To identify the most promising fast-growing internet companies in Europe and Israel, Informilo asked some of the most active investors in the sector to nominate and evaluate 25 companies outside their own portfolios. Informilo’s Top 25 are not necessarily the biggest or the most senior companies in their respective sectors; they are the ones that are growing the most quickly. Along with obvious candidates such as Wonga, Just Eat, Spotify, Soundcloud, Supercell, Mind Candy and Rovio this year’s picks include a crop of fast-growing Israeli companies.
What it does: Open-source enterprise content management platform.
Why it’s hot: Claims to be the second-largest open-source player in the market, after Red Hat; every day, over seven million business users in 75 countries rely on Alfresco to manage four billion documents, files and processes. It raised $20 million in venture funding from Accel, Mayfield and SAP Ventures in 2008. Last year launched The Alfresco Cloud, which hopes to take some market share from Dropbox and Box.net. Alfresco was founded by Documentum Co-founder John Newton and former COO of Business Objects John Powell; in 2013 the company brought in a new CEO and CFO.
LA PLAINE SAINT-DENIS, FRANCE
What it does: Online shopping club.
Why it’s hot: One of Europe’s largest private member e-commerce websites, selling heavily discounted designer fashion and homewares across Europe. In 2010 Accel Partners invested €37 million. 2012 revenues were €250 million, and the company is on track for €350 million in 2013; it now has approximately 15 million users.
What it does: Social network “for meeting new people.”
Why it’s hot: Has 195 million members in 180 countries; more than 100,000 new members join every day. Currently available in 40 languages via Badoo.com and various social/mobile platforms as an iPhone, Android, Facebook or desktop application. More than five million adults visit Badoo daily and millions more come more often, each spending well above average time on the site. It is rumored to be considering an IPO on NASDAQ.
What it does: Online takeaway ordering service.
Why it’s hot: Active on four continents with more than 38,000 restaurants signed up; over nine million registered users generate more than £700 million in revenue per year for the restaurant industry. More than 70 million orders have been taken since the site launched in 2001. Raised $64 million from private equity group Vitruvian Partners and other investors in May to support acquisitions of smaller rivals, Europe’s largest e-commerce fundraise for 2012. Claims that less than 10% of all takeaway orders in the world take place online, so there is still plenty of growth out there.
What it does: A hybrid Zappos and Asos clone that sells shoes, fashion and housewares.
Why it’s hot: Zalando, a Rocket Internet company, has built its brand through television advertising and a data-driven execution strategy. It now operates in 12 countries in Europe. 2012 turnover hit €1.15 billion, although losses are said to have grown to €90 million. In August Anders Holch Povlsen, owner of Danish fashion company Bestseller A/S, bought a 10% a stake in Zalando from existing shareholders (for an undisclosed sum). The company is rumored to be considering an IPO.
What it does: Digital, real-time short-term loans for consumers and businesses.
Why it’s hot: Wonga’s technology platform allows it to make swift credit decisions, yet maintain positive cash flow with very tight lending restrictions. Despite receiving recent criticism of its model from, among others, the Church of England, growth continues to be strong. In 2012 the company reported pre-tax profits of £84.5 million, an increase of 35% on the previous year, on £1.2 billion in lending, an increase of 68%. In September CEO Errol Damelin told The Telegraph, “We’re in no need of any capital at the moment. But [a stock market listing is] something we keep under review.”
What it does: Entertainment media company.
Why it’s hot: Rovio started life as a developer of casual games across multiple platforms. Angry Birds, Rovio’s breakthrough game, is now part of the collective consciousness. In September Rovio Entertainment launched Angry Birds Star Wars II along with Hasbro’s Telepod toys. The game immediately topped app store charts in over 100 countries. Rovio’s ToonsTV channel surpassed more than one billion views in its first seven months. Rovio’s animated Angry Birds feature film is planned for July 1, 2016. Earlier this year Rovio’s CMO said he saw no reason for an IPO because the company is “insanely profitable.”
What it does: Mobile app to identify music.
Why it’s hot: Bar-goers have since 2002 been holding their handsets up to speakers so the Shazam app can identify the music they’re listening to. Since then it has morphed into a powerful marketing tool: the user can now not only to identify the music in, say, an ad, but also buy the goods featured in the ad, concert tickets, the track itself, etc. In June 2011 it raised $32 million in funding; in July 2013 Mexican billionaire Carlos Slim put in another $40 million. Shazam boasts 350 million users (70 million are active), adds two million new users a week, and claims to have identified more than five billion songs.
What it does: Creator of Moshi Monsters, an online world for kids.
Why it’s hot: Founded in 2004 by Michael Acton Smith, a UK-based entrepreneur who previously founded Firebox.com. Over 65 million kids have joined the site online and Moshi is now expanding successfully offline into books, magazines, trading cards, toys, videos games, music, mobile apps, and cartoons. Moshi Magazine launched in February 2011 and is now the largest UK kids title in the UK. In March the company signed a major partnership deal with Sony Music. A Moshi movie will be released in time for Christmas. Mind Candy is focused on becoming a Disney-like entertainment company; it may eventually IPO.
What it does: European social game developer.
Why it’s hot: Nordeus’s game, Top Eleven, is the most-played online sports game in the world, with more than 11 million monthly and five million daily users on web, Android and iOS devices. The game is available in 40 languages, and Nordeus has focused on gaining users in emerging markets. Won the People’s Choice Award for best start-up at London Web Summit 2012.
What it does: Social gaming developer.
Why it’s hot: In mid-October Japan’s SoftBank Corp. agreed to buy 51% of Supercell for $1.5 billion. Last year, the company had revenues of $105 million and $40.3 million in profit. In April, a funding round of $130 million valued the company at $770 million. The current $3 billion valuation is the largest valuation for a mobile app company, according to Rutberg & Co. Last year Supercell pivoted to become a “tablet-first” publisher. About 10% of Supercell users purchase in-game extras, much higher than the industry norm.
What it does: Seeks to provide a zero-friction online payment solution that allows consumers and merchants to interact with each other safely and simply.
Why it’s hot: Klarna lets the consumer receive the goods first and pay afterwards, while the company assumes the credit and fraud risks for the merchants. It’s one of Europe’s fastest-growing companies; in the past seven years it has grown to 800 employees operating in seven European countries with over 12 million consumers. 2012 transaction volumes totaled €1.8 billion.
What it does: Streaming music service with social media interactivity and mobile apps.
Why it’s hot: Allows users to stream more than 20 million songs from the big music players and smaller independent labels using either a free, ad-supported service or a premium ad-free service. Has more than 24 million active subscribers, of which six million pay. Spotify is now available in 28 countries; one billion playlists have been created so far. The Swedish press reports the company is seeking debt financing at a $5.27 billion valuation. Last year it lost over $77 million.
What it does: Social sound platform where anyone can create sounds and share them.
Why it’s hot: SoundCloud allows sound creators to instantly record or upload original audio content, embed sound across websites and blogs, share publicly and privately, receive detailed analytics, plus get feedback from the community directly onto the waveform. It now reaches 250 million people per month. In January SoundCloud raised an undisclosed amount in a round led by Kleiner Perkins Caufield & Byers. GGV Capital also participated. In October it announced a partnership with Instagram to enable users to upload their photos as album art for their playlists, and said it had simplified its premium subscription, which helped boost growth.
TORTOLA, BRITISH VIRGIN ISLANDS
What it does: Social investment network.
Why it’s hot: Three million traders in more than 140 countries have placed more than 50 million trades through eToro’s award-winning OpenBook and WebTrader platforms since January 2012. Traders can learn from each other, share live trading information and use their collective trading power. Received Best of Show at FinovateFall for its Social Trading Index, which enables traders to create their own indices and make them available to the eToro investment network. In July eToro added fractional stock investment to its platform, enabling users to invest in the shares of large brands.
NEW YORK, NY, U.S.
What it does: Content discovery platform.
Why it’s hot: “Content marketing” — creating and sharing content to engage current and potential consumer bases — is gaining traction. Outbrain is well-positioned for a shift to a greater emphasis on content; it’s installed on more than 100,000 blogs and websites, and serves more than 14 billion page views a month, all pointing to quality content on its network of publishers. American Express, Proctor & Gamble, GE and General Mills use it as part of their marketing strategy to reach target audiences.
What it does: Global online marketplace offering tasks and services, usually for $5.
Why it’s hot: As of August the site lists more than 2,000,000 services available for $5 to $500. It says 4,000 new services, across 120 categories, are added each day. Recently launched a Mission Control dashboard to give “giggers” and buyers better access to metrics and analytics. Provides a “living marketplace” for micro-entrepreneurs in more than 200 countries.
What it does: Free text, calling, photo messages and location-sharing with other Viber users.
Why it’s hot: Founded by American-Israeli entrepreneur Talmon Marco, Viber is growing fast: it had more than 200 million users in over 193 countries as of September, up from 100 million users a year ago. It’s available on a range of platforms, and in 10 languages. Disrupting mobile operators and the previous generation of disruptors, such as Skype.
MENLO PARK, CA, U.S.
What it does: Cloud-based solution to make ERP systems easy to install, use, upgrade, and maintain.
Why it’s hot: Panaya’s software-as-a-service helps companies that use SAP or Oracle to reduce 70% of their upgrade and testing risk and effort. Used by over 800 A-list customers in more than 54 countries. Management team are all seasoned professionals with 15+ years experience in the tech sector. In January Panaya raised $16 Million in Series D funding from existing investors, led by Battery Ventures. The money will be used to fund Panaya’s aggressive growth strategy.
NEW YORK, NY, U.S.
What it does: Enables easy and safe global payments.
Why it’s hot: Operational since 2005, profitable, and well-funded. Payoneer has served thousands of companies and more than one million payees around the world. Processes more than $500 million in yearly payments. Ranked 34 on Deloitte’s Technology 2012 Fast 500 in North America, Payoneer grew 4,751% from 2007 to 2011.
TEL AVIV, ISRAEL
What it does: Digital marketing software focused on search marketing and online advertising.
Why it’s hot: $25 billion+ in annual client sales revenue is directed through Kenshoo, which has campaigns running in more than 190 countries with clients including Expedia, Facebook, Hitwise, Omnicom, Travelocity, and Zappos (46% of Fortune 50 companies are users). Kenshoo has 1.2+ million active campaigns for local, national, and global businesses; 3+ billion keywords are managed through the platform. Backed by Sequoia Capital and Arts Alliance, the company is a market leader with a solid position in a growth market.
PALO ALTO, CA, U.S.
What it does: Offers online businesses social infrastructure to integrate social network functionality throughout their web properties.
Why it’s hot: Works with more than 650 enterprises, including 44 of the top 100 websites. Gigya reaches 1.5 billion unique users per month — nearly two-thirds of the global internet population. At yearend 2012 the company nearly tripled its sales growth from 2011 and recorded its largest quarter ever, with 33% quarter-over-quarter growth in Q4. In September Gigya raised a $25 million funding round, bringing the total raised to $70 million in venture funding. Social infrastructure has become a requirement for online businesses; Gigya’s approach of offering everything a site needs to be social puts it in a good position for future growth.
OR YAHUDA, ISRAEL
What it does: Family tree-building software and services.
Why it’s hot: Available worldwide, in 38 languages. Ranked the #2 most popular genealogy site by ProGenealogists in 2011 and the #3 in 2009 and 2010. Has more than 75 million members, 27 million family trees, and 1.5 billion names in family trees. MyHeritage has raised a total of $49 million; in 2008 the company raised $15 million from Index Ventures and Accel Partners; in November 2012, the company raised $25 million in a round led by Bessemer Venture Partners (BVP). MyHeritage has also been on the acquisition trail, buying more than nine competitors or complementary providers in the past six years. The company expects revenues to continue growing at year-over-year rates above 100%.
What it does: Payment solutions for international merchants.
Why it’s hot: Adyen’s payment platform works online, on mobile devices and at the point of sale, and is easily customized by merchants. The company processes up to 224 different payment methods and 187 transaction currencies. Customers include Uber, Badoo, SoundCloud, Getty Images, Mango, KLM, PopCap Games and Vodafone. The company processed over $10 billion in payments in 2012.
What it does: Flight comparison website.
Why it’s hot: Skyscanner enables users to browse flight prices to get the best deals. Its “search everywhere” option crunches billions of options, so users can explore travel possibilities. The company has been in the travel business for 10 years; its site supports more than 30 different languages and receives over 60 million visitors a month. 2012 revenues were approximately $30 million, with $10 million in profit. In October Sequoia invested an undisclosed sum in Skyscanner for what some say was a valuation between $800 million to $1 billion.