Tech Edge

Next Year's Top 20 Startups

Next Year's Top Startups

Don Bayley | E | Getty Images

During the first nine months of 2012, venture capitalists closed just shy of 2,700 deals with entrepreneurs, investing nearly $20 million, according to the National Venture Capital Association and PricewaterhouseCoopers.

Not surprisingly, the bulk of the top deals (those boasting investments of $25 million or more) are in the software category, but biotech and medical devices/equipment are both putting in strong showings this year.

Here's a look at the startups that landed the most venture capital funding through the end of the third quarter — and are now poised to be the hottest young tech companies of 2013.

By Chris Morris
Posted 11 Nov. 2012

Social Finance, Inc. (San Francisco)

Photo: Sofi

Operating under the name SoFi, this startup is trying to open new lending avenues for MBA students, by connecting student and graduate borrowers with alumni investors. It's a crowdfunding method the company says offers lower fixed rates than federal and private loans.

(VC funding raised in 2012: $77.2 million)

Yammer (San Francisco)

Photo: Yammer

To help prevent employees from inadvertently broadcasting a company's proprietary information over AIM or Facebook, Yammer created private social networks for businesses. Its clients include Shell Oil, 7-Eleven and DHL.

(VC funding raised in 2012: $85 million)

Trion Worlds (Redwood City, Calif.)

Photo: Trion Worlds

This video game developer specializes in massively multiplayer online games (similar to Activision-Blizzard's "World of Warcraft"). Its biggest upcoming title is "Defiance," a joint project with the SyFy cable network that will be both an MMO game and a weekly series on the network, which has committed to a full season order.

(VC funding raised in 2012: $85.1 million)

Aragon Pharmaceuticals (San Diego)

Photo: Aragon Pharmaceuticals

Aragon is a pharmaceutical company with a focus on creating treatments for hormonally-driven cancers (such as prostate, breast or ovarian). The company has one product in a Phase I/II clinical trial and is working on others designed to both block and destroy hormone receptors that drive tumor growth.

(VC funding raised in 2012: $87.8 million)

ConforMIS (Burlington, Mass.)

Photo: Conformis

ConforMIS offers knee replacement options designed to conform to the customer's anatomy, rather than a one-size-fits-all approach. The company uses CT data to precisely size and shape the implant.

(VC funding raised in 2012: $89 million)

Sundrop Fuels (Longmont, Colo.)

Photo: Sundrop Fuels

This green energy company is working to reduce America's dependence on foreign oil by creating what it calls "ultra-clean, affordable biobased 'green gasoline'" out of products like plant stems, leaves and trunks.

(VC funding raised in 2012: $90 million)

GitHub (San Francisco)

Photo: Github

GitHub is a social coding startup, letting developers share code and offering hosting for projects. The VC funds it raised came from Andreessen Horowitz, which believed in the concept so much it made its largest-ever investment in the company. To date, more than 2 million people have used the service.

(VC funding raised in 2012: $99.5 million)

Castlight Health (San Francisco)

Photo: Castlight

Castlight focuses on improving transparency in health care pricing, letting employees of self-insured companies shop for tests and procedures based on both cost and quality, since prices vary so widely between hospitals and doctors.

(VC funding raised in 2012: $100 million)

Pinterest (Palo Alto)

Photo: Pinterest

This social photo sharing Website has stormed the Web this year, letting users browse (and 're-pin') the collections of others for inspiration. As of August, it had just under 25 million members.

(VC funding raised in 2012: $100 million)

Bloom Energy (Sunnyvale, Calif.)

Photo: Bloomenergy

This fuel cell maker currently boasts a valuation of just under $3 billion. Its clean energy products are used by Google, WalMart, Staples and The Coca-Cola Company. And it counts Colin Powell among its board members.

(VC funding raised in 2012: $100 million)

Donuts, Inc. (Bellevue, Wash.)

Photo: Donut

Despite the name, Donuts Inc. has nothing to do with tasty breakfast treats. It's a domain name registrar — and it raised this money in a Series A round, which is quite rare. The company, which has applied for 307 top-level domains, will let businesses and individuals register generic top-level domains (letting them have websites such as "childrens.doctor" or "Top40.radio").

(VC funding raised in 2012: $100 million)

Fab.com (New York City)

Photo: Fab

What differentiates this online retail site from others is it handpicks its merchandise, letting shoppers look for items (ranging from shoes and clothes to furniture and jewelry) that are a little more unique than mass-market stores. It's the online equivalent of a boutique store — but on a big scale.

(VC funding raised in 2012: $100.8 million)

Elevance Renewable Sciences (Woodbridge, Ill.)

Photo:  Elevance

Elevance is striving to bridge two very different industries, making specialty chemicals out of renewable oils. The resulting products can be used in everything from detergents to personal care products to fuel.

(VC funding raised in 2012: $104.4 million)

Drilling Info (Austin, Texas)

Photo: Drilling Info

With over 20,000 users, Drilling Info tries to make the hunt for gas and oil faster and safer by providing a comprehensive database of land, well and production information. Its investors include Insight Venture Partners, which previously bet on Tumbler and Twitter.

(VC funding raised in 2012: $116.8 million)

Box, Inc. (Los Altos, Calif.)

Photo: Box

Box, a provider of cloud-based business software, recently was named a leader in online collaboration software by Forrester Research. Its clients include Procter & Gamble, Six Flags and Clear Channel.

(VC funding raised in 2012: $125 million)

Harvest Power (Waltham, Mass.)

Photo: Harvest Power

This green energy company focuses on helping communities produce renewable energy — as well as nutrient-rich soils, mulches and fertilizers — from organic materials, mostly food waste.

(VC funding raised in 2012: $125 million)

Sapphire Energy (San Diego)

Photo: Sapphire Energy

Crude oil doesn't have to come from the ground, according to Sapphire Energy. This green energy company produces it from algae. The product is compatible with the existing petroleum infrastructure, and gas created from it achieved an 91 octane rating — the same as "regular" gas at any station.

(VC funding raised in 2012: $139 million)

Square, Inc (San Francisco)

Photo: Square

Square has been growing rapidly, thanks to its technology which allows individuals and businesses to accept credit card payments on mobile phones, by using either a plug-in device or entering the card's details on the phone.

(VC funding raised in 2012: $200 million)

SquareTrade (San Francisco)

Photo: Square Trade

With so many gadgets in people's lives, SquareTrade hit upon the idea of offering extended warranties on them. It's the primary warranty provider for Amazon, eBay and Buy.com. The company's hook is regardless of where someone purchased the item (online auctions, CraigsList, brick and mortar, etc.), it's eligible for a SquareTrade warranty.

(VC funding raised in 2012: $238 million)

Fisker Automotive (Anaheim, Calif.)

Fisker produced the world's first plug-in hybrid electric vehicle, which debuted at the 2008 North American Auto Show. The first cars began rolling out to customers in late 2011 and a second model is on the way for 2013.

(VC funding raised in 2012: $381 million)