Orate founders Sara Capra (L) and Veronica Eklund.
Virginia's quickly growing startup economy is set once again for a big year in 2016. With a hand from Gov. Terry McAuliffe, who has spoken at length about making the commonwealth a hub for cybersecurity and other tech startups, a number of big storylines marked 2015 — including accelerator Mach37's first premium sponsorship, the dual raises of threat intelligence startups ThreatConnect and ThreatQuotient within days of each other, and the takeover of Crystal City-based Disruption Corporation by 1776. In looking ahead at 2016, here are some of the top Virginia startups we're watching in tech.
ThreatQuotient (Sterling, Va.)
- Investors: Blu Venture Investors, the Center for Innovative Technology (CIT), New Enterprise Associates (NEA)
- What they do: threat intelligence platform (TIP) that can aggregate and organize complex cybersecurity system information via a dashboard
- Recent news: raised a $10.2 million Series A round led by NEA in early December. With the raise, Harry Weller, who leads NEA’s east coast venture practice, joined ThreatQuotient's Board of Directors. Board member and former SourceFire executive John Czupak became the acting CEO of ThreatQuotient roughly four months prior to the raise. SourceFire was a highly profitable cybersecurity exit/acquisition for NEA that was spurred by interest from Cisco. The fresh funding is being used, Czupak previously told DC Inno in an interview, to scale the company's go-to-market strategy. This translates into hiring more sales personnel and developing a global marketing campaign.
- What to watch: the evolution of the TIP market as a number of other, industry leading cybersecurity firms look to establish their own versions of this technology. Whether it leads to a direct cannibalization of TIP startups is unclear.
CargoSense (Reston, Va.)
- Investors: CIT GAP fund, New Dominion Angels and Irish Angels, among other unnamed angel investors
- What they do: supply chain Internet of Things (IoT) tracking software. Their technology is used to track the condition and location of high-value packages while in transport. CargoSense’s software platform takes in data from Internet-connected sensors to provide insight that allows clients to know exactly whats going on with their products from when they leave the factory to when they arrive at a customer’s door, including product positioning, temperature, tampering, speed during travel and other measures.
- Recent news: raised a $3.67 million seed round in the fall which is being used to expand marketing and hiring efforts.
- What to watch: the supply chain IoT-enabled software space is quickly becoming a crowded one. The key appears to be reliable partnerships with sensor/beacon manufacturers. The IoT startups that can offer a real, total "solution" that combines software with an efficient and affordable beacon system will be prime for success with enterprise class customers.
Oppleo Security (Arlington, Va.)
- Investors: CIT, Mach37 accelerator, unnamed angel investors
- What they do: cybersecurity threat assessment, management and defense systems
- Recent news: in October, Oppleo Security won the Arlington Economic Development's Startup Arlington contest, besting 75 other applicants, to move from Montana and establish their HQ in northern Virginia. As winner, they received three free months of work and living space accommodations.
- What to watch: currently working on proof of concept work for their technology. A strong finished product will determine not only Oppleo Security's future but also the validity of their contest victory.
SnapData (Herndon, Va.)
- Investors: Rhein Tech Laboratories
- What they do: Internet-of-Things (IoT) cloud software that leverages data sent by remote sensors. Similar in nature to CargoSense, but much more broad in use case scenarios. Current beta clients include grain storage, waste management and donation bin companies. Uses a myriad of different sensors. Again, this startup is not a sensor maker.
- Recent news: In early December, SnapData won the Dongsheng Global Entrepreneurship Competition, which was hosted in Arlington, Va., to scoop a $15,000 cash prize and office space in the Dongsheng accelerator. The award also came with a flight to meet a cohort of China's top venture capitalists in Zhongguancun, Beijing, China's Silicon Valley. SnapData chief operating officer (COO) and current Rhein Tech Laboratories vice president Shelley Grandy previously told DC Inno in an interview that she expected to close a seed round of investment in late January.
- What to watch: with a round of capital expected to be coming soon it will be interesting to see how this startup's relationship with Chinese investors matures. SnapData is very much an early stage company but they hold impressive potential, as the team is full of veteran entrepreneurs and is guided by longtime government IT contractor, Rhein Tech.
Distil Networks (Arlington, Va.)
- Investors: Bessemer Venture Partners, Foundry Group, Techstars, ff Venture Capital, Idea Fund and Correlation Ventures
- What they do: a cybersecurity startup that specializes in blocking malicious bot-based (automated) attacks on enterprise customers. Distil’s current clients already include Glassdoor, CrunchBase, FindTheBest.com and Wayfair.
- Recent news: in June, they raised a $21 million Series B that is being used to fund a hiring push across multiple division. CEO Rami Essaid said in June that his cybersecurity startup—which employs about 60 professionals—plans to add 100 new employees within 12 months.
- What to watch: the big hiring move is something that will triple the size of Distil Networks. Given the opening of several new offices in 2015, including a San Fransisco-based second HQ, the maturation of this company will be something to watch; from startup to middle stage, and all the expectations that it brings.
Kaprica Security (Reston, Va.)
- Investors: CIT
- What they do: a two time winner at the hacking conference DEFCON, Kaprica is a cloud and mobility cybersecurity startup that helps protect a range of devices and vehicles from hackers. They develop both software and hardware products.
- Recent news: Kaprica was part of a cohort of startups that were involved with Governor McAuliffe's latest joint cybersecurity initiative aimed at protecting police cruiser from being hacked. The team was selected to carry-out the development of a hardware product in this project, which involved the creation of Kaprica's RunSafe. This hardware device is manually installed into a new car’s console via a dongle, protecting the car from remote attacks that can cut off engine function and even brakes. Meanwhile, RunSafe will also collect data about the hacker that initiated the breach. Current clients include DARPA, the Department of Transportation, Lockheed Martin and Intel.
- What to watch: as autpmobiles continue to advance and become more like personalized computer systems on wheels, the need for cybersecurity will be critical to ensure safety. While a usual breach can lead to files being leaked, a hacker breaking into a car system could result in a lose of control and ultimately, in a bad car accident. Can Kaprica bank on a larger consumer automobile trend?
Cyph (McLean, Va.)
- Investors: CIT GAP Fund, Goel Fund
- What they do: Encrypted messaging app aimed at defending users against “mass surveillance”
- Recent news: Cyph took part in the Fall 2014 cohort of the Mach37 cybersecurity startup accelerator, and in September they raised a $500,000 seed round
- What to watch: The company was founded by two former engineers at SpaceX, suggesting the founders, at least, believe they’re onto something huge—in a time when surveillance is a major source of anxiety and debate. “While the two of us are strong supporters of Internet freedom and privacy, communicating online securely with our non-engineer friends has always been such a hassle that it really wasn't an option,” the founders state on their website.
Canvas (Reston, Va.)
- Investors: Camber Creek, Osage Venture Partners, River Cities Capital Funds
- What they do: Drag-and-drop app builder that lets users replace their paper forms with mobile apps
- Recent news: Companies including Pepsi and Redbull are using the Canvas software so far, and the company has raised a total of $20.1 million in funding since being founded in 2008, including a $9 million round a year ago
- What to watch: Canvas said earlier this year that the plan is to expand its staff (which was 65 at the time) by at least 75 percent a year for the next three years. The company has been expanding its business globally at a fast pace, and has been offering its software in more than 65 different countries.
Orate (McLean, Va.)
Investors: an undisclosed friendly and family round followed by the Startup Factory accelerator program. Orate is currently in the process of raising a $500,000 seed round from unnamed investors, c0-founder Veronica Eklund previously told DC Inno. What they do: online platform for connecting event organizers with public speakers. The revenue model is based on a commission taken on speaker fees. Recent news: In November, Orate won an online competition hosted by business news publication Fast Company to secure a $10,000 prize. What to watch: the aforementioned seed round will be huge in deciding the momentum that Orate can carry after it's Fast Company win. In 2014, they also took the title of best pitch at a Startup Weekend DC event.
LifeFuels (Reston, Va.)
- Investors: funded by founder Jonathon Perrelli, a serial entrepreneur and also the founder of seed stage venture capital firm Fortify Ventures
- What they do: maker of an Internet-connected "smart" water bottle that pairs with a smartphone app
- Recent news: they were awarded a 2016 CES Innovation Award as an honoree. Still receiving pre-orders but not in full distribution yet of a product.
- What to watch: LifeFuels has been actively speaking with a number of both angel and institutional investors towards raising a seed stage investment. That announcement is expected in the near future. A simple observation would suggest that those resources would be devoted towards increased production capacity and for national marketing efforts.
