5 Startups That Thrive During The Pandemic
Leading a startup is hard. With the pandemic looming over our heads, having a purpose-driven startup when the economy has shut down seems completely impossible. However, some have come up unscathed and have capitalized on their strengths and adapted quickly to the ever-changing global market. What do you think made them successful? What pieces of the puzzle were they able to put together to scale that other startups just could not? Let us dive in and find out.
1. Starling Bank
Funding received: $363 million
We will start with Starling Bank, which is primarily based in the United Kingdom. Considered one of the top challengers in the banking sector, it is carving a name for itself in the industry. A large part of their success could be credited to the fact that they were disruptors. This award-winning app allows you to access your everyday banking requirements with a click of a button. They launched U.K.’s first digital bank account in 2018. So what are some of its main features? And why is it becoming so popular in the U.K.?
One of the primary reasons it is breaking boundaries is its convenience. You can set up your bank account in minutes. You can access your account via mobile or desktop. It allows you to borrow money faster, better with a personalized loan service that is straightforward to use. If your card goes missing, you can lock your account in-app temporarily while you look for it. It provides you with fast and secure money transfers worldwide. In addition to basic fast banking, it also provides you with insights on how you spend to better budget yourself for the future. Their ‘technology banking’ is what has driven so many customers to access this software. They work with other providers to provide financial services to their customers and together, as a financial community satisfies customer needs. They are the best current account providers. The apps other features are facilitated by other service providers linked together with API.
In 2020, they have 1.6 million customer accounts, which is fewer than their rivals. However, it is the only company amongst competitors that is going to break even by the end of the year. Their customer base is usually older, around the age of 37, with higher account balances. They tend to spend money locally and have made the bank less reliant on international spending. The bank issued new fees on Euro-denominated deposits and many of its British Pound denominated products. ‘Monzo’ one of its competitors relies heavily on customer banking and was affected by the decrease in international transactions and the closure of shops all across the country. This revenue model below shows Starling’s revenue growth rate and how much they are expected to have by the end of 2020.
2. Blue Ocean Robotics
Total funding received: $48.7 million
Blue Ocean Robotics develops, produces, and sells professional service robots in healthcare, hospitality, construction, agriculture, and other global markets. Their collection includes various robot brands. By June 2020, Blue Ocean Robotics was already recognized by Robotics Business Review as among the 50 most influential robotic companies. This recognition was earned because of their work on the Ultra Violet Disinfection Robot (UVD). The UVD robot focuses on preventing and reducing the spread of infectious diseases like viruses, and bacteria by breaking down their DNA. Its formula involves combining microbiological information with autonomous robot technology and ultraviolet light to create disinfectant solutions. It has been proven to kill pathogens like Coronavirus within ten minutes in a patient room. What makes them innovative is that they are self-driving, disinfecting robots. They are being used in 60 countries. The startup’s main strength lies in diversification. Blue Ocean Robotics was able to expand its portfolio with a range of robots built for the hospitality, construction, and agriculture industry.
How were they able to stay afloat in 2020? Well, of course, it is very clear a lot of hospitals were able to put these robots to good use during the pandemic. This technology also works in other environments like office spaces, shopping malls, schools, airports, and production facilities. The company also made a key acquisition of assets from a telepresence company called Suitable Technology. Telepresence is the use of virtual reality to control machinery remotely and to participate in virtual events. UVD robots can now be used back to back with robots called Beam. This deal was able to help Blue Ocean gain market share in the remote office and tele-health space. Initial projections show tele-health valuing at $300 million. 5.8% of Americans were working from home before COVID in the tele-health sector. This is now slated to be 10 times more. Investing in new technology and markets, diversifying its portfolio, is making this startup as successful as it is.
Total Funding received: $289 million
What is considered the biggest driver in a business? Sales. Okay, this might sound a little cliched but no matter how great your technology is, how tight your financial goals are, or how forward-thinking your management techniques are, you need to have a great sales mechanism in place. But, sometimes it can be difficult for sales reps to find prospects and qualify them. Enter ‘Outreach.’ Outreach is a sales engagement platform (SEP) that has developed tools online which salespeople use to identify and screen prospects faster, improving their relationship to close deals. The platform itself is software friendly and integrates with various CRM platforms. The software provides a SaaS-based set of tools for helping to source and find meetings. More than 400 companies use Outreach including Adobe, Tableau, DoorDash, Splunk, DocuSign, and SAP.
Growth for this company was not smooth sailing. The company, when founded in 2011, was a recruitment startup working on software to source and improve talent. In 2015, the company hit a wall and was not able to raise more capital. They quickly tried to adapt, sell their recruitment software and change their model to sell potential recruits to employers. This in turn, became an opportunity in disguise because companies started to prefer their sales engine. What set this company apart and attracted investors was ‘its clear mission,’ ‘value-added approach,’ and ‘quick adaptability to the changing market.’ Like previously mentioned, it is a SEP, which serves to close the gap between marketing and sales. They integrate with the CRM and provide a centralized area for sales teams to plan sequences, execute playbooks, and inspect customer interactions across all communications platforms like email, phone chat, etc.
In 2020, inexperienced salespeople found it difficult to connect, learn, and shadow the experienced reps. However, the software allowed them to connect with experienced sales reps from the convenience of their homes and provided a better platform for remote training to learn the tricks of the trade. Outreach is also able to automate some of the work that sales reps find redundant.
This chart shows that the company is on track to hit $100M in revenue. The company raised a $50 million Series F investment round bringing its valuation to $1.33 billion and its total funding to $289 million. They have almost 600 employees and have not made any layoffs. The company has an excess amount of cash in the bank but still took extra funds from investors to grow and become the number one sales engagement platform.
Funding received: $74.8 million
The fitness industry is nearly valued at $100 billion. Wanting to bring the fitness experience home has been a dream for many. There is a multitude of apps available in-store to help you with your daily workout regimen. However, it is difficult to focus and perform the routine whilst you are required to look at a small laptop or phone screen. In 2018, Brynn Putnam saw this as an opportunity to revolutionize the way we workout and introduced ‘Mirror.’ This device/entity is a $1,495 tech-enabled mirror connected fitness system that streams on-demand classes with its high-quality display. The content is personalized in real-time using a combination of user feedback and biometric data. For the first time, a workout system with many components, riddled with a variety of routines is brought to your home — the best convenience. Mirror is a creation of in-home fitness that unites cutting-edge hardware, responsive software, and the best content that enhances the in-person experience. Putnam said her idea was to build this startup for busy people who do not want to sacrifice quality for convenience. It works as a direct to customer service. Clients purchase the mirror with a type of unlimited live and on-demand classes subscription service. A delivery service will come to your house and have it installed on your wall. Putnam believed it would stand out to investors more if they were able to experience it, and that is how she worked out her pitch. In 2019, Forbes estimated its revenue of around $45 million.
In 2020, Lululemon acquired Mirror for $500 million. CEO Calvin McDonald said he wanted to increase brand loyalty and drive customer engagement.
The company wants to mix physical and digital experiences. This is what drove the company to make the acquisition. They are now planning to sell these mirrors in Lululemon stores.
Here, you can see the company stats and its increase in Google search trends that kindled U.S customers’ interest overtime until 2020.
Total Funding received: $2.5 billion
This one is a top pick because it is becoming quite popular and it is hard to leave under the radar. Founded in 2013, It is an on-demand logistics based startup, which acts as a middle man between merchants and the prospective buyers who wish to get products from local merchants delivered at their doorstep. But how does it work and what sets it apart from its competitors, like GrubHub?
In 2020, When Covid hit, every restaurant was scrambling to understand how to effectively deal with this huge blow. Social distancing measures were enforced by the government, which meant fewer people inside restaurants for sit-ins, every employee and customer being required to wear masks at all times, plexiglass placed on cash register tables to ensure the distance between employees and customers. Fewer customers meant lower revenue, which led to layoffs, closures, and looking into other means of survival. Restaurants learned that delivery and takeout are going to be the new norm in these erratic months and started working with companies like DoorDash to ensure that they will survive.
DoorDash has customers choose their favourite food by pressing a button to search for a certain restaurant filtered through various preferential categories like location, type of cuisine, etc. Users then choose the required transaction method after placing their orders online. Once the order is received by DoorDash, it sends it to the restaurant where it is prepared and packed for delivery. The delivery person picks up the packed food order from the respective restaurant to deliver to your door. DoorDash allows you to track the location to estimate the time of delivery. The company charges a 20% commission from the restaurant. They charge companies for any promotions or advertising that is done on the app. Restaurants that did not deliver can now deliver without risk and restaurants that do not want to manage their delivery service can outsource it to other companies.
Its competitors like GrubHub are sales-driven companies that create demand for restaurants that manage and operate their own delivery arrangement. DoorDash is a logistics and technology-driven company that manages a delivery service for restaurants. DoorDash is known for being consistent with its delivery, more frequently praised for its neatly organized app and smoother interactions. A lot of GrubHub’s restaurants have a minimum order limit which could prove vexatious for customers.
In 2020, DoorDash is responsible for 45% of all food delivery orders, its users have increased to 20 million, and has offered $100 million in IPO. It has 4000 locations and has a valuation of $16 billion.
Even though we have seen how well these startups have scaled, most of them showed early signs of struggle which they were able to combat. It is inspiring to see how anyone with the right mindset, determination, and drive to solve customer needs can be successful and bring about much-needed innovation that will help us grow as a community.
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