Philly Tech News "Young Companies to Watch"

Young

Companies

To Watch



This is my somewhat objective, somewhat subjective, imperfect ranking of Philly area startups in terms of their potential, which is normally on the right sidebar. I use financial data when available, and other metrics that are indications of market acceptance. Also considered are factors such the background of founders, quality of investors, amount of investment (though not always a good indicator), the quality of their proprietary intellectual property, and industry recognition. Not interested in revenue for its own sake, but rather the potential for profitability, competitive advantage and market value.


I've found this has generally been a good representative sample, although I've probably completely missed the boat on a few and certainly some other companies should be on the list that aren't. Startups are funny; some take off like rockets almost from the beginning, while others lie fallow for several years before suddenly finding traction.


These are all privately held companies, or companies which are less than 50% owned by a public corporation. The order in which they are listed is not meant to be a precise ranking, but a general indicator of their potential market value. All these companies rely on information technologies for their core offerings, and have headquarters or co-headquarters in the Greater Philadelphia area. The rankings tend to emphasize product-oriented ventures over agencies or consultancies. I update them regularly based upon new information. Four of these companies have been acquired in the last month.



Octagon Research Solutions (Wayne) Life Sciences clinical data management systems company recently announced it was adding 100 employees.

myYearbook (New Hope) Teen-oriented social networking site says it has $30 million annual revenue run rate. Acquisition announced by Quepasa for $100 million in stock and cash (mostly stock) on July 20. Backed by First Round Capital among others.

Portico Systems (Blue Bell) Provider Management solutions for Healthcare payers, recently acquired by McKesson for $90 million; backed by Safeguard Scientifics and Edison Ventures.

AppLabs (Philadelphia, Hyderabad, and London) Though most of its employees are elsewhere, AppLabs is a huge player in the applications software testing business.

InstaMed (Philadelphia) Though very different from Portico, another company focused on processing medical payments.

iPipeline (Exton) SaaS applications for marketing and CRM in the insurance industry.

StarCite (Philadelphia) Corporate event management site is 36% owned by Internet Capital Group. After a period a rapid growth, experienced declining revenue and losses over the past three years, although ICG claims there is "vibrant growth" in 2011 (though it doesn't cite financial figures). Starcite has reportedly hired an advisor to seek new investors or possibly sell the company. Underscoring its dilemna, competitor Cvent just raised $136 million.

ISGN (Bensalem) Mortgage processing and management systems; started building up around time housing bubble burst, but expanded through acquisition and has apparently done allright; raised $25 million from New Enterprise Associates and others in 2007.

Quintiq (Radnor & The Netherlands) Supply chain software vendor just sold reported 48% stake to LLR Partners and NewSpring Capital; says its revenue was $48 million last year, with 40% growth.

Neat Company (Philadelphia) Digital scanning and filing solutions. Much more of a software company than a hardware company.

SevOne (Wilmington) Sophisticated network performance management tools; Comcast was an early customer.

AWeber (Huntingdon Valley) A leader in the hot email marketing management software market for small businesses.

appMobi (Lancaster) appMobi has made waves with its mobile apps development platform. Grew out of Internet-based music service FlyTunes.

LifeShield Security (Yardley) Originally named Ingrid Home Security, IP-based home security system vendor has raised more than $30 million (just closed $8 million round) and is headed by former Nutrisystem CEO Michael Hagan; will they need a bigger partner?

Fiberlink Communications (Blue Bell) Offers cloud-based SaaS app for mobile device security (MaaS360), recently named to AlwaysOn Mobile 100 though I haven't seen any recent financial data for them.

NextDocs (King of Prussia) Uses Microsoft SharePoint to deliver Life Sciences document management solutions software; says it has 85 employees and revenue will be over $10 million this year.

Evolve IP (Wayne) Raised $16 million in 2008 and another $9 million in 2010; provides communications as a service to businesses.

Monetate (Conshohocken) First Round Capital-backed advertising technology firm serving ecommerce sites just moved into larger Conshy offices, says it hopes to double employment from 50 to 100 in 12 months.


Smarter Agent (Camden) Mobile real estate apps developer recently raised $6 million more, bringing its total funding to $18 million; investors include Ira Lubert.

Alteva (Philadelphia) Hosted VoIP & Unified Communications provider just acquired by Warwick Valley Telephone (NY) for $17 million.

Viridity Energy (Conshohocken) Developing software and systems to enable institutions and enterprises to create mini-smart grids. Raised $14 million from investors including Intel Capital early this year. Founded by ex-PJM Interconnection execs.

Safend (Philadelphia & Tel Aviv) Provides endpoint security tools, somewhat similar to Fiberlink Communications. Backing from Intel Capital.

MobileMD (Yardley) Provides HIE (Health Information Exchange) systems to providers such as Main Line Health.

TicketLeap (Philadelphia) Online ticketing platform; started off serving mostly smaller events but tested scaling up by handling ticketing for Comic-Con 2011.

Venmo (Philadelphia) Easy to use mobile payments system. All the big guys are getting in the market, but recent Accel Partners (Facebook etc) press release confirms some earlier but unconfirmed reports that they are an investor in Venmo.

Movitas (Bryn Mawr) Mobile apps for travel, tourism and meetings industries; acquired PhindMe, another local mobile startup, in 2010.


ClickEquations (Conshohocken) Search advertising software firm backed by First Round Capital and Internet Capital Group; recently acquired by another ICG partner, Channel Intelligence, for an undisclosed amount.

PHD Virtual (Philadelphia) Virtual backup system for VMWare and Citrix; Citrix is an investor.

RJMetrics (Philadelphia) Self-funded startup helps Internet-based companies analyze all the data generated by their websites; still small but seems to be on a nice growth path. Now has 11 employees, and moved from Camden to Philly in the beginning of this year.



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Daily Links 7/26/2011: SAP posts strong earnings; InterDigital files patent complaint

InterDigital Gains on Apple-Google Patent Rush (Bloomberg)
Suggests that InterDigital may fetch as much as $5 billion.

InterDigital Files Complaint Against Nokia, Huawei and ZTE With International Trade Commission
Company Seeks Importation Ban for 3G Wireless Products that Infringe on U.S. Patents (Business Wire)

With Bidders Watching, Interdigital Goes On A Mobile Patent Offensive (MocoNews)

SAP AG: SAP REFINES OUTLOOK FOR NON-IFRS SOFTWARE AND SOFTWARE-RELATED SERVICE REVENUE AT CONSTANT CURRENCIES AND NON-IFRS OPERATING PROFIT AT CONSTANT CURRENCIES (DGAP)
Pre-release update: SAP sees annual results at higher end of previously forecasted range based on strong second quarter.


SAP Reports 35% Growth in Software Revenue at Constant Currencies and 20% Growth in Non-IFRS Software and Software-Related Service Revenue at Constant Currencies for the Second Quarter (PR Newswire via MarketWatch)

SAP Q2 Revenue Rises 14 Percent (PC World)

SAP users not readily adopting BusinessObjects, user group finds (Computerword UK)

Lockheed Profit Rises 3.9% on F-35 Orders (Bloomberg)

AMETEK ANNOUNCES RECORD RESULTS (PR Newswire)

Comcast, NBCU Bring Dynamic Ads to VOD
Kraft, Chrysler are initial sponsors (Broadcasting & Cable)

Netflix proclaims Internet as future, but data caps loom as threat (Washington Post: Post Tech)
Quotes Wharton Prof Kevin Werbach.

Safeguard Scientifics Partner Company Portico Systems Closes Sale to McKesson (Business Wire)

Commonwealth to Host Meeting to Discuss Statewide Health Information Exchange (PR Newswire)



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Daily Links 7/25/2011: Comcast teams with Elemental Technologies for OTT technology; Netflix expects slower subscriber growth

Comcast Teams With Elemental Technologies to Stay Ahead of Netflix and Hulu (ReadWriteWeb)

Former Comcaster Kunkel Joins Microsoft's Entertainment Unit
Exec Previously Headed Up GuideWorks Joint Venture (Multichannel News)

Netflix, you’ve got some ‘splainin’ to do! (Gigaom)

Netflix Says Its Price Hike Will Clip Revenues For a Quarter (All Things Digital)

Netflix expects subscriber growth to slow in Q3 (VentureBeat)


DVL Announces New Data Center Installation At The Microsoft Technology Center In Malvern, PA (Business Wire)

appMobi’s cloudKey Revolutionizes E-Commerce Security by Eliminating Credit Card Databases
Patent-pending "Distributed Key" technology stores personal information locally, locked with secure keys delivered from the cloud (Business Wire)

Healthcare Disruption: Pharma 3.0 Will Drive Shift from Life Science to HealthTech Investing (Part I of III) (TechCrunch)

Behind Wharton's record-breaking female enrollment (Fortune)

Unisys Announces Second-Quarter 2011 Financial Results (PR Newswire)
Revenue down 10% despite 5% positive foreign currency impact.

Walker brothers are fast-moving entrepreneurs (Philly.com:
Philly Inc)

CDI IT Solutions Moves to New Office in Charlotte, North Carolina (PR Newswire)



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Philly Tech People News 7/24/2011

Vishay Announces Promotions for Two Executives (Business Wire)

International Battery Announces CEO Transition Plans and Executive Appointments (Business Wire)

MMIT Appoints VP of Business Development, Adds CTO (PR Newswire)

ONPATH Technologies Announces Steve G. Vogel as New Chief Financial Officer (PR Newswire)

Frances Berwick Promoted to President of Bravo and Style Media (Broadcasting & Cable)

NCTA Selects Snowden As Chief Of Staff (Multichannel News)

SAP Americas keeping cool with ice, lots and lots of it (Philadelphia Inquirer)

SAP Hopes Partners Will Rev up Mobile Apps Sales (PC World)

Church of God Sues Sony Pictures and Comcast for Copyright Infringement Over Logo (Torrent Freak)

Daily Links 7/22/2011: Reports (doubted by some) that Apple might bid on Hulu

Apple Said to Consider Making Bid for Hulu (Bloomberg)

Don’t Hold Your Breath on That Apple Hulu Deal (All Things Digital)

Analyst: Comcast Stock Price Values NBCUniversal at 'Close to Zero' (Hollywood Reporter)

Big Cable Braces For A Lousy Quarter (All Things Digital)
Comcast reports earnings on August 3.

Verizon CEO Ivan Seidenberg Steps Down, COO Lowell McAdam Steps Up (TechCrunch)
I admire Seidenberg greatly for challenging the Telco culture and investing in FiOS; whether that will ultimately be judged to have been a good investment remains to be determined.

IPhone Bolsters Verizon Results (New York Times)

FiOS Sizzles In Verizon's Q2, Topping $2 Billion
Fiber-Optic Network Services Now Represent 57% Of Telco's Consumer Wireline Business (Multichannel News)

Congress, FCC hit brakes on T-Mobile, AT&T merger (The Hill)

Show Us the Money: Five PA Venture Capitalists to Watch (Keystone Edge)

Digital Media-Buying Platform MediaMath Nets $20 Million
Startup to Expand Into Video, Social and Mobile Ad Buying (Ad Adge)
Previous investor Safeguard Scientifics leads Series B round.

SAP BusinessObjects Customers Await New Platform (Information Week)


Anexinet rebounds, seeks software pros (Philly.com: Philly Deals)

Publicis Revenue Increases on Latin America, Digital Media (Bloomberg via San Francisco Chronicle)

Lovell Minnick To Exit ALPS After 6 Six Years (PE Hub)

Ben Franklin TechVentures Named to Inc. Website’s Top-10 List (Press Release)
DreamIt Ventures also made the Inc. list (which I am not going to link to because their slide show keeps crashing my computer).



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Daily Links 7/21/2011: Comcast splits media business between WPP, Publicis

Comcast Splits Media Business Between WPP, Publicis
With NBC Acquisition, Conflicts Made It Difficult to Consolidate at One Shop (Ad Age)

TruePosition Alleges Plot Against Its 9-1-1 Location System
(PC World)

TruePosition Announces Renewal of Agreement with AT&T (Business Wire)

Moto Mobility Zooms 17%: Nokia Results, Patent Issues In Focus (Barron's: Tech Trader Daily)
The InterDigital effect?
Update: Apparently investor Carl Icahn is pushing MMI to realize the value of its patent portfolio

Congratulations to myYearbook (Business Insider)
By First Round Capital Managing Partner Chris Fralic.

Express Scripts will buy rival Medco for $29.1B (AP via Forbes)
Both have fulfillment operations in Philly area; merger could also mean more pricing pressure on Pharma companies.

July 2011 Business Outlook Survey (Philly Fed)
Not great, but a better outlook than last month.
Factory activity rebounds in Philly region (MarketWatch)

Philadelphia official fired for accepting meals, gifts from city contractors (Philadelphia Inquirer)

Comcast kills off Stephen King movie series (Marketplace)

Will Cisco Bail on Set-Top Boxes? (Light Reading Cable)

Case Study: Philadelphia Museum Uses Foursquare to Increase Awareness (Street Fight)

McDermott Says SAP Has `Great' Position in Brazil
(Video: Bloomberg via Washington Post)

Talk About Agile Commerce: Monetate has moved, into a cool new space (Monetate Blog)



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MoneyTree: US Venture Capital investment way up, but Philly area down

While venture capital investment nationwide showed a signicant increase in Q2 2011, in the Philly area VC funding was down, acoording to data released today in the MoneyTree report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA.)

Nationally, venture capital investments rose 19% in Q2 2011 to $7.5 billion in 966 deals, up 19% over Q1 2011. Internet-specific investments were reported to be at a ten year high, and investments in the Life Sciences sector also rose 37% from the previous quarter.

However, VC investment in the Philadelphia Metro area in Q2 2011 was $89 miliion, on 29 deals, down from $128 million in the previous quarter and the lowest amount since Q1 2010.

Of that $89 million, $30 million went to Neuronetics of Malvern, a company that uses magnetic fields to treat depression. There were few large IT or Internet-related deals; the largest was $18 million for Pet360 of Plymouth Meeting, a deal I wrote about a couple of weeks ago.


Other significant investments were in ProtonMedia of Lansdale ($4.5 million) led by Kaplan VC LLC, InstaMed Comunications of Philadelphia ($4 million) from the New Jersey Technology Council and US Bancorp, Collections Marketing Center, Inc. of Wilmington ($2.6 million) led by Milestone Venture Partners and Osage Partners, LLC, Agilence Inc. of Camden ($2.6 million) from MMV Financial, Inc., Aklero Risk Analytics, Inc. of Fort Washington ($1.2 million) led by Robin Hood Ventures, and TimeSight Systems, Inc. of Mount Laurel ($1.1 million) led by Contour Venture Partners and New Venture Partners LLC.

Smaller amounts went to Ryzing LLC (Philadelphia), Sanovia Corporation (Philadelphia), Careerminds Group, Inc. (Hockessin, Delaware), CityRyde LLC (Philadelphia), Yorn LLC (Conshohocken), and AlignAlytics (Wayne), formerly AlineGRC.

Daily Links 7/20/2011: myYearbook acquired for $100 million

Latino Social Net Quepasa Buys myYearbook For $100 million (paidContent)
Perhaps a bit less than I thought it might be worth.

This 21-Year-Old Just Sold Her Startup For $100 Million (Silicon Alley Insider)

Facebook For Latinos Quepasa Buys myYearbook For $100 Million In Cash And Stock (TechCrunch)
Includes letter from CEO Geoff Cook to employees.

Meet Google’s Latest Takeover Target: InterDigital (Wall Street Journal: Deal Journal)
Apple is also interested, according to this Bloomberg report.

TruePosition® Lawsuit Alleges Ericsson, Alcatel-Lucent and Qualcomm Conspired to Eliminate a Predominant Mobile Positioning Technology Used in Emergency Response and Law Enforcement (Business Wire)

Exclusive: Dotcom Era Survivor Cvent Raises $136 Million Round (TechCrunch)
Competes against Philly-based and ICG-backed Starcite in the corporate meetings management software business.

SAIC To Acquire Vitalize Consulting Solutions (HISTalk)
Based in Reading, MA, Healthcare IT consulting firm Vitalize has offices in Chadds Ford Kennett Square.


eBay Beats The Street; Revenue Up 25 Percent To $2.8B; PayPal Posts First $1B Quarter (TechCrunch)
Takes some charges from GSI Commerce acquisition.


Study: Sharp Rise in ERP Users Mulling Support Alternatives (PC World)

Lockheed Martin offers buyouts to 6,500 employees (Washington Post)
About 300 Valley Forge employees among those eligible for buyouts.

Lifeshield Security Locks Up More Than $8 Million in Third Round of Funding (Globe Newswire)

Unlock or unplug remotely with home automation (Philadelphia Daily News)

TE Connectivity profit beats forecasts (Reuters)
TE Connectivity (formerly Tyco Electronics) has its operational headquarters in Berwyn.

Warwick buys Alteva: Are hosted VoIP valuations rising? (NPRG Insights)

Oracle Makes Fusion Applications 'available' (PC World)



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Daily Links 7/19/2011: InterDigital to seek acquisition offers or sale of some IP assets

LLR Partners and NewSpring Capital Invest in Quintiq, Supporting its Continued Drive for Market Leadership (PR Newswire)

Quintiq raises capital from LLR, NewSpring (Philly.com: Philly Inc)
Says new investors' stake is 48%.

InterDigital Exploring Potential Strategic Alternatives (Business Wire)
InterDigital up 24% so far today on the news.

InterDigital explores ways to sell patents or company (Reuters)

Celtics-CSNNE deal includes an equity stake (Boston Globe)

Yahoo Would Buy Hulu For $2 Billion – But Only If It Came With Four Years Of Exclusive Rights (Silicon Alley Insider)

Oh no he didn’t: AT&T’s CEO calls DSL obsolete (Gigaom)

Cable Calls for Backup (Light Reading Cable)
Backup system co-developed by and tested at SCTE headquarters in Exton.

Comcast partners with ColoHouse for Fla. disaster recovery (CED
Magazine)

Battelle Places Order with Instem for Provantis Preclinical and submit-SEND Software Solutions
Instem Solutions to Automate Full Range of R&D Processes (Business Wire)

Greenlink Changing the Daily Deal Market with New Social Couponing Product (Business Wire)

Winshuttle acquires Calif. software company ShareVis (TechFlash)

How SAP Business ByDesign fits into the SaaS ERP landscape (SearchSAP.com)

SunGard Availability Services Announces Expansion into India (PR Newswire)

Texting While Walking Could Get You Fined in Philly (PC World)
Apparently, the story is not accurate; there will be no citations or fines for texting while walking, the Nutter Administration says.



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Yuengling turns to Wayne-based Deacom for ERP System

Pottsville-based D.G. Yuengling & Son, which is said to be the oldest continously operating brewery in the US (founded in 1829) and the fourth largest by volume according to The Brewing Association, has a name that is almost generic for lager in much of Pennsylvania. And its growth, particularly over the past 15 years, has seen its distribution area expand to include most of the East Coast (it just recently announced it is moving into Ohio).


Although the Yuengling family, which still owns and runs the company, has historically been conservative about pursuing growth, consumer demand in a sense has pushed the company to grow with it; Yuengling now produces about 2.2 million barrels per year, up from less than 500,000 in the early 1990s. Yuengling has three brewing facilities now: two in Pottsville-the historic building and a larger one built in 2000-and one in Tampa. It came close to purchasing another in Memphis last year but decided against it, expanding its newer Pottsville brewery instead. (See a recent profile from the Allentown Morning Call).


Yuengling's expansion had stretched its old information systems, consisting mostly of a Unix-based system and various spreadsheets, which in turn may have limited its ability to pursue new opportunities. So it turned to Deacom Inc. of Wayne to increease its ability to manage mutiple functions across the enterprise by implementing Deacom's ERP (Enterprise Resource Planning) software. The system went live in June. Functions implemented include accounting, sales order management, regulatory reporting, purchasing, production scheduling, inventory, order entry, and retail point of sale (POS). Wendy Yuengling, Project manager at D.G. Yuengling & Son, said in a statement, "“We wanted a system that would reduce the redundancy in our work and minimize much of the manual data entry, which exposed us to the potential for human error. In addition, we needed the ability to work within one system of shared data that would give us greater control and enhanced reporting capabilities".


A key to Deacom being chosen is that it is designed to handle the specific requirements of batch process manufacturing, as opposed to discrete manufacturing. Deacom, which was founded in 1995, says it has over 100 customers in industry segments including lumber and building supplies, food processing, paint, specialty chemicals and pharmacuetical manufacturing. Founder Jay Deakin, who grew up in Gladwyne and played on the golf team at the University of Miami (FLA) back when they had one, started Deacom out of his mother-in-law's basement. In a telephone interview with Philly Tech News, he said that he learned about the specific needs of batch process manufacturers when he built a system inhouse for a previous company he managed because he could not find a adequate solution off-the-shelf. Deacom's application modules are based on proprietary software it developed, though the tools under the hood are mostly Microsoft, such as SQL Server and .Net.


Deakin says he often goes up against the big guys (SAP, Oracle) in competitive situations. The company has no debt or VC money, according to Deakin, and is looking at a period of accelerating growth after being fairly conservative about expansion for a while. Headcount is now 30, and he sees that increasing to about 40 over the next 12 months. While he says Yuengling is not Deacom's largest account, it is probably its most visible to the public.



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