Round Capital, Reid Hoffman, Deep Nishar, Hadi Partovi, Ali Partovi, Carlos Cashman, Micah Adler
Worldly Developments's Plancast lets you create location-based plans for future events and activities
Founders: Mark Hendrickson, Jay Marcyes
What it does: Worldly Developments is the company behind Plancast, which lets you create location-based plans for future events and activities, collaborate with others around them, and publicize them on Facebook and Twitter.
Why you should watch out for it: Plancast combines some of the appeal of location networks like Foursquare with the practical value of event management tools like Evite. It could easily be crowded out from either direction, but there's definitely a big opportunity here.
Investors: fbFund, SoftTech VC, True Ventures, The Founders Fund, Zelkova Ventures, Dave McClure, Aydin Senkut, Saul Klein, David Cohen, Joshua Schachter, Dan Martell, Ron Bouganim, Paige Craig
SimpleGeo provides the infrastructure to allow app developers to add location-aware functions with ease
Founders: Matt Galligan and Joe Stump
What it does: SimpleGeo provides the infrastructure to allow app developers to add location-aware functions with ease.
Why you should watch out for it: Even if you're sceptical of the location app craze, there can be no doubt that a lot of developers will be betting on it, so SimpleGeo won't have a hard time finding customers in the short term. If geo data sticks as an important feature for a wide range of apps, these guys will be in great shape.
Here's SimpleGeo's neat visualisation of all of the check-in activity at SXSW this year:
Investors: Ron Conway, Kevin Rose, Chris Sacca, Redpoint Ventures, Joshua Schachter, Debbie Landa, Tim Ferriss, Shawn Fanning, Gary Vaynerchuk, David Lee, Freestyle Capital, First Round Capital, David G. Cohen
Founders: Jude Gomila and Immad Akhund
What it does: Heyzap -- often described as 'YouTube for casual games' -- lets web publishers embed games on their sites. It has its own platform for virtual goods and microtransactions.
Why you should watch out for it: Just about any website can offer up games effortlessly; publishers keep 15% of ad and transaction revenue. It's a killer business model and has seen some strong adoption numbers so far.
Investors: Union Square Ventures, Naval Ravikant, Joshua Schachter, Christina Brodbeck
Founder: Brad Inman
What it does: 'Vook' is a portmanteau 'video' and 'book', which tells you more or less what the company is all about. Vook offers web and mobile platforms for offering up a blend of text and video content. Launched last fall, the company already has partnerships with some big book and magazine publishers.
Why you should watch out for it: Brad Inman has a strong track record, and the most natural home for this sort of content -- tablet devices like the iPad -- is about to explode. If the world wants a new hybrid medium like this, this is the time for it.
Investors: Ron Conway, Baseline Ventures, Founder Collective, Floodgate, Ken Lerer
Founders: Jeff Smith, Ge Wang
What it does: Smule is the iPhone app developer behind Ocarina, which lets you use your gadget as a wind instrument by blowing into the microphone, and I Am T-Pain, which brings auto-tuning technology to the masses.
Why you should watch out for it: Smule doesn't have a specific focus that sets it apart from the crowd in app development, but over its short life it has a great record of impressing with each weird new project.
Investors: Bessemer Venture Partners, Granite Ventures, Floodgate, Shasta Ventures
Founders: Dave Garr and Darrell Benatar
What it does: UserTesting provides crowdsourced product testing for websites. The company matches up publishers with web users within specified demographics who provide video recordings of their interaction with sites.
Why you should watch out for it: Publishers can get feedback on new features within hours of implementing them; web surfers can get paid to screw around on the Internet. Start typing 'UserTesting.com' into a search bar and you'll see autocomplete suggestions like 'is UserTesting.com a scam?'. The answer is no.
Investors: No publicly announced funding.
Founders: Sam Christiansen, Keith Lee, and Brian Morrisroe
What it does: Booyah is the developer behind MyTown, an incredibly successful iPhone game. MyTown has stayed in the news recently on the strength of its geo component, because it has much more impressive adoption figures than Foursquare or its competitors. That's mostly a head fake, though, as MyTown doesn't have much in common with those networks. It's more like a Zynga game for your phone.
Why you should watch out for it: Being compared to Foursquare is great for attracting media attention, but actually being like Zynga is great for making money. MyTown is already raking in cash from microtransactions. Booyah's founders are Blizzard alumni with experience in the Diablo and World of Warcraft franchises, so if turning this sort of game into a richer experience ends up proving economical, they'll be well positioned.
Investors: Kleiner Perkins Caufield & Byers
Founders: Guangwei Yuan, Pasha Sadri, and Jianing Hu
What it does: Polyvore's users put together and show off 'outfits' by bringing together clothing and related products from different places on the Internet.
Why you should watch out for it: There is no shortage of people who think they have important contributions to make to the world of fashion, and having people encourage each other to spend more money on clothing is good business.
They were also just written up in -- of all places -- the New Yorker.
Investors: Benchmark Capital, Harrison Metal Capital, Matrix Partners
Founders: Jim Ambras and Rob Ellis
What it does: NotchUp is 'A crowd-sourced lead generation platform on top of social networks (currently focused on LinkedIn).'
Why you should watch out for it: NotchUp is premised on the notion that there is a key, unexploited space for apps on top of professional networks, analogous to the space in which companies like Zynga operate on social networks. There is a lot of value in improving these networks as recruiting tools, and we certainly expect someone to make a lot of money doing something like this.
Founders: Dan Greenberg, Rob Fan, Brett Keintz, and Matt Monahan
What it does: Sharethrough helps brands distribute and promote viral marketing videos.
Why you should watch out for it: This is obviously a crowded space, but it's also one that is still growing. An investor tells us 'they have generated millions of brand endorsements across more than 200 campaigns for more than 100 national brands including Activision, Sony, BMW, Audi, Nestle and Microsoft.'
Investors: Ron Conway, Floodgate, Baseline Ventures
Founders: Isaac Hall and Tim Van Loan
What it does: Recurly makes it easy for companies to offer subscription fee based Internet services. There is plenty of competition, but most of it is expensive; Recurly doesn't charge any monthly flat fee, making all of its money by taking a percentage of transactions.
Why you should watch out for it: Its relative ease and affordability make Recurly an attractive option for startups. Its still in closed beta, but it already has a few promising clients; if some of them start blowing up, so will Recurly's revenue.
Investors: Dave McClure
Founders: Jon Wheatley and Ryan Amos
What it does: DailyBooth is a photoblogging platform and social network. Users post photos of themselves along with updates on what they're up to. You can follow other DailyBoothers, much like on something like Twitter.
Why you should watch out for it: We don't actually see the appeal ourselves, but there's no denying the growth and level of engagement. The site is just over a year old and has already hit 3 million photos. Investors love it.
Investors: Y Combinator, Sequoia Capital, Betaworks, SV Angel, Kevin Rose, Caterina Fake, Ron Conway, VaynerMedia, Brian Pokorny, Lowercase Capital, Felicis Ventures, Joshua Schachter
Founders: Neil Patel and Hiten Shah
What it does: KISSmetrics provides analytics tools, focusing on 'the conversion funnel' -- the steps a user takes leading up to completing a transaction or signing up for something.
Why you should watch out for it: KISSmetrics is in closed beta, so we're relying on word of mouth, investor interest, and the experience of its team and advisors.
Investors: Polaris Ventures, True Ventures, SoftTech VC, Felicis Ventures, Dave McClure, Shervin Pishevar, and Bobby Yazdani.
Founders: Brian Phillips, Katherine Woo, Skye Lee
What it does: Sofa Labs creates services built on top of existing social networks like Facebook. Its first two products, Frintro and Thread, are both built using Facebook Connect and focus on introducing people to friends-of-friends.
Why you should watch out for it: An emphasis on friends-of-friends and the links connecting you to other people was a popular aspect of the social networks that didn't make it, like Friendster. Facebook's tighter privacy controls did away with this, but it makes sense for a third party to bring it back. The team is flush with ex-PayPal talent.
Investors: fbFund, First Round Capital, Sequoia Capital, fbFund, Ron Conway, David Sacks, Auren Hoffman, Reid Hoffman, Joe Greenstein, Shervin Pishevar, Saran Chari, FF Angel LLC
Founders: Rob Goldman and Udi Nir
What it does: Threadsy is a tool for aggregating and organising communications from all of your email accounts, instant messaging clients, and social networks.
Why you should watch out for it: There is no shortage of people trying to do things very like this, but that's because it desperately needs doing. A few winners in this space could get huge.
Investors: August Capital and Harrison Metal Capital
Founders: Eddie Lim, Alex Rampell, and Terry Angelos
What it does: TrialPay is an 'alternative e-commerce system' that lets people get products and services for free by agreeing to purchase something else from a list of vendors.
Why you should watch out for it: Founded in 2006, TrialPay is just about too old and well funded to be on this list, but the enthusiasm for it was too great for us to leave it off. VCs who aren't in on it wish they were, and there's still plenty of room for TrialPay to get bigger.
Investors: Baseline Ventures, Battery Ventures, Index Ventures, Bob Pittman, Ron Conway, Skype, Google, Atomico Ventures
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