It was the best of times, it was the worst of times &8212' at least for Silicon Valley startups in 2010.
While many smaller, lesser known newbies languished as venture capital investments declined overall, those that did score, scored big, and have kept themselves in the headlines ever since.
So where did VCs put their money in &8216'10 VentureBeat teamed up with venture capital analytics and reference researchers‚ VC Experts to bring you the top 10 largest single investments in tech startups in 2010 &8212' and why they had so many investors foaming at the mouth.
Microblogging darling and San Francisco-based startup Twitter claims the crown for the largest single venture capital funding in 2010, after it scored a tidy $205 million infusion and $3.7 billion valuation on Dec. 12. The interest in the company is understandable: over the last year Twitter users sent 25 billion Tweets and added more than 100 million new registered accounts. During the same period, the company grew from 130 people to more than 350 today and is rumored to be looking for new digs in its hometown &8212' as well as an IPO that could come as soon as this upcoming summer. Kleiner Perkins Caufield &' Byers led the round.
White-hot social gaming company Zynga raised $147.4 million on June 14 from Japana4‚¬a4„s‚ SoftBank, as it started its push into the lucrative and game-crazed markets of Asia and pulled away from the pack as the clear leader in the gaming community. The maker of FarmVille, and more recently, CityVille, now boasts 261.6 million monthly active users of Facebook, a massive spike from its 198 million monthly active users in November. Founded in 2007, Zynga has more than 1,300 employees, with‚ some recent valuations show that‚ Zynga could be valued above $5 billion, larger than Electronic Arts, one of the largest video game publishers in the world.
Groupon, a social buying startup that offers deep discounts on daily deals in conjunction with local merchants, has been an eye-catcher all year for investors, grabbing $135 million on April 19 from Russian investment firm‚ Digital Sky Technologies as it began a year of raging growth and notoriety. The Chicago startup quickly became the dominant player in the daily-deal space. It‚ snubbed a $6 billion buyout offer from search behemoth Google and is now rumored to be seeking a $1 billion round of financing &8212' making Groupon a company to watch well into next year and beyond.
Live video streaming company Ustream, which supplies content to web sites and cell phones, on Feb. 1 raked in $75 million in a second round of venture funding led by Tokyo-based Softbank. The Mountain View, Calif.-based‚ company immediately put the funding toward expanding its presence in Japan, China, Korea and India. VentureBeat has used Ustream technology to broadcast live video from the‚ Consumer Electronics Show, using equipment that allows a single person with a video camera and Ustream broadcasting pack to upload live video to a web site. Users can also interact with each other in real-time by using the Ustream Social Stream. The service‚ currently has over 45 million monthly unique visits with an average of 20 to 30 minute viewing time per stream and most recently captured headlines for breaking‚ viewing records during the Chilean miner rescue.
Boston-Power, maker of advanced lithium-ion batteries for electric vehicles and grid storage applications, landed $66.4 million in a fifth round of funding on June 10, a major score for a company on the brink of mass commercial scale in the emerging automotive and utility sectors. The company said it would use the money to double its workforce, as well as grow its manufacturing center in Taiwan, and add to its sales, marketing and R&'D operations. Existing investors Foundation Asset Management and Oak Investment Partners both led the round, which included investments from previous backers Venrock Associates and Gabriel Venture Partners.
Games-on-demand company‚ OnLive raised $60 million in a strategic round of funding from BT, the former British Telecommunications, on May 13, as part of a plan to expand its games on demand service to Europe.‚ OnLive&'s rivals include Otoy, Gaikai, InstantAction and GameStreamer. OnLive, founded by entrepreneur Steve Perlman, has more than 20 games available from game publishers such as the former Electronic Arts Ubisoft, Take-Two Interactive and THQ.‚ OnLivea4‚¬a4„s basic technology is compression, then a video is sent back over the broadband line to the usera4‚¬a4„s computer. OnLive&'s goal is make that computing appear to happen in the cloud rather than on the usera4‚¬a4„s own computer.
Smartpen maker Livescribe, which launched at the‚ DEMO conference in 2008‚ scored $44.8 million on Sept. 22, as the company pushed to further develop its product. Livescribe&'s pens let students and professionals record lectures and link the playback of those lectures to written text. If you want to play back a section of a lecture, you simply tap on the written text. You can also use the pens to run writing-related apps and to get quick answers to math problems or translate foreign words. Crosslink Capital led the round, joined by Scale Venture Partners, Qualcomm, TransLink Capital, Presidio Ventures, Keating Capital and existing investors VantagePoint Venture Partners, Lionhart and Aeris Capital.
Video ad network Tremor Media pulled in $40 million on April 28, which the company said it would use to improve its Acudeo ad delivery platform to identify individual website visitorsa4‚¬a4„ demographics on the fly, rather than needing to lump entire sitesa4‚¬a4„ audiences into buckets. Draper Fisher Jurvetson Growth Fund, Triangle Peak Partners, Canaan Partners,‚ Meritech Capital Partners,‚ SAP Ventures,‚ European Founders Fund,‚ Masthead Venture Partners and‚ DFJ Growth.
Business social networking company‚ Jive Software reeled in $30 million on July 21 as it continued to make its mark as a leader in its niche. With 3,000 customers and more than 15 million users, the Portland, Ore., startup uses‚ social networking within your company, community tools for interacting with your customers, and monitoring features to track what people are saying on sites like Twitter.‚ The investment was led by Kleiner Perkins Caulfield &' Byers, with continued participation from Sequoia Capital, the only venture investor in Jive up then. The news made headlines at the time for another reason: the last time Kleiner and Sequoia teamed up on a deal of this size (larger than $30 million) was more than a decade ago, when they invested in Google, a bet which has more than paid off.
Blogging platform Tumblr showed that people are still interested in long-format ruminations (or at least those bigger than Twitter&'s 140 characters) by snagging $30 million on Dec. 12 after opening a new office in New York City and expanding its staff to 16 people. Tumblr, a social media network made up of millions of personal and business blogs, is seeing massive traffic growth, with activity on the network of Tumblr blogs skyrocketing over the first half of the year to reach around 2 billion pageviews this fall. Investors were clearly paying attention &8212' this round was led by Spark Capital, Sequoia Capital and Union Square Ventures, all well-known Silicon Valley star watchers.
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Companies: Aeris Capital, Boston Power, BT, Canaan Partners, Charles River Ventures, CrossLink Capital, DFJ Growth, Draper Fisher Jurvetson Growth Fund, Electronic Arts Ubisoft, Emergence Capital, European Founders Fund, Foundation Asset Management, Founders Fund, Gabriel Venture Partners, Gaikai, GameStreamer, Groupon, InstantAction, Keating Capital, Kleiner Perkins Caufield &' Byers, Lionhart, Livescribe, Masthead Venture Partners, Meritech Capital Partners, Oak INvestment Partners, OnLive, Otoy, Presidio Ventures, Qualcomm, SAP Ventures, Scale Venture Partners, Sequoia Capital, Softbank, Spark Capital, Take Two Interactive, Thq, Translink Capital, Tremor Media, Triangle Peak Partners, Tumblr, Twitter, U.s. Venture Partners, Union Square Ventures, ustream, VantagePoint Venture Partners, Venrock Associates, Yammer, Zynga
Companies: Aeris Capital, Boston Power, BT, Canaan Partners, Charles River Ventures, CrossLink Capital, DFJ Growth, Draper Fisher Jurvetson Growth Fund, Electronic Arts Ubisoft, Emergence Capital, European Founders Fund, Foundation Asset Management, Founders Fund, Gabriel Venture Partners, Gaikai, GameStreamer, Groupon, InstantAction, Keating Capital, Kleiner Perkins Caufield &' Byers, Lionhart, Livescribe, Masthead Venture Partners, Meritech Capital Partners, Oak INvestment Partners, OnLive, Otoy, Presidio Ventures, Qualcomm, SAP Ventures, Scale Venture Partners, Sequoia Capital, Softbank, Spark Capital, Take Two Interactive, Thq, Translink Capital, Tremor Media, Triangle Peak Partners, Tumblr, Twitter, U.s. Venture Partners, Union Square Ventures, ustream, VantagePoint Venture Partners, Venrock Associates, Yammer, Zynga
Riley McDermid is a contributing reporter to VentureBeat. She was previously the online editor at institutional investing and trading forum Markets Media, which she joined in 2008 from Dow Jones/MarketWatch in New York. Her work has appeared in the The New York Times, the Associated Press, Portfolio Magazine, The Wall Street Journal, and Barrona4‚¬a4„s. She has won awards from the American Society of Business Publishers and Editors, the Magazine Association of the Southeast, the Mississippi Press Association and the Atlanta Press Club, and was a finalist for the Pacemaker Prize for excellence in news reporting.
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