2014 by numbers: Start-up stats and multi-billion-dollar valuations

29 Dec 2014

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Image by Stepan Kapl/Shutterstock

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In our year-end series looking at the numbers that add up to 2014, we account for some of the year’s most eye-popping tech start-up valuations.

Overall, 2014 has been a great year for start-ups. Access to funding was made democratic through the spread of crowdfunding platforms such as Kickstarter, which surpassed US$1bn in total pledges in March.

Kickstarter’s success prompted a swell of strange projects – some more successful than others. More than US$55,000 was raised to make potato salad, while two friends hoping to crowdfund a weekend Guinness binge only managed to drum up US$19.

As Kickstarter spread its reach to makers and creators across Europe throughout 2014, Europe’s start-up scene had reached its highest level of VC funding since 2001. In the second quarter of 2014, companies across the continent received €2.1bn.

Amidst all this, Ireland was pulling its weight as a top location for start-up success. In June, the Global Entrepreneurship Monitor report ranked Ireland as the second-most entrepreneurial of the top 15 countries in Europe, with 1 in every 11 adults in the country engaged in some form of early stage entrepreneurial activity.

Some angel investors in Ireland reported a 700pc return on investment during the first quarter, according to the Halo Business Angel Partnership. Meanwhile, the Dublin-based NDRC (National Digital Research Centre) was the only Irish incubator listed in the top 25 of the UBI Index, where it was ranked among the top 2.5pc of incubators worldwide.

It may come as no surprise, then, that the number of start-up companies in Ireland reached its highest level since before the recession in 2007 with, on average, 49 new companies established every day in July, according to Vision-net.ie.

The rise and rise of Stripe

Speaking of Irish start-up success, Limerick’s own Collison brothers – Patrick and John – have seen their online payments company Stripe go from strength to strength this past year.

It started with Series C funding of US$80m in January, giving the San Francisco, California-based company a valuation of US$1.75bn. However, Stripe has neatly doubled that in the space of a year, closing out 2014 valued at US$3.5bn following a further US$70m investment round.

It may not be long before Stripe is among the multi-billion-dollar rankings of start-ups such as Pinterest – valued at US$5bn in May – and Jack Dorsey’s m-payments start-up Square, which reached a US$6bn valuation in October.

But in 2014, single-figure billions were no longer not quite enough to raise eyebrows to a hairline height as young companies began reaching valuations worth tens of billions.

Following a US$350m funding round in February, Dropbox reached the US$10bn club, followed by Elon Musk’s commercial space operation SpaceX and ephemeral messaging app Snapchat in August.

Airbnb had also joined the US$10bn start-up club in March, but it soon outgrew it with a US$13bn valuation in October.

But topping them all, the highest valued start-up of the year by an incredible distance, was driver-hiring app Uber.

In May, Uber gained US$500m investment, mooting a possible valuation of US$12bn. It was then reported that Fidelity Investments would lead an investment round valuing the company at US$17bn.

By December, Uber had raised US$1.2bn in fresh investment, sealing its top ranking as the most highly venture-backed start-up with an eye-watering valuation of US$40bn.

For some, these figures are encouraging and worth celebrating; for others, the spectre of a Nineties tech bubble still looms, and fears of a new bubble swelling to bursting point have emerged. Who knows what 2015 will bring?

Economic bubble image by Stepan Kapl via Shutterstock

Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com