Utah’s “Silicon Slopes” has proven to industry-leading tech companies that it has what it takes.
Before 2018, Utah’s largest recent exit had been Adobe’s $1.8 billion acquisition of Omniture in 2009. Now two more Utah tech companies have entered the public market — educational tech company Pluralsight and analytics purveyor Domo, which have market caps of $2.98 billion and $431 million, respectively. To cap it all off, experience management software firm Qualtrics was acquired by SAP for $8 billion, making it the largest acquisition of a privately held VC-backed enterprise software company in history.
“We always knew [Utah] was a place to seed good opportunities. The question then was how big can you grow here,” Sid Krommenhoek, managing partner at Utah’s Peak Ventures, told VentureBeat.
“When I first started in venture 15 years ago, the perception was that you couldn’t build a big company in Utah. Obviously, that’s now all out the door,” Gavin Christensen, founder of Salt Lake City’s Kickstart Seed Fund, told VentureBeat.
With Pluralsight, Domo, and Qualtrics having exited, the spotlight now turns to the other local startups awaiting their turn. With that in mind, VentureBeat asked three Utah investors for their take on the next generation of local startups to watch. It’s also worth noting that over the past few years more established companies — like Ancestry, InsideSales, and Vivint Smart Home — have been rumored to be going public or getting acquired (Ancestry filed paperwork to go public in 2017, but those plans are on hold).
Some of the companies investors mentioned are included below. Most of the startups on this list began taking on venture capital earlier in their life cycle than previous generations of Utah tech companies, which could set them up for even quicker growth than local startups have seen in the past.
Founded in 2010, Lucid develops collaborative graphic design software. The company has two products — Lucidchart, which helps teams work together on diagrams that can then be integrated with a host of other enterprise apps, and Lucidpress, a brand and design management platform. As of October, Lucid had more than 15 million users, and it claims that 96 percent of the Fortune 500 uses its software. The company has raised more than $114 million in funding from investors that include Kickstart Seed Fund.
“It’s like Qualtrics in the sense that it’s been profitable for years now and it’s still growing at an incredibly fast rate,” said Christensen.
There’s no shortage of software tools to help individuals prepare taxes on their own, but Canopy develops software for accountants and tax management professionals. Canopy’s software claims to help accountants automate busy work, like more easily linking spouses’ and dependents’ profiles and setting auto reminders about when to send requests for signatures or paperwork. As of March, the company claimed to have more than 5,000 customers, who in turn served 1 million clients. Founded in 2014, Canopy has raised about $72 million in funding from investors, including Wells Fargo Strategic Capital, EPIC Ventures, and Pelion Ventures.
Pelion Ventures associate Susannah Duke says the company is exciting in that it’s “tackling an old paper industry ripe for disruption.”
Divvy burst onto the Utah tech scene just over a year ago, but the company has quickly attracted a lot of attention. Divvy has developed a free, mobile, real-time expense platform. The company makes money by taking a portion of the interchange fee from a credit card transaction.
In less than a year, Divvy raised three rounds of venture capital for a total of more than $52 million in funding. Investors include Insight Venture Partners, as well as Peak and Pelion Venture Partners. When VentureBeat last spoke with Divvy in July, the company said it had racked up more than 700 customers seven months after its public launch.
All three investors VentureBeat spoke with pointed to Divvy as a company to watch, with Ben Lambert, a Divvy board member and Pelion partner, telling VentureBeat in an email, “they are growing faster than any other company, from a revenue perspective, that we have invested in or even evaluated.”
Founded in 2008, BambooHR develops HR software for the small to medium-sized business and handles everything from applicant tracking to performance reviews. Its customers also include Asana, Foursquare, and SoundCloud. As of November, the company had more than 12,000 customers, with 1 million employees between them.
Both Krommenhoek and Christensen praised BambooHR, though they aren’t investors.
“It’s a company that’s growing at a strong clip, and is also one that is not looking for spotlight or attention,” Krommenhoek told VentureBeat.
“A lot of our companies use these guys to manage their HR,” Christensen added.
CEO and cofounder Eric Rea’s inspiration for Podium came from his father, a tire shop owner. Rea’s father didn’t have the time to monitor reviews on sites like Yelp and Google, so Rea developed software that could help businesses manage reviews. Now the company has added more features to help businesses respond to and draw insights from customer messages.
As of June, Podium had over 20,000 customers. The company also made this year’s Inc. 5000 list of the fastest-growing privately held companies in the U.S., with a 2017 revenue of $30.2 million and a three-year revenue growth rate of 13,645 percent.
Since launching in 2014, Podium has taken on just under $100 million in venture capital. Out-of-state investors include Accel, GV, IVP, and Y Combinator, and local backers include Peak Venture Partners and Kickstart Seed Fund.
“Podium has the potential to reach heights more quickly than other companies in the past,” said Krommenhoek.
Correction, 4:25 p.m.: Updated with Podium’s correct list of investors.
Correction, 11/19: Updated to correct that Kickstart Seed Fund, not Pelion Ventures, invested in Lucid Software.