Soaring investor confidence in 2021 led to accelerated funding activity for enterprising technologies, entrepreneurs and businesses in Greater Philadelphia.
Startups throughout the region raised record amounts of capital last year while posting tremendous growth, even as the Covid-19 pandemic continued to impact the global workforce and supply chain. Recognizing some of the most promising startups, PHL Inno’s inaugural Startups to Watch is a list of the region’s groundbreaking and headline-making companies that the editorial team believes will continue to make strides in 2022.
The group consists of early and growth-stage, late-stage and unicorn startups. We selected this cohort of early- and growth-stage startups based on funding raised in 2021, revenue growth, and future projections and funding plans. Early-stage companies consist of pre-revenue startups raising seed rounds, while growth-stage companies are those that have secured venture funding and launched a minimum viable product.
Our second and third cohorts include late-stage startups, having raised Series C or D rounds. Unicorns are privately held startups with valuations topping $1 billion.
Here are PHL Inno’s Startups to Watch in 2022.
Early and Growth-Stage Startups
Employee Cycle
Year founded: 2018
Home base: Philadelphia
Founders: Bruce Marable and Salas Saraiya
Stage: Growth
Valuation: n/a
Employee Cycle, a human resources startup that takes HR data, analyzes it and presents it on a dashboard, landed spots in several accelerator programs this past year. That included the Comcast NBCUniversal LIFT Labs Accelerator powered by Techstars. Employee Cycle was the only Philadelphia startup selected to participate in the 2021 accelerator, one of the region’s most prestigious programs.
The startup is now in the midst of raising a $2.5 million seed round and has several investors on board.
Co-founder Bruce Marable wants to make Employee Cycle’s data packaging more actionable, and for human resources staff to be able to take what they learn from the platform and transform it into goals. It will soon introduce a feature that will help companies benchmark their internal employee diversity against industry and local standards.
Employee Cycle is also gearing up to more than double its staff of four employees to 10.
ForMotiv
Year founded: 2018
Home base: Philadelphia
Founder: Andrew Schwabe
Stage: Growth
Valuation: n/a
ForMotiv is an unusual startup in that it is already profitable, even choosing to raise capital when it didn’t need the money. The startup raised a $6 million seed-plus round in September led by Boston-based Vestigo Ventures. Existing investors Dreamit Ventures and Plug and Play Ventures also participated.
The company collects and analyzes digital behavioral data from users in real time so its clients can reduce risk and improve their user experience. Its proprietary platform tracks factors like keystrokes, mouse movements, backspaces and corrections to identify red flags from users.
ForMotiv CEO Bill Conners saw an opportunity to use its cash infusion to improve on the product and double its staff. In wanting to avoid the “never-ending fundraising treadmill,” the startup has no plans for a Series A, Conners said.
The goal is to keep up with rapidly growing demand. The startup went from processing 100,000 transactions from financial institutions and insurance companies in 2019 to more than 200 million in 2021, with revenue expected to grow 400%.
Lula
Year founded: 2020
Home base: Philadelphia
Founders: Tom Falzani and Adit Gupta
Stage: Growth
Valuation: n/a
Could Lula be Philadelphia’s second delivery unicorn?
Founded by Drexel University alums Tom Falzani and Adit Gupta, Lula offers delivery from convenience stores and bodegas through existing platforms like DoorDash and GrubHub, as well as through its own platform.
The startup secured partnerships with DoorDash, Uber Eats and National Convenience Distributors to convert convenience store clients into “micro-fulfillment centers,” onboarding them onto Lula’s delivery platform and helping them sell more through delivery. The company’s latest projections estimate Lula will be in 200 stores by early 2022.
Though the startup says it’s different from Philadelphia’s other Drexel-founded delivery startup Gopuff, the two companies have a fair amount of overlap. Gupta’s focus with Lula is to serve convenience stores and suburban clients, while Gopuff has largely focused on major metros and building its own fulfillment centers.
Lula will soon wrap up a seed round after closing an oversubscribed pre-seed of just under $1 million in June, and Gupta says it plans to raise a Series A this year.
Sporttrade
Year founded: 2017
Home base: Camden, New Jersey
Founder: Alex Kane
Stage: Early
Valuation: n/a
Without a product on the market yet, Sporttrade, helmed by Alex Kane, has already made its first acquisition, raised $36 million and scored a deal with Nasdaq.
Sporttrade is a sports betting startup that operates like a stock exchange for sports bets. Headquartered in Camden, the company lets bettors buy “contracts’’ of a particular outcome of a game and sell it to other bettors on its app if or when the odds change.
Sporttrade is planning to launch its betting marketplace in New Jersey early this year and is working with Bally’s Corp. to do so. It is also looking to enter the market in additional states like Colorado throughout 2022, having acquired Denver-based Momentum Sports and Entertainment in August.
Sporttrade faces tough competition in a crowded market, but sports betting is not without opportunity — New Jersey became the first state in the country to hit $1 billion in monthly bets in September.
Tendo Systems
Year founded: 2020
Home base: Philadelphia suburbs
Founders: Jennifer Goldsmith and Dan Goldsmith
Stage: Early
Valuation: $550 million as of June 30
Despite being one of the newest digital health companies to crop up in Philadelphia, Tendo Systems is one of the highest-valued startups in the region.
Valued at $550 million after raising a total of $70 million since its founding in 2020, Tendo Systems is developing software “that will seamlessly connect patients, clinicians, and caregivers throughout the care cycle,” according to its website, building a more consumer-focused system for appointments.
Tendo was started by siblings Jennifer Goldsmith and Dan Goldsmith, both tech industry veterans. The startup’s backers include Jefferson Health, New York venture capital firm Lux Capital and Cambridge, Massachusetts-based General Catalyst.
QuotaPath
Year founded: 2019
Home base: Philadelphia and Austin
Founders: AJ Bruno, Cole Evetts, Eric Heydenberk
Stage: Growth
Valuation: n/a
QuotaPath had a busy 2021, raising a $21 million Series A and doubling its staff in less than six months.
The Philadelphia- and Austin-based startup saw major growth last year. QuotaPath CEO AJ Bruno said in September that he anticipated the startup reaching 1,000% year-over-year revenue growth by the end of 2021, setting a high bar for sales this year.
QuotaPath is a software-as-a-service platform that tracks commission and compensation for sales teams. The platform can be integrated into other apps like HubSpot and Salesforce. QuotaPath began selling to tech firms and e-commerce companies when it launched its paid product in 2020, and has expanded to companies with fast-growing sales teams.
For 2022, Bruno is eyeing an international expansion into Europe, the United Kingdom and Australia.
The startup also has its sights set on a Series B possibly mid-year and has already been approached by investors about its next funding round. QuotaPath is well-financed through 2023, Bruno said.
ZeroEyes
Year founded: 2018
Home base: Conshohocken
Founders: Mike Lahiff, Tim Sulzer, Rob Huberty, Sam Alaimo and Dustin Brooks
Stage: Growth
Valuation: n/a
Veteran-founded ZeroEyes made major pivots during the pandemic, and they’re starting to pay off.
The startup’s AI-based platform uses clients’ security systems and video analytics to detect firearms. If a firearm is detected using the platform, an alert is sent to the ZeroEyes team, which can then alert local authorities and emergency services.
After changing its business model from serving only K-12 and other education clients to adding corporate campuses and government sites, the Conshohocken company raised a $20.9 million Series A in August. The funding will be used to grow its sales team and research and development staff.
ZeroEyes CEO Mike Lahiff doesn’t plan to raise another venture capital round ahead of pursuing an initial public offering. Lahiff sees other avenues to capitalization, including debt structuring.
ZeroEyes’ platform was on 5,000 cameras as of August, and Lahiff wants the software to reach 150,000 cameras by 2024.
Late-Stage Startups
HealthVerity
Year founded: 2014
Home base: Philadelphia
Founders: Andrew Kress and Andrew Goldberg
Stage: Late
Valuation: $720 million as of June
Philadelphia-based HealthVerity continues to cash in on anonymized patient data.
HealthVerity’s Identity, Privacy, Governance and Exchange, or IPGE, platform, has been in high demand since the start of the Covid-19 pandemic. The company’s cloud-based SaaS platform is used by pharmaceutical companies, insurance providers and analytics companies, specializing in providing clients with data that is “de-identified” so it won’t compromise patient privacy.
The company reported 100% revenue growth in each of the last three years, and it’s now focusing on predictable revenue growth. The startup’s pharmaceutical and federal contracts businesses have done well as organizations seek real-time data for research.
An initial public offering could be in the data firm’s future, CEO Andrew Kress told the Business Journal in July after announcing the company’s $100 million Series D. Kress did not rule out the possibility of another funding round before going public.
HealthVerity also plans to double its staff of about 145 employees by mid-2022.
NiKang Therapeutics
Year founded: 2017
Home base: Wilmington, Delaware
Founders: Zhenhai Gao
Stage: Late
Valuation: $450 million as of May
Wilmington-based NiKang Therapeutics is among the quieter startups in the region, but that doesn’t mean it hasn’t been busy.
The company raised one of the largest venture capital rounds in 2021, with $200 million committed in May in an oversubscribed Series C round. Cormorant Asset Management, HBM Healthcare Investments and Octagon Capital Advisors led the round.
Helmed by Zhenhai Gao, a former senior director of cancer biology at Incyte Corp., also in Wilmington, the biotechnology firm is developing small molecule oncology medicines using structure-based drug design. The company has not revealed which types of cancer
it focuses on for its treatments, but it has said that its approach allows it to “rapidly and efficiently” discover and advance drug candidates.
Unicorn Startups
dbt Labs
Year founded: 2016
Home base: Philadelphia
Founders: Tristan Handy
Stage: Late-stage unicorn
Valuation: $1.5 billion as of June
Dbt Labs officially sealed its status as a Philadelphia unicorn in 2021, along with a fresh new name.
Formerly known as Fishtown Analytics, dbt Labs’ $150 million Series C in June sent its valuation soaring to $1.5 billion. Silicon Valley venture capital firms Altimeter Capital, Sequoia Capital and Andreessen Horowitz led the round.
The startup’s popular and fast-growing open source analytics tool, called dbt, lets clients input their own raw data to turn it into clean datasets that can be used for tasks like operational analytics. The tool is often used in partnership with data tools from massive companies like Snowflake, Databricks or Google-owned BigQuery.
Dbt Labs has been quick to raise cash as it grows rapidly. It raised a $12.9 million Series A in April 2020 when it had 1,600 clients, and a $29.5 million Series B in November 2020 with 3,100 companies on the platform. Dbt now has more than 5,500 companies on board, including JetBlue Airways, Cisco and Casper.
Employee count has been growing rapidly, rising from 16 at the start of 2020 to more than 120 as of late 2021.
Dbt’s next funding round may be its last before the company pursues an initial public offering, CEO Tristan Handy said in June.
Gopuff
Year founded: 2013
Home base: Philadelphia
Founders: Rafael Ilishayev and Yakir Gola
Stage: Late-stage unicorn
Valuation: $15 billion as of July
Delivery juggernaut Gopuff rocketed to new heights in 2021 with acquisitions and funding rounds, priming it for growth in 2022.
The startup’s valuation climbed to $15 billion thanks to more than $2 billion in investment capital in the first few months of last year, making it the highest-valued startup in Greater Philadelphia. Gopuff is backed by SoftBank and Accel, among other investors.
Beyond raking in major investments, the startup has made a number of acquisitions over the past two years. That includes the $350 million purchase of alcoholic beverage retailer BevMo! in 2020 and the June 2021 acquisition of Kentucky-based beer, wine and spirits chain Liquor Barn.
To fuel its expansion overseas, Gopuff acquired Dija, a European delivery platform operating in France and Spain, and United Kingdom-based delivery platform Fancy. It launched service in the U.K. in November.
Gopuff operates an e-commerce convenience store, selling items from alcohol to chips to ice cream to toilet paper. It operates using its own micro-fulfillment centers in hundreds of cities, though that hasn’t come without some growing pains.
Gopuff’s ambitions don’t stop at the total absorption of the e-commerce convenience space — the startup has shifted its sights to include retail as well. Its first locations opened in Florida and Texas as of September, and it plans to open another in San Francisco, though the timeline is unclear.
As it becomes one of the big players in the space, Gopuff is now contending with increasing competition from the likes of DoorDash and UberEats, as well as startups Gorillas, Jokr and Philadelphia-based Lula.
Misfits Market
Year founded: 2018
Home base: Delanco, New Jersey
Founders: Abhi Ramesh
Stage: Late-stage unicorn
Valuation: $2 billion as of September
Greater Philadelphia’s second-highest-valued startup deals in ugly produce. Misfits Market is valued at $2 billion after it secured $225 million in a Series C-1 in September.
Led by Abhi Ramesh, Misfits Market sells organic produce, meat, seafood, plant-based proteins, dairy products and eggs, which it ships directly to consumers, helping divert edible foods from heading to landfills.
Growth in online shopping during the pandemic helped boost sales, and additions of proteins and dairy products to its selection of offerings gives shoppers the option to make Misfits their only grocery stop.
The startup has been rapidly hiring and spreading its geographic footprint with new fulfillment centers in Salt Lake City and Dallas. The company anticipates hiring more than 200 people in fulfillment and corporate positions in Greater Philadelphia, where it was founded, as it continues to grow.
Misfits Market has operations in 44 states and is eyeing international growth, including Canada and Mexico.
Phenom
Year founded: 2011
Home base: Ambler
Founders: Mahe Bayireddi, Brad Goldoor, Hari Bayireddi
Stage: Late-stage unicorn
Valuation: $1.43 billion as of April
Human resources technology firm Phenom took advantage of the red-hot venture capital scene in 2021, helping it reach unicorn status with a then $1.37 billion valuation. It raised $100 million in a Series D round last April, for a total of $161 million raised since its inception.
The 10-year-old startup is now readying itself for an initial public offering and “really high growth” in the next three years, CEO Mahe Bayireddi said last year.
Phenom’s product — an artificial intelligence-driven platform that uses machine learning to streamline the hiring process from recruiters to candidates — has been in high demand, and the company was one of Deloitte’s fastest-growing tech companies in 2021, ranked at No. 253 after posting 519% revenue growth from 2017 to 2020. More than 1 billion candidates from 180 countries are in Phenom’s system.
Phenom has been spreading its reach in Europe, the Middle East and Africa, hiring a slate of executives to lead its overseas operations. The startup plans to increase its global team to about 1,500 employees, which includes doubling the 200-member team at its Ambler headquarters.
As the “Great Resignation” continues, with employees holding the cards and employers scrambling to retain talent, Phenom’s specialty in building tech for attracting and retaining workers will likely lead to more growth for the firm in 2022.
