The Most Promising Sectors and Innovations for Startups this year

The Most Promising Sectors and Innovations for Startups this year:  One of the key drivers of success for a startup is whether the company’s creators have worked together in the past at another company. Another is the growth trajectory of the sector that the start up operates in. Is growth accelerating in the sector? Is venture capital growth picking up? Arcus researched over 25,000 companies in North America and selected the fifty innovation driven companies that are on the cusp of dramatically higher growth.


Arcus has analysed early start ups based on 36 metrics ranging from product innovation, uniqueness, consumer value, and easy of replication. The methodology has unearthed numerous promising startups that are under the radar and once that are not actively seeking funding at this time but may do so in 6-12 months.


 

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The process has identified several scaled start ups since 2009 such as Cloudera, Palantir, Evernote, Twitch and Spotify, all with valuations that are 30X over the past 5 years. A majority of these companies were founded about 5 years back and have been exposed to heavy investor interest. many have raised 2-3 rounds of funding. Some sectors are of particular interest to investors at this time especially Online security, fraud detection and artificial intelligence startups, based on funding rounds.

Below are some sectors that have emerged as favourites of early rounds of funding:

  • Online Security & Fraud Detection $210M
  • Artificial Intelligence $164M
  • Autonomous Driving; Image Recognition & Mapping Technologies $126M
  • Augmented Reality $119M
  • Smart Sensors $87M
  • Drones $82M
  • Digitization of Education $74M

The key here is to identify companies that are likely to become the next Spotify or Palantir. Here are some VC firms that have been early stage investors in the top 50 compananies identified in our research:

  • Andreessen Horowitz
  • Sequoia Capital
  • Felicis Ventures
  • First Round Capital
  • Y Combinator
  • TechStars
  • Kleiner Perkins
  • Founder Collective
  • TriplePoint
  • Shasta Ventures

Contact Arcus to purchase the report and database of the top 50 future start up stars.


Methodology

Arcus analysed a list of about 45,000 companies with some venture capital or debt in the past 36 months. The data on investment received, investors, location and founding year came from research sources. The list was winnowed to 3800 companies by categorizing them into 1) early-stage startups with funds from venture capital firms; 2) Relatively higher-valued companies with a market presence and 3) companies with a significant growth potential. Metrics used include number of rounds of funding and amount raised. Biotech was excluded.


Services for Private Equity and M&A

Arcus Equity specializes in mergers, acquisitions, financing and operations of companies that provide products, services, and solutions in diverse industries. We offer in-house expertise and flexible financing and acquisition solutions to clients.

Arcus’s network can provide you with access to the expertise you will need to orchestrate a strategy for ideal results. If you’re thinking about selling your business, acquire or finance a venture, it’s important to make the right choices that protect the value of your investments. You might need to locate a strategic buyer, pass the company to your family or management, or even go public.


An experienced industry specialist to negotiate the best deal possible:

  • Improve the value and marketability of your firm
  • Tap into a network to manage the sale process
  • Finance your start up or explore an acquisition
  • Generate a robust list of targets
  • Screen targets based on a long term strategy
  • Develop a valuation for priority targets
  • Build a timeline and map for completion of the acquisition

Our services

Sales & Divestitures: The decision to exit your business involves analyzing your financial goals, assessing various ownership options, and preserving the value of your investment in your business. Arcus will support your exit with strategic buyers and resources that can provide business sale, merger, acquisition, and recapitalization services.

Recapitalization services: Stabilize your company’s capital structure or improve its stock position with the help of recapitalization experts. These corporate finance and investment bankers, introduced by the Arcus Network, can help you borrow more effectively, leverage return on investment and boost shareholder value.

Acquisition screening: Identifying a strategic fit requires diligent research and a clearly articulated acquisition strategy. The approach needs to compliment the company growth strategy. In its M&A strategy, our approach is to first define a strategy for growth and to identify gaps within the growth strategy. It is only after due diligence at this step do we start a focused search to identify the right targets.