Updated, revised and expanded: Philly Tech News Young Companies to Watch






Tom Paine



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Young

Companies

To Watch


After considerable delay (it took me longer to put this together than I anticipated) here is my updated, revised and expanded (to 41 companies, actually, from 30 previously) Philly Tech News "Young Companies to Watch".

Rankings reflect a general, though by no means precise, estimate of relative market values based on revenue or profits when reported, growth, invested capital and reported valuation points, and a scattering of any other data points and inferences that I could gather. Also I look at non-quantitative indicators such as a startup's intellectual property, the track record of its leadership, and evidence of market acceptance.

The depth and quality of these Philly-area startups, I believe, is much stronger than in the past, and there many other excellent startups not on this list but are included on the bench (see others to watch). And then there is a entirely different tier of earlier-stage startups that others in Philly area have compiled information on.

This is not a revenue-driven list; relative market values may vary greatly from revenue comparisons according to the quality of a company's intellectual capital, its market acceptance, and its long-term potential for growth and profitability. There are many other excellent consulting firms and agencies, but for this purpose I focus on product-driven businesses.

Each company is privately held (though publicly traded corporations may hold a minority interest in some, and InsPro Technologies has a small public float but most of its value is in its non-listed preferred shares) and has an official headquarters or co-headquarters in the broader Philadelphia region. All of these companies' strategies are largely driven by proprietary information technology.

At the least, the top five companies (SevOne, iPipeline, InstaMed, Quintiq & Monetate) may have the potential to become IPO candidates if they do not have some other exit first. Another notable trend is the strength in the insurance software space, which appears to be booming. iPipeline, InstaMed, InsPro Technologies, Unirisx and Adaptik are all represented, and there is also Adminovate which is not included here now but may be soon.

I update these rankings on a regular basis as new information becomes available, and welcome input or insights that that might enhance their accuracy.

Congratulations to Philly Tech News' Young Companies to Watch.


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Daily Links 5/28/2013: Baltimore's Videology raises $60 million from investors including Comcast Ventures, NEA





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AppNexus CEO Says 'Multi-Billion Dollar Exit' Expected (Business Insider)
First Round Capital was a seed investor.

Fashion Media Company Refinery29 Acquires Fellow First Round Capital Startup, SocialBomb (Business Insider)

Online Video-Ad Network Tremor Video Files For Its IPO (TechCrunch)
First Round Capital has a small stake in Tremor (according to its website) through Tremor's acquisition of FRC portfolio company SanScout. FRC is not listed as a major shareholder on Tremor's S-1.

The Cloud Company: People or Money? (New York Times: Bits)

Court Rules Comcast Did Not Discriminate Against Tennis Channel
Finds insufficient evidence to support FCC decision
(Broadcasting & Cable)

Videology Reels in $60 Million in Fresh Capital (Ad Week)
Comcast Ventures among investors in Baltimore company.




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A Legacy Feud in Tech (New York Times)

Dell's downsized cloud ambitions might actually work out (InfoWorld)
Boomi remains key component of strategy.

Clearwire to pull Huawei from network (The Register)

SAP, SAP, Wherefore Art Thou SAP? (In Full Bloom)




Yanked From The Cloud: Why Connectify Unplugged Its Switchboard Campaign (TechCrunch)

More tax increases won't fix what ails the economy in Philly (OpEd/Philadelphia Inquirer)


Daily Links 5/24/2013



Comcast's David Cohen: U.S. Broadband Is World Class
Says companies have invested $1.2 trillion in past couple of decades
(Broadcasting & Cable)

Hulu Said to Attract 4 Bidders(Fox Business)

KKR, Yahoo and Silver Lake/WME join list of Hulu suitors (LA Times: Company Town)
Additional bidders since earlier report.
"In return for regulatory approval of that deal, Comcast agreed to be a silent partner in Hulu. It cannot increase its stake but it also does not have to sell, even if the other two partners do". (Clarifies point which had not been clear to me.)



Henrik Fisker joins Hong Kong tycoon to salvage Fisker: sources (Reuters via Yahoo News)

TECH STOCKS: Salesforce, Google Losses Hit Tech Stocks (Dow Jones Newswires via Fox Business)





Major reorg at SAP: Dalgaard departs, and other goings on



With portfolio consolidation in sight, SAP cloud chief Lars Dalgaard steps down (Gigaom)

SAP shakes up development organization (PC World)
“We’re not letting Lars go,” McDermott added. “He’s our strategic cloud adviser. We’re not turning off his email and he can keep his PC.”



SuccessFactors CEO Dalgaard Leaving SAP in Cloud Business Shake-Up
(All Things D)


Good move at SAP (Vinnie Mirchandani/Deal Architect)

All change at SAP (Den Howlett/Diginomica)

SAP Said to End Talks to Buy Jive Software in Past Month
(Bloomberg)

Workday Says Getting Customers From Oracle, SAP (Investor's Business Daily)

SAP touts service that sells customer data from phone firms (CNET News)



ValueVision to change brand name from ShopNBC to ShopHQ; reports first profit in 7 years (Comcast owns 14%)

Tom Paine



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Eden Prarie, Minnesota-based ValueVision, which operates its home shopping network under the brand name ShopNBC, announced yesterday that it will rebrand itself as ShopHQ.

COO Carol Steinberg (a QVC and David's Bridal veteran and Temple Fox School alum) said that the company's NBC branding caused "a little bit of a disconnect with our business -- they're broadcasting, and we're retail." The company said it had been considering a name change for some time.

While the move will save ValueVision $4 million per year in licensing fees, Steinberg indicated that the rebranding will not change its relationship with NBC parent Comcast, which owns 14% of ValueVision, and that Comcast had been supportive of the decision.

ValueVision also reported yesterday its first quarterly profit since 2006, earning $1 million on revenue of $151.4 million.

In the small world of home shopping television, ValueVision is a minnow compared to West Chester-based QVC and HSN (Home Shopping Channel). ValueVision's top management is heavily staffed by QVC veterans. There has been frequent discussion by QVC parent Liberty Interactive's management about the possibility of buying out the 80% or so of
HSN it does not already own and combining its operations with those of QVC. Comcast, which at one time owned QVC, has not indicated any recent interest in expanding in the home shopping business. Its stake in ValueVision came through the acquisition of NBCU.

While the cable TV platforms are still very valuable merchandising platforms, the home shopping channnls are conducting an increasing amount of their business online. ValueVision said 46.2% of its sales came through online orders last quarter. But
while the ecommerce industry is booming, the home shopping channels are seeing slow growth.




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Daily Links 5/22/2013: Workday tops estimates with 61% growth; ValueVision to drop ShopNBC brand name





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TruePosition Tackles Indoor Locating (Directions Magazine)

Alteva Announces Workforce Reduction (Marketwire)
Does not effect Philadelphia; reducing 20% of staff in legacy New York telecom business.

Interactions Secures $40 Million of New Financing (PR Newswire)
Radnor-based Cross Atlantic Capital Partners participates again in new round for Massachusetts-based Interactive Voice Response vendor.

Workday reports sales up almost 61% (MarketWatch)
Beats on revenue; posts slightly smaller loss than expected.

HP's Whitman reiterates 'multi-year journey' amid Q2 revenue miss
(ZDNet)
At least as long as her contract, I suspect.

Microsoft Unveils Xbox One Entertainment Console (Hollywood Reporter)

Pay TV is hurting, and even skeptics now admit cord cutting could be at fault (Gigaom)

Cable Companies Chafe as Low-Rated Channels Change Names (Advertising Age)

ValueVision Media to Rebrand Its ShopNBC Electronic Retail Operations as 'ShopHQ' -- 'Your Headquarters for All Things Shop' (Marketwire)
Comcast owns about 15% of ValueVision (inherited through its acquisition of NBCU) so it
remains to be seen what this means for Comcast's future interest in the home shopping channel. See more info on switch via Internet Retailer, as ValueVision reports first quarterly profit since 2006.

Comcast, the Mets, and Other Winners in the New Man City-Yankees MLS Franchise (Business Week)




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Tigerlabs Shows off First Class of Healthcare IT Accelerator Grads in Princeton

Esther Surden
Publisher & Editor, NJTechWeekly.com


Tigerlabs Health (Princeton) showcased its first Healthcare IT cohort at a Demo Day on May 15, 2013. It unveiled an impressive group of six companies. Four of the startups had spent three months at the seed accelerator.

“What we’ve been doing is laser focusing on partnerships we had been forming with all of the industry in the Princeton area,” Bert Navarrete, Tigerlabs founder, told the investors, consultants, mentors and press who had come to see the demos. He thanked the program’s mentors, whom he said had spent countless hours and days working with the accelerator’s individual companies.

Tiffany Bogich talks about PLOM.io which makes model-based science social. | Esther Surden

Many of the featured companies’ founders had Princeton University connections. Several startups came from Europe via Princeton. A number of the founders are returning to the places they came from, but some are staying in New Jersey as they develop their products further.

New York City Technology in Medicine: New York City Technology in Medicine is building out an iPhone app that can measure certain attributes of pupil dilation to diagnose a host of medical conditions. Speaking to the group, CEO Ryan Saleh said current methods of measuring pupil activity are very expensive or consist of shining a penlight in someone’s eyes and taking a subjective measurement. Mobile devices with high-resolution image sensors change that, he noted. The app takes a series of images over the span of two seconds. Cloud software compares the images to diagnostic algorithms, producing a result in a matter of seconds.

“We can do a robust neurological exam right from the device,” said Saleh. Cofounder Jeff Myers said individual apps to test for sobriety, sleep patterns and head trauma would be produced. The company wants to “white label” these apps so brands can offer them, he added. “Imagine a Heineken-branded sobriety app,” suggested Myers. An additional goal is to get this technology into every intensive care unit in the country, he stated. The company said it will close a round of seed funding in August 2013. The founders will be moving back to New York from Princeton and splitting their time between Princeton and a coworking space in SoHo, Saleh told NJTechWeekly.com.

CareTree.me: Traveling to the Tigerlabs accelerator from Chicago was CareTree.me. President Carl Hirschman — a serial entrepreneur with two successful exits — presented software that tackles a thorny problem shared by home health agencies, caregivers and the families they serve: communication. The company is selling a  Health Insurance Portability and Accountability Act (HIPAA)-compliant online portal to the largely low tech home health agency market. Caregivers currently use paper checklists to convey information to the agency by either driving it there or faxing it in. When a family member needs information for a doctor or a hospital, it takes time for the agency to get back to the family.

The portal centralizes information and connects all the stakeholders: patients, caregivers, families and doctors. “We’ve designed it to be as easy as Facebook to use, so anyone can quickly get the hang of it,” said Hirschman.

The company took the idea through Chicago Lean Startup Challenge and built a beta site. Hirschman said some of the big names in the home health industry have invested in the company. Brian Bauer, Princeton grad Dan Zauber and Albert Pak compose the rest of the team. Hirschman says his company is heading back to Chicago at the end of the month but had a fabulous time in Princeton and “is working on ways to make operations in both places work.”

LifeVest Health: This company — which has moved from Denver to Princeton — offers a clever solution to the problem that plagues corporate wellness programs: they fail to deliver a return on investment to the companies that employ them. Said CEO Jon Cooper, “We help businesses save money and improve the health of their workforce through a stock tied to health … . Improve your health and your stock value rises and you get paid. Neglect your health and the value drops and you pay the price.”

The LifeVest Health founders say their solution differs from outcome-based programs, through which users have to hit biometric thresholds before they are rewarded. “Those people who drive the majority of the cost see the thresholds and say, ‘I’m not going to get there this year and I’d be lucky if I will get there in three years,’ ” said Cooper. They are not rewarded if they lose 15 pounds, and they may need to lose 30, for example, he said. LifeVest’s solution rewards employees as they work toward their goals. Further, it rewards companies with a business model that says companies shouldn’t have to pay if people don’t change, said cofounder Mike Logsdon.

Plom.io: This startup, which created a lot of buzz among investors at the demo event, aims to create a public library of scientific models on the Web so scientists don’t have to reinvent the wheel. Founder Tiffany Bogich said she had spent the past 10 years making mathematical models of how quickly certain viruses like SARS are spreading and how they can be controlled. She became frustrated with having to recreate previously published work just to begin her own research. When a pandemic threatens, “we have no tools in the scientific community to collaborate to solve this problem,” she said.

Plom.io helps resolve these issues and others. For example, if there are flaws in the models used, when new data comes in or if the results change, scientists can change their model on Plom.io in real time, said Bogich, using version control.

Scientists can also comment on and review models online. The software can be applied to many scientific fields and extended for use in finance and pharmaceuticals, said Bogich. The founders have completed back-end development work and expect to publicly launch in early fall, but they need funds to scale their work. “The Plom.io team will be staying in the Princeton/NYC area to take advantage of the network of health IT contacts in the Princeton area and the growing tech community in NYC,” said Bogich. Her team includes Sebastien Ballesteros and Joseph Dureau, who are based in Princeton and Paris.

Two recent additions to the Tigerlabs Health accelerator are The DentBoard and Clue.

The DentBoard: The DentBoard, which came to Tigerlabs via Nashville and Princeton according to Navarrete, is developing cloud-based business intelligence software for dentists. Cofounder Caleb Bastian is a dentist earning a Ph.D. in mathematical modeling from Princeton. Dentists are leaving a lot of money on the table due to enormous inefficiencies in their practices, he stated. There are several crucial issues; patient satisfaction is one and insurance is another. Insurance companies are responsible for 60 percent of dental office revenue, but they try to minimize payments by delaying or denying claims. Furthermore, 70 percent of dental office expenses are for labor, but dentists have no way to gauge their employees’ productivity. Likewise, dentists don’t have a way to understand prevailing fees in their communities in real time, as information is often outdated and not granular.

The easy-to-use software — which already interfaces with popular in- use dental software — will help dentists better manage their practices and increase the standard of care, said Bastian. The company has already had a $200,000 seed round. Bastian’s cofounders include Jose Garmilla and Tim Kunisky.

Clue: Clue came to Princeton all the way from Berlin. CEO Ida Tin pitched her company, which provides women information about their fertility all through their reproductive days. “We are building an app and a piece of hardware to enable women to take out their phone to see if they can get pregnant on any given day,” said Tin. The hardware is in development, and although Tin couldn’t release details, she said it would interface with the body to provide real-time information about where a woman is at any given time in her cycle. The company will sell disposable components for the hardware via a subscription model, she told the group. Tin’s cofounder is Hans Raffauf.




Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and is reposted here with her permission.



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Villanova law professor, tax expert, testifies in Apple tax hearing

Tom Paine



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J. Richard Harvey, a tax expert at Villanova University School of Law, testified Tuesday in front of a Senate panel exploring Apple's tax strategies, saying "I suspect that what Apple has done is within the bounds of what's acceptable in international tax law." But he also said he nearly 'fell out of my chair" when he read that Apple said it did not rely on tax gimmicks.

Of course, the definition of "gimmick" is open to interpretation. My experience is that large corporations spend as much as they need to in order to legally minimize tax bills, as long as the ROIs from those expdenditures are adequate. And most corporations consider it their fiduciary responsibility to shareholders to do so, again as long as it is clearly within the law.

Harvey joined the Villanova School of Law as Distinguished Professor of Practice in 2010, according to Villanova's website. He has extensive high level experience at Treasury and the IRS under several administrations, as well as being a retired Managing Partner at PricewaterhouseCoopers. He was one of two academic tax experts to testify in front of the panel, the other being Stephen E. Shay of Harvard Law School.