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The Boston Consumer Tech Year In Review

Rob Go
December 28, 2011 · 3  min.

I was reflecting on this post last week about the state of consumer web in Boston and shared a few of my thoughts in the comments.  It got me thinking about this past year, specifically around consumer tech in Boston.  Perhaps it’s been missed by most, but I think it was a remarkable year for this sector within this market.  And that’s true pretty much across the board – from exits, late stage financings, scaling companies, and seed activity.  It’s great to see, given that New England is one of our core geographies at NextView, and over 50% of our investments are targeted at the consumer sector (though not all by any stretch). So I thought I’d jot down some of the highlights I have seen from my vantage point in this 2011 Boston Consumer Web Year in Review. Please add more in the comments and I’ll update the post, as this isn’t meant to be comprehensive.

IPO’s/Exits

  • Tripadvisor: An amazing entrepreneurial story. Spun out of Expedia and listed on the NASDAQ at a $3.5B market cap. Still led by its founder, Steve Kaufer
  • Kayak: Registered for an IPO but on hold. $61M in Q3 revenue, up 28% YoY
  • Zipcar: Ok, not exactly consumer web/software, but a great consumer tech company nonetheless.  Raised $174M in its IPO in April, current market cap ~$550M
  • Carbonite: Raised $62.5M in its IPO, current market cap of $282M
  • Where: Acquired by Ebay for what is rumored to be around $135M.  Ebay’s third largest acquisition in the last 3 years.

Growth Rounds for Rapidly Scaling Companies

  • Wayfair: This is somewhere between an exit and and a growth round, but the largest independent ecommerce company focused on the huge home/furniture category raised a $165M round from a group of growth, private equity, and venture investors. The company is expected to do around $500M in revenue in 2011 and has seen 50%+ growth YoY the past two years. The company also never raised any previous financing, and is one of the great bootstrapped success stories out there.
  • Gemvara: Custom Jewelry company raised $15M from Balderton and scaling very rapidly.
  • Gazelle: Market leading consumer reCommerce service raised $22M.  The company has seen over 100% revenue growth the past two years and was #2 in Inc 500’s consumer products and services category.
  • FitnessKeeper: Profitable consumer health application and platform raised $10M from Spark Capital and Steve Case’s new Revolution Ventures less than 12 months after its $1M seed financing by OATV.

Seed Activity

  • Boston Investors: At the earliest stages, we saw a surge in seed activity from manly local investors (Atlas, General Catalyst, Founder Collective, Matrix, CRV, Flybridge, Highland, Kepha, etc.)
  • Consumer companies raised seed rounds from top-tier investors based outside of Boston, including: First Round Capital (Custom Made), SV Angel (Boundless Learning, Babbaco, Biff Labs, StarStreet, probably others), Google (many), Baseline (Crashlytics), Floodgate (SBR Health, Admitpad), Felicis (Admitpad), Draper Associates (UsTrendy), OATV (FitnessKeeper), Lightbank (Babbaco), Andreesen Horowitz (Wikits), Greylock, True Ventures (Smarterer).

Transplants

  • One of the elements that make Boston unique is the fact that it is a magnet for extraordinary talent, not all of whom are necessarily looking to stay in Boston.  But many outstanding companies get their start here, and I think it’s interesting to point out a few of these consumer companies that got their first services and users going in Boston before finding new homes.  A number of these companies had significant financing events this year, including:
  • TaskRabbit: Incubated out of ZipCar, raised over $22M from Floodgate, First Round, Shasta, and Lightspeed
  • ThredUp: Service started in Boston while the founders were at HBS, raised $7M from Redpoint
  • Relay Rides: Service started in Boston whiles the founder was at HBS, raised $13M from August Capital, Google, Shasta, and GM
  • Birch Box: Subscription Service for cosmetics originated in Boston while the founders were at HBS, raised $10.5M from Accel
  • And a little less relevant is DropBox, part of Cambridge Y-Combinator class back in 2007, this year raised over $250M at ~$4B valuation

Big Companies Moving In

  • Finally, Amazon announced that it would be opening an engineering office to support its digital products team, joining the likes of Google and Microsoft that have a significant presence in Cambridge.

Whew!  It’s been quite a busy year.  I’m sure I’m missing a ton, so feel free to point out companies I’ve left out.  Of course, this is specifically focused on consumer tech, and I’ve left out some very exciting stories from the SaaS world (eg: Hubspot), Adtech (eg: Dataxu), and enterprise software (eg: Endeca). Also, disclaimer: NextView is an investor in Boundless Learning, Babbaco, CustomMade, and ThredUp, the founders of Wayfair and Dataxu are advisors to our fund, and NextView Partner David Beisel was previously on the Board of Gazelle.

Onwards to 2012!  I’m so excited for what it just around the corner.


Rob Go
Partner
Rob is a co-founder and Partner at NextView. He tries to spend as much time as possible working with entrepreneurs to develop products that solve important problems for everyday people.