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General Commentary
Feb. 21, 2016

Trailblazing the Global Silicon Valley

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Market Snapshot

Indices Week YTD
GSV 300 2.4% 21.0%
S&P 500 1.5% 6.5%
Dow 1.9% 6.0%
NASDAQ 2.3% 12.3%
Russell 2000 1.5% 3.2%
MSCI 2.0% 14.4%
Valuations P/E Fwd P/E/G
GSV 300 26.9x 0.9x
S&P 500 18.2x 3.3x
I-Rates Now YTD
10-Year Note 2.29% -6.50%
3-Month Bill 0.80% 56.90%
Sentiment - Current
Bull-Bear - 38-31.7
Put-Call - 0.96
Vix - 10.82
Inflation Now YTD
Gold $1 10.20%
Oil $49.19 -8.60%
Mutual Funds - Week
Fund Flows (bil) - $7.20
Growth-Value 00-09 09-Now
Growth -34% 217%
Value 87% 141%

Welcome to GSV and the historic Pioneer Hotel building.

GSV stands for “Global Silicon Valley” and reflects the entrepreneurial mindset that has long been part of the fabric of the West and has now spread globally.

When first built in 1882, the Pioneer Saloon welcomed travelers on the popular Whiskey Hill stagecoach route.

Today, GSV is proud to welcome you to the Pioneer. Our mission is to redefine growth investing by investing in tomorrow’s stars. Today.

— Sign at THE ENTRANCE OF GSV’s headquarters

The Pioneers get all the arrows… but the ones that survive get all the land!

The businesses that generate the most spectacular returns are small companies that become big companies. At GSV, our objective is to identify and invest in the Stars of Tomorrow — the fastest growing, most innovative companies in the world.

As such, we have identified 250 private companies that are poised to become the next generation of game-changing businesses. We call this group the Global Silicon Valley Pioneer 250.

One of the characteristics of great companies is that they are systematic and strategic in how they operate their business. Similarly, if you want to be a great investor, you need to be systematic and strategic in how you analyze companies. GSV’s research process is structured to accomplish the identification of large, open-ended growth opportunities as well as individual companies that possess the critical elements necessary to capture meaningful market share in these opportunities.

Our top-down perspective focuses on Megatrends, or the technological, economic, and social forces that develop from a groundswell, move into the mainstream, and disrupt the status quo. We believe that understanding today’s Megatrends provides us with a road map to where future market opportunities are developing.

GSV’s bottom-up analysis is centered on the “Four Ps” — People, Product, Potential, and Predictability — an objective framework to assess a company’s potential to realize sustained long-term growth resulting from market Megatrends.

BASIC CRITERIA FOR PIONEER 250

Pioneer 250 Snapshot

Silicon Valley has become synonymous with big ideas, start-ups, and inventing the future. But today, the magic of Silicon Valley has gone viral, and it’s gone global. From Austin to Boston, Chicago to Sao Paulo, from Shanghai, to Mumbai to Dubai, a Global Silicon Valley is emerging. Today, most of the Pioneer 250 is clustered in the Bay Area, but we expect to find much broader geographic dispersion in the coming years.

PIONEER 250 GEOGRAPHIC DISTRIBUTION

Source: GSV Asset Management
*China (5), India (2), SE Asia (3)

It is our belief, based on our research and experience, that a disproportionate number of the big winners are found by focusing on themes where significant change and growth are taking place. Megatrends are powerful technological, economic and social forces that provide a tailwind at the back of growth sectors. The convergence of Megatrends and growth themes is how we develop investment themes.

GSV has identified five core investment themes that we believe are the most fertile for investments in companies with the greatest potential:

Cloud + Big Data: Every minute, over 200 million emails are sent, 2 million “likes” are registered on Facebook, and 300,000 tweets are released. Google alone conducts over 3.5 billion searches a day. “Infobesity” is an epidemic, with the amount of data captured and stored doubling every year. Powerful software analytics are creating massive opportunities for Big Data providers, with the industry expected to reach $55 billion by 2017, up from $20 billion today. The Hadoop market, which was approximately $5 billion in 2014, is predicted to rise 10x to $50 billion in 2020.

Marketplaces: eBay is the granddaddy of online Marketplaces and nearly 20 years old. What started as a way to impress an entrepreneur’s girlfriend and her love for Pez dispensers (and later fueled the Beanie Baby mania) has become the model for many great online businesses. The Internet is exceptionally suited to aggregate supply and demand within an industry, and smartphones amplify the tremendous network effects that can be created. The deeper the liquidity of the Market, the more equilibrium between supply and demand.

Sustainability: The good news is that the world’s middle class will more than double to five billion over the next 15 years. The bad news is that the strain this will put on the environment will be extreme, with wealthier people traveling more, consuming more, using more electricity for everything—from air conditioning to lighting larger homes. Sustainability is not just Green Technology: it is also Water and Wellness. There is no longer a debate between being “green” or “growing”—both are important. Water is even more precious, with California’s drought being a living example of how vital access to “blue gold” is for everything. Moore’s Law has taken effect with numerous sustainable technologies being able to compete on cost with dirty fossil fuels.

Social/Mobile: Over 87% of Millennials sleep with their smartphone and 80% say the first thing they do when they wake up in the morning is look at social media. If Facebook were a country, it would be largest in the World with over 1.5 billion “citizens”. Facebook-owned Instagram users upload 22 billion photos per year and WhatsApp processes a mind-bending 30 billion messages per day. We look at our phones an average of 110 times per day, and send over 550 million tweets per day. Social everything — communication, collaboration, photography, music, shopping, education and healthcare — is the future and it is going to be done anytime, anywhere on your mobile device.

Education Technology: In a Knowledge Economy and Global Marketplace, education makes the difference in terms of how well an individual does, how well a company does, and for that matter, how well a country does. The Internet democratizes education by lowering cost, increasing access, and now improving quality. Over the last 20 years the digital tracks have been laid, with over 3 billion people on the Internet today. We are starting to see what we call “Weapons of Mass Instruction”—rapidly scaling education companies attracting millions of students in a short period of time.

Pioneer 250 by GSV THEME

Source: GSV Asset Management

Pioneer 250 companies have been backed by a range of leading VCs, led by Andreessen Horowitz, which counts 50 companies on the list. KPCB (second place) and NEA (third place) have each backed at least 30 companies.

TOP VCs Backing Pioneer 250 Companies

Source: GSV Asset Management

Equity funding raised across the Pioneer 250 ranges from $5.5 million (Science Exchange) to $320 million (Affirm). Over 90% of companies on the list have raised less than $150 million and 43% have raised less than $50 million.

Pioneer 250 by Equity Funding Raised

Source: GSV Asset Management

Over 50% of the companies on the Pioneer 250 were founded between 2011 and 2015 (135). Just 16 companies were launched in 2014 and only two in 2015.

Pioneer 250 By Year Founded

Source: GSV Asset Management

There have been 10 “graduates” from the Pioneer 250 since it was initially published in 2015 — companies that were either acquired or surpassed $1 billion in market value.

PIONEER 250 GRADUATES
Companies Surpassing $1 Billion Market Value or Acquired since 2015 Publishing of Pioneer 250

Source: GSV Asset Management

PIONEER 250

  • 17zuoye (2007) is an online learning platform for students K-12, teachers, and parents to facilitate the educational experience. 17zuoye.com
  • 3D Robotics (2009) is an open-source UAV technology company manufacturing electronics and aerial vehicles. 3drobotics.com
  • Adatao (2012) is on a quest to deliver Data Intelligence for all. Adatao is offering a solution for data scientists and business users featuring a collaboration environment that lets them work together in one tool. adatao.com
  • Addepar (2009) connects financial data for wealth management firms in a single, cloud-based repository. addepar.com
  • Affirm (2014) is a financial technology services company, offers installment loans to consumers at the point of sale. affirm.com
  • Airware (2011) is building the aerial information platform for the rapid development and safe operation of commercial drones, providing hardware, software and cloud services. airware.com
  • Algal Scientific (2009) develops a wastewater treatment system that removes and recovers nutrients from wastewater using an algae-based process. algalscientific.com
  • AlienVault (2007) provides a platform with built-in security controls for organizations to address their compliance and threat management needs. alienvault.com
  • AltSchool (2013) is an interdisciplinary team of educators, technologists and entrepreneurs building a network of schools that prepare students for our changing world. altschool.com
  • Ambiq Micro (2010) is a semiconductor company that has developed breakthrough technology that dramatically reduces the amount of power consumed by ICs. ambiqmicro.com
  • Andela (2014) finds the brightest young people in Africa and gives them the training and mentorship needed to thrive as full-time, remote developers for companies around the world. andela.com
  • Anki (2010) is an entertainment robotics company dedicated to bringing AI and robotics to our everyday lives. anki.com
  • App Annie (2010) produces business intelligence tools and market reports for the apps and digital goods industry. appannie.com
  • Aquion Energy (2008) is creating safe, sustainable, and cost-effective batteries to reduce environmental costs. aquionenergy.com
  • Aspiration (2014) is an investment firm with a conscience built for the 21st century middle class. aspiration.com
  • Athos (2012) offers workout clothing fully integrated with wearable technology and capable of tracking heart rates, breathing levels, and more. liveathos.com
  • August (2012) builds products that allow physical environments to seamlessly respond to user behavior. The flagship product August Smart Lock is a new home access system that allows you to use smartphones in place of traditional keys. august.com
  • Automatic (2011) is a private company based in San Francisco that seeks to empower drivers with knowledge about themselves and their cars so they can be safer and drive smarter. automatic.com
  • Ayasdi (2008) provides big data analytics technology to organizations looking to analyze high-dimensional, high volume data sets. Ayasdi focuses on applying topology to data analysis in the areas of life sciences, oil & gas, public sector, financial services, manufacturing, retail, & telecom. ayasdi.com
  • Babylon Health (2013) delivers high quality healthcare via your mobile phone babylonhealth.com
  • Barkly (2013) is a new type of advanced security that actively protects users without slowing them down. By automatically recognizing modern attacks and stopping them before they can do more harm, companies are more prepared, more confident, and more productive with Barkly by their side. barklyprotects.com
  • Beepi (2013) connects car buyers and sellers in a new radical way – removing negotiations, trips to the dealer, surprise costs, and the middle-man. beepi.com
  • Betterment (2008) is a goal-based online investment company, delivering personalized financial advice paired with low fees and customer experience. betterment.com
  • BetterWorks (2013) is a platform driving operational excellence and providing powerful insights about how work gets done. betterworks.com
  • Bitglass (2013) is a cloud security gateway that helps enterprises move to SaaS-based and mobile deployments securely. bitglass.com

  • Blend Labs (2012) is a mortgage lending and analytics platform. blendlabs.com
  • Blockstream (2014) focuses on extending capabilities of Bitcoin through side chains, which are blockchains that are interoperable with each other and with Bitcoin, avoiding liquidity shortages, market fluctuations, fragmentation, security breaches and outright fraud associated with alternative crytpo-currencies. blockstream.com
  • Blue Danube Systems (2006) develops hardware and software solutions to increase average user data rates for wireless communication systems. bluedanube.com
  • Blue Jeans Network (2009) maintains a cloud-based video collaboration service that enables video conferencing using practically any device. bluejeans.com
  • Bolt Threads (2009) engineers the next generation of high-performance fashion fibers. boltthreads.com
  • Branch Metrics (2014) builds deep linking technology for mobile app developers to gain and retain users. branchmetrics
  • BrightBytes (2012) is a SaaS-based data analytics platform that measures and links the use of technology to learning outcomes. brightbytes.net
  • Bromium (2010) builds microvirtualization technology hardware that isolates threats on existing hardware and software platforms allowing organizations to eliminate compromises on the endpoint while delivering accurate and actionable threat intelligence. bromium.com
  • Canary (2012) is a New York-based company consumer building products that sense, organize, and curate meaningful information from the world. Canary blends deep learning technology with human-centered design to solve problems that all people share. canary.is
  • Capriza (2011) provides mobility solutions for enterprises, enabling developers to create apps for any internal web application or portal. capriza.com
  • CareCloud (2009) offers comprehensive functionality for appointment scheduling, medical billing, reporting and claims processing. carecloud.com
  • CipherCloud (2010) provides cloud information protection solutions for enterprise to encrypt sensitive information and store them in the cloud. ciphercloud.com
  • Circle (2013) is a consumer finance company focused on transforming the world economy with secure, simple, and less costly technology for storing and using money. circle.com
  • CircleUp (2011) is an online marketplace that links accredited investors with consumer product and retail companies. circleup.com
  • ClassPass (2013) is a membership program for fitness classes across multiple gyms and studios, making fitness more accessible. classpass.com
  • Clean Power Finance (2015) provides a full suite of financing products for the solar and energy efficiency markets. elevatepower.com
  • ClearStory Data’s (2011) platform modernizes data analysis by introducing a new user model for big data analysis, simplifying access to disparate data sources, automatically managing data harmonization, and enabling interactive analysis at scale. clearstorydata.com
  • Clever (2012) integrates student data with education apps, making technology easier to use in classrooms. clever.com
  • CloudGenix (2013) revolutionizes networking by transforming legacy WAN’s into a radically simplified, secure application-defined fabric, and virtualizing heterogeneous underlying transports into a hybrid WAN. cloudgenix.com
  • CohereTechnologies (2013) develops wireless technology to address the ongoing increase in wireless bandwidth demand. cohere-technologies.com
  • Coho Data (2011) is delivering storage for the cloud generation by developing the first flash-tuned scale-out architecture designed for private cloud that delivers unparalleled performance at public cloud capacity pricing. cohodata.com
  • Coinbase (2012) is a bitcoin wallet platform where merchants and consumers can transact with digital currency. coinbase.com
  • Collective Health (2013) is the world’s first cloud-based employer self-insurance platform collectivehealth.com
  • CommonBond (2011) is an online lending platform that connects borrowers and investors to make education finance better. commonbond.co
  • Compass (2012) is a tech-driven real estate brokerage firm that puts technology at the fingertips of its agents and clients to streamline and transform the process of finding a home. compass.com
  • Course Hero (2006) is a digital learning platform helping students learn and succeed with supplemental study materials, tutoring, and flashcards. coursehero.com
  • Coursera (2012) is an education company partnering with universities and organizations worldwide to offer massive open online courses. coursera.org
  • Curious (2012) is an information platform for anyone to learn, teach and share knowledge and information on any topic. curious.com
  • Cyanogen (2013) is an enhanced open source firmware distribution for smartphones and tablet computers based on the Android mobile OS, offering features and options not found in the official firmware distributed by vendors of these devices. cyngn.com
  • Datadog (2010) is a monitoring service that helps software developers and web operators understand and turn their IT data into actionable insight. datadog.com
  • Dataminr (2009) develops modular desktop and API products with a mission to extract value from social media for clients in the finance and government sectors. dataminr.com
  • DB Networks (2009) provide insights into your core network including database discovery, application mapping, and database intrusions. dbnetworks.com
  • Declara (2012) makes it easy to discover, collect, and share knowledge with a community of like-minded people. declara.com
  • DigitalOcean (2011) is simplifying the cloud by providing an infrastructure experience that developers love. digitalocean.com
  • Distil Networks (2011) is the global leader in Bot detection and mitigation focused on stopping automated attacks to make the web more secure. distilnetworks.com
  • DNAnexus (2009) accelerates the development and delivery of genomic medicine with a global network for sharing and managing genomic data and tools. dnanexus.com
  • DogVacay (2011) is an online community that connects pet parents with over 20,000 pet sitters across North America. dogvacay.com
  • Dollar Shave Club (2012) home-delivers personal grooming products to its online subscribers every month. dollarshaveclub.com
  • DoorDash (2013) enables delivery in areas where it was not previously available. doordash.com
  • DreamBox Learning (2004) offers elementary math education with a motivating learning environment and captures every decision a student makes while working within lessons and dynamically adapts and individualizes instruction in real time. dreambox.com
  • Duo Security (2010) provides cloud-based two-factor authentication to more than 4,000 organizations worldwide, protecting users, data, and applications from breaches, credential theft, and account takeover. duosecurity.com
  • Duolingo (2011) is a free online language learning service with more than 80 million students around the world, which makes us the biggest mobile language learning application in the world. duolingo.com
  • Dwolla (2008) is a free web-based software platform allowing users to send, receive, and request funds from another user. dwolla.com
  • Earnest (2013) is a merit-based lender using data science to create a different approach to personal lending and credit. meetearnest.com
  • eDaijia (2011) is a mobile platform for consumers to find temporary drivers. edaijia.cn
  • Eero (2014) is the world’s first WiFi system. eeros work together to form a mesh network that blankets your home in super-fast and reliable WiFi. eero.com
  • Ehang (2014) produces global leading unmanned aerial vehicle (UAV) technology company ehang.com
  • Elastic (2012) takes data from any source and search, and analyze and visualize it in real time. elastic.co
  • Endgame (2008) is delivering the next generation of Security Intelligence & Analytics (SIA). Endgame provides clarity to digital domain and supports data analysis driven by ease of use, scalability, speed, and effectiveness. endgame.com
  • Enjoy (2014) revolutionizes the way people buy and enjoy the world’s best technology by providing high-touch personal service to help people make the most of their important purchases. goenjoy.com
  • Estimote (2012) creates small, wireless sensors that use Bluetooth low energy (BLE) to detect the location of nearby smartphones and communicate with them using an API they’ve developed to make it easy for developers to add micro-location features to their mobile apps. estimote.com
  • Euclid Analytics (2010) is the world leader in location analytics euclidanalytics.com
  • Evertrue (2010) is a SaaS provider revolutionizing institutional advancement by combining CRM data with social data. evertrue.com
  • Figma (2012) is the first professional-grade, online tool created specifically for interface design. Built entirely in the browser, Figma enables the entire team’s design process to happen in one online tool. figma.com
  • Flatiron Health (2012) is a cloud-based technology platform dedicated to improving cancer care. flatiron.com
  • Flexport (2013) is a platform for global trade. The company makes it easy for businesses to move products by air, land, and sea around the world. flexport.com
  • Flipagram (2013) creates and share compelling visual stories with the music you love. flipagram.com
  • Flux Factory (2012) provides collaborative design software for the building design and construction industry. flux.io
  • Foursquare (2009) is a geo-technology platform that helps people explore the world with Foursquare/Swarm and powers Pinpoint’s ad tech solutions. foursquare.com
  • FreedomPOP (2011) is a wireless internet provider delivering 4G mobile broadband internet access. freedompop.com
  • Freshdesk (2010) is a cloud-based customer support software that enables companies of all sizes to support customers through email, phone calls, and social media. freshdesk.com
  • Fundbox (2012) helps small business find access to easy capital. fundbox.com
  • General Assembly (2011) is creating a global community of individuals empowered to pursue work they love by offering courses on the most relevant courses of the 21st century. generalassemb.ly
  • General Fusion (2002) develops utility-scale fusion power using magnetized target fusion. generalfusion.com
  • Genius (2009) is an online knowledge project that breaks down information with line-by-line annotations, added and edited by anyone in the world – a crowdsourced archive and tool for interpreting human culture. genius.com
  • Ginkgo Bioworks (2008) built the world’s first organism engineering foundry and has an outstanding team using the foundry to bring new organisms to customers. ginkgobioworks.com
  • Glow (2013) is a data science company on a mission to revolutionize women’s reproductive health care. Its products assist women in many phases of their reproductive journeys: avoiding pregnancy, conceiving, pregnancy, and postpartum. glowing.com
  • Go-Jek (2011) is the fastest courier, transport, and shopping service in Jakarta. go-jek.com
  • Greenhouse is a recruiting optimization platform to help companies build and scale their recruiting processes. greenhouse.io
  • Grofers (2013) is an on-demand delivery service that connects consumers with local merchants. grofers.com
  • Guardant Health (2013) is committed to positively and significantly impacting patient health through technology breakthroughs in oncology. guardanthealth.com
  • HackerOne (2012) offers a platform that promotes a positive disclosure experience in pursuit of its mission of securing all things, with Hacks and Companies working together for the benefit of all. hackerone.com
  • Handy (2012) is an app through which users can book cleaners, plumbers, handymen, and other household service providers. handy.com
  • Harry’s (2011) allows users to buy razors, German engineered blades and shaving creams at a fair price. harrys.com
  • Hearsay Social (2009) helps financial services teams efficiently and successfully use social media to attract prospects, retain customers, and grow business. hearsaysocial.com
  • Hedvig (2012) is re-architecting software-defined storage with true distributed systems DNA and collapses disparate storage systems into a single platform, creating a virtualized storage pool that provisions storage with a few clicks, scales to petabytes, and runs seamlessly in both private and public clouds. hedviginc.com
  • Helium (2013) provides the connective tissue between devices without relying on WiFI, Bluetooth, or cellular networks by combining low-powered wireless connectivity and a smart distribution network of data coming from those devices. helium.com
  • Hello Alfred (2013) pairs busy individuals with organized, knowledgeable, intuitive people who handle all of life’s necessities. helloalfred.com
  • Highfive (2012) is video and web conferencing you can simply implement for every meeting room & device. highfive.com
  • Hipmunk (2010) is an online travel company providing users with hotel deals and flights results via a website and an app. hipmunk.com
  • Hired (2012) is a two-sided marketplace that matches technology talent with the right job opportunities. hired.com
  • HotelTonight (2010) is a mobile booking application that allows users to find and reserve same-day hotel reservations from their smartphones. hoteltonight.com
  • Hyperloop Technologies (2014) is developing the technology and hardware to make high-speed transportation possible, incorporating reduced-pressure tubes in which pressurized capsules ride on an air cushion driven by linear induction motors and air compressors. hyperlooptech.com
  • IFTTT (2010) allows users to create recipes to connect their applications and devices to perform automated tasks. ifttt.com
  • Impossible Foods (2011) is developing a new generation of meats and cheeses made entirely from plants. impossiblefoods.com
  • Improbable (2012) is developing an operating environment that makes building simulated worlds possible. improbable.io
  • Infer (2010) provides a predictive SaaS platform that helps businesses win more customers. infer.com
  • Instart Logic (2010) accelerates cloud application delivery for the world’s most performance-obsessed organizations. instartlogic.com
  • Ionic Security (2011) provides access control, intellectual property monitoring, data encryption, and policy management. ionicsecurity.com
  • Iora Health (2011) is building a new model of primary health care delivery from the ground up to ensure radically improved service, better health outcomes, and dramatically lower overall health care costs. iorahealth.com
  • iZettle (2010) is the number one mobile payments provider in Europe and Latin America, offers an easy way to take card payments using mini credit card readers that transform smartphones and tablets into cash registers. izettle.com
  • JAMF (2003) develops management solutions exclusively working on Mac and iOS devices. jamfsoftware.com
  • Jaunt (2013) develops a technology combining computational photography, statistical algorithms, parallel processing, hardware, and virtual reality. jauntvr.com
  • Jelli (2008) is the first cloud-based programmatic ad platform for the $40 billion global radio market. Jelli is the first cloud-based programmatic ad platform that enables the global radio market to buy and run ads. jelli.com
  • JIBO (2012) is the World’s first social robot for the home. myjibo.com
  • Kensho (2013) combines natural language search, graphical user interfaces, and secure cloud computing to create a new class of analytics tools for financial markets. kensho.com
  • Keybase (2014) allows users to easily encrypt, decrypt and share messages within a tried-and-tested encryption standard. keybase.io
  • Knewton (2008) is an adaptive learning technology provider that makes it possible for anyone to build applications that provide real-time proficiency estimation, activity recommendations, analytics, and more. knewton.com
  • Kymeta (2012) is developing antennas for next generation satellite communications for mobile and fixed applications. kymetacorp.com
  • Lehigh Technologies (2003) transforms end-of-life tires and other post-industrial rubber into high-performance, low cost, sustainable micronized rubber powders that replace oil-and rubber-based feedstocks in a wide range of industrial and consumer applications. lehightechnologies.com
  • Life360 (2008) keeps millions of families connected no matter what chaos life throws in their way through part location and part communication – see where you parked your car, view live video from your webcams, and unlock doors all within the app. life360.com
  • LIFX (2012) produces energy-efficient, multi-color, Wi-Fi enabled LED bulbs that can be controlled via any Wi-Fi equipped device such as a smartphone or smart watch. lifx.com
  • Lightsail Energy (2011) is developing energy storage systems that use compressed air as the storage medium. lightsail.com
  • Lily (2013) started in September 2013 in the basement of a UC Berkeley robotics lab, where Henry and Antoine built the first prototype using a Raspberry Pi and an Arduino. lily.camera
  • Liquidity Nanotech (2009) manufactures breakthrough water purification cartridges, based on revolutionary membrane nanoscience. liquico.com
  • littleBits Electronics (2011) is an open source library of over 60 electronic modules that snap together with magnets to allow users to view, download, and share designs and make their own Bits through the use of prototypes. littleBits.cc
  • Livongo Health (2014) is reinventing the way we manage chronic conditions by blending the power of technology, real-time information and human support to make life easier for people with chronic conditions. livongo.com
  • Lomark (2010) provides mobile advertising solutions, working from a network of offices in 45 cities nationwide. lomark.cn
  • Looker (2011) is a software company employing business intelligence to make data accessible to organizations and data analysts. looker.com
  • Luxe (2013) is a new service that sends valets to park for you, wherever you are – it’s fast, stress-free and reliable. luxe.com
  • Lytro (2006) develops light field enabled hardware and software to unlock new applications for photography, video, 3D, virtual reality and additional areas lytro.com
  • Malwarebytes (2008) develops anti-malware technologies to detect and remove malicious programs from PCs. malwarebytes.org
  • Mantis Vision (2005) develops technologies products and experiences that will bring 3D to every mobile device, home and business. mv4d.com
  • Matterport (2010) is an end-to-end virtual media solution. Our users capture, edit, and share interactive 3D models of real spaces with ease. matterport.com
  • mCube (2009) is the provider of the world’s smallest MEMS motion sensors, key enablers for the new Internet of Moving Things. mcubemems.com
  • Medium (2011) is a platform for people to share their ideas and stories with the right audiences. medium.com
  • Mesosphere (2013) is building a new kind of operation system that spans all of the servers in a physical or cloud-based datacenter, and runs on top of any Linux distribution. mesophere.com
  • MetaMind (2014) develops state-of-the-art AI solutions for enterprises powered by Deep Learning, and provides tools accessible for everyone. metamind.io
  • Meteor (2012) is an open-source platform for developing web applications. meteor.com
  • Minerva Project (2011) is designed to prepare students for leadership and innovation, combining liberal arts and sciences curriculum. minervaproject.com
  • Mixpanel (2009) is an advanced analytics platform to help companies dive deep into product usage, conversion rates, and user retention. mixpanel.com
  • Modern Meadow (2011) is developing new ways to grow animal products. modernmeadow.com
  • Motif Investing (2010) is a portfolio of up to 30 stocks that reflect real-world trends and investments. motifinvesting.com
  • Munchery (2011) has in-house chefs create dishes that get delivered right to your door, ready to heat when you want to eat. munchery.com
  • Nantero (2000) uses carbon nanotubes to develop semiconductor devices, including memory, logic, and other semiconductor products.The company’s objective is to deliver a product that will replace all existing forms of memory, such as DRAM, SRAM and flash memory. nantero.com
  • Narrative Science (2010) is the leader in advanced natural language generation, we tell the stories hidden in your data. With Quill™, all you have to do is read. narrativescience.com
  • Navdy (2013) is the world’s first Head-Up Display (HUD) made for any car & all the apps you love. navdy.com
  • NerdWallet (2009) provides financial education and empowerment via online tools, research and experts to help people lead better lives. nerdwallet.com
  • Ninebot (2012) is a Chinese-based robotics engineering company specialized in autopilot and personal transportation. ninebot.com
  • NuBank (2013) is leading digital finance company in Brazil that helps customers with financial spending, planning and record-keeping. nubank.com.br
  • Numenta (2005) is laying the groundwork for the new era of machine intelligence by developing software based on principles of the neocortex. numenta.com
  • Ogin (2007) develops shrouded wind turbines using a novel aerodynamic technology known as a mixer/ejector. oginenergy.com
  • One Medical Group (2007) is committed to making health care personal, accessible, and affordable. onemedical.com
  • OneFineStay (2009) offers upscale city accommodation for visitors while the homeowner is out of town, allowing homeowners to earn an extra income. onefinestay.com
  • Onshape (2012) is a new venture-backed company that is applying cloud, web and mobile technologies to CAD. onshape.com
  • Opendoor (2014) is an online home-selling service aimed at streamlining the sales process down to a few days. opendoor.com
  • OpenEnglish (2006) is focused on English language learning for the Latin American & US Hispanic markets. openenglish.com
  • OpenGov (2012) provides cloud-based financial data visualization and analysis software for local governments. opengov.com
  • Optimizely (2010) is a experience optimization platform enabling A/B and multivariate testing for users to enhance their websites & mobile apps. optimizely.com
  • OYO Rooms (2013) is India’s largest network of hotels offering standardized stay experiences at an unmatched price and driven through technology. oyorooms.com
  • Ozy Media (2012) is an international online magazine that focuses on news, arts, and culture. OZY focuses on the “change generation” by delivering content that focuses on what is new and next which is delivered to a global audience. ozy.com
  • PayNearMe (2009) enables consumers to pay with cash for rent, utilities, online purchases and more, at 17,000 retail store locations. paynearme.com
  • Pebble (2009) is a company that develops a technology designed for smart watches to connect with iPhone and Android smartphones using Bluetooth. getpebble.com
  • peerTransfer (2009) offers an international student payment solution that enables payments in home currencies. peerTransfer.com
  • PernixData (2012) offers software that virtualizes server-side flash to enable scale-out storage performance. pernixdata.com
  • Personal Capital (2009) is the leading digital wealth management firm. personalcapital.com
  • PillPack (2013) is an online pharmacy offering a modern technology-based system that helps people take timely medication. pillpack.com
  • Pindrop Security (2011) provides anti-fraud authentication technology solutions for financial institutions’ call centers. pindropsecurity.com
  • PlaceIQ (2010) provides location intelligence services that enable advertisers to reach mobile brand audiences for marketing activities. placeiq.com
  • PlanetLabs (2010) uses satellites to image the entire Earth, every day, and then make this data accessible through web tools. planet.com
  • PlanGrid (2012) is a cloud-based app that allows users to store blueprints and construction documents on iPad and iPhone. plangrid.com
  • Platfora’s (2011) Big Data Analytics Platform makes the complexity of Hadoop, making it easy for customers to understand all the facts in their business across events, actions, behaviors and time. platfora.com
  • PolicyGenius (2014) was founded in 2014 by two former McKinsey consultants who saw a gap in the insurance industry and dedicated themselves to shifting the industry online and into the hands of the consumer. policygenius.com
  • Postmates (2012) is an urban logistics and delivery platform that allows users to ship any item within the city for same-day delivery. postmates.com
  • Practice Fusion (2005) provides a free, web-based Electronic Health Record (EMR) system and medical practice management technology to physicians. practicefusion.com
  • Procore Technologies (2002) is a cloud-based construction management software application built for the construction industry professional, striving to make project management effortless, one task at a time. With Procore’s easy-to-use and collaborative software, users can manage their projects at anytime, from anywhere, with any Internet-connected device. procore.com
  • Project Frog (2006) develops component buildings that assemble easily onsite, giving architects and builders a fast and cost-effective way to create beautiful and energy-efficient buildings. projectfrog.com
  • Quantopian (2011) is an algorithmic trading platform providing users with tools to learn, create, and trade their algorithmic strategies. quantopian.com
  • Quip (2012) is a word processor enabling users to create documents on devices such as phones, tablets and desktops. quip.com
  • Qumulo (2012) is a startup company developing simple, scalable, and efficient enterprise data storage systems. qumulo.com
  • Raise Marketplace (2010) is a P2P gift card marketplace to buy and sell gift cards. raise.com
  • Ravello Systems (2011) is a cloud service powered by nested virtualization. Enterprises run VMware or KVM workloads on AWS or Google without modifications. ravellosystems.com
  • Realm (2011) is a mobile database that enables its users to develop applications faster and craft amazing user experiences. It can save users thousands of lines of code & weeks of work, and lets them craft amazing new user experiences. realm.io
  • Redfin (2004) provides a real estate search and brokerage services through a combination of real estate web platforms and access to live agents. redfin.com
  • Redmart (2011) is a Singapore-based online supermarket that home-delivers groceries and essentials. redmart.com
  • Remind (2011) is a web and mobile application that enables teachers to text message students and stay in touch with parents. remind.com
  • Revinate (2009) is an enterprise-grade, cloud-based SaaS platform sold on a monthly subscription basis to hospitality companies. revinate.com
  • Robinhood (2013) is a commission-free, mobile-first stock brokerage. robinhood.com
  • Samsara (2015) disrupts the traditional sensor model with an integrated, software-centric solution. Its products combine plug-and-play sensors, wireless connectivity, and rich cloud-hosted software, all tightly-integrated for simple deployment. samsara.com
  • Science Exchange (2011) is a marketplace for scientific collaboration, where researchers can order experiments from the world’s best labs. scienceexchange.com
  • Scribd (2007) is a digital library, featuring e-book subscription services on iPhone, iPad, Kindle Fire and Nook Tablet. scribd.com
  • Seeo (2007) provides rechargeable lithium-ion batteries based on a nano-structured polymer electrolyte. seeo.com
  • Segment (2012) is a single hub for customer data. Collect your customer data in one place, send it anywhere. segment.com
  • SendGrid (2009) is a proven cloud-based email delivery platform that successfully delivers over 18B customer engagement emails each month. sendgrid.com
  • Shape Security (2011) stops automated web and mobile application attacks, like credential stuffing, content scraping, and application-­layer DDoS, that bypass existing defenses shapesecurity.com
  • Shapeways (2007) is the world’s leading 3D printing service, marketplace and community enabling anyone to bring amazing products to life. shapeways.com
  • Shift (2013) is people-powered marketplace for buying and selling cars. shift.com
  • Shyp (2013) comes to your house, picks up items and takes them away to be professionally packaged and shipped to their destination. shyp.com
  • SignalFX (2013) is an advanced monitoring platform for modern applications and enables customers to create custom analytics pipelines on metrics data collected from thousands or more sources to create meaningful aggregations within seconds of receiving data. signalfx.com
  • SKULLY (2013) has carefully optimized helmets for motorcyclists that delivers an unparalleled riding experience. skully.com
  • Skycatch (2013) allows you to deploy flying autonomous drones with real-time HD imagery and video from the sky. skycatch.com
  • Skyhigh Networks (2011) enables organizations to adopt cloud services with appropriate security, compliance, and governance. skyhighnetworks.com
  • SmartDrive Systems (2004) gives fleets and drivers driving performance insight and analysis, helping save fuel, expenses and lives. smartdrive.net
  • SnapLogic (2006) is an integration platform allowing companies to connect any number of applications in the cloud and on-premise. snaplogic.com
  • Snowflake Computing (2012) is delivering a data warehouse designed from the ground up for the cloud and for today’s data needs. snowflake.net
  • Solexel (2005) develops high-efficiency, low-cost, crystalline silicon solar cells and modules for photovoltaic (PV) electricity generation. solexel.com
  • Soylent Corporation (2013) is a food supplement that can be personalized for different body types and customized based on the individual’s taste. soylent.com
  • Spiceworks (2006) is the professional network for the IT industry. spiceworks.com
  • Spire (2012) is a satellite-powered data company that offers data innovation, technology, and applications. spire.com
  • Squarespace (2004) is a SaaS-based Content Management System (CMS) offering a website builder, blogging platform and hosting service. squarespace.com
  • Stack Exchange (2008) provides an online network of community-driven question and answer sites primarily for programmers and software developers. stackexchange.com
  • Stitch Fix (2011) is a personal styling platform that delivers curated and personalized apparel and accessory items of perfect fit for women. stitchfix.com
  • Sumo Logic (2010) is a cloud-based log management and analytic service that leverages machine-generated big data to deliver real-time IT inisghts. sumologic.com
  • Switch Communications (2011) is a cloud-based phone system built for Google Apps users. switch.co
  • Synack (2013) is a human-powered security solution offering scalable continuous testing for enterprise applications and networks. synack.com
  • Taboola (2007) serves over 300 billion 750 million unique visitors every month and connects people with content they may like. taboola.com
  • Takealot Online (2010) strives to be the largest, simplest, most customer centric online shopping destination in Africa. takealot.com
  • Talend (2005) is an open source software vendor that provides data integration, data management, enterprise application integration and big data software and services. talend.com
  • Talkdesk (2011) is an easy-to-use, cloud-based call center software solution that helps growing businesses improve customer interactions, while simultaneously reducing costs. Unlike other call center solutions, Talkdesk requires no phones, hardware, coding or downloads – all that is needed is a computer and an Internet connection. talkdesk.com
  • Tamr (2012) makes data source connectivity and enrichment fast, cost-effective, scalable and accessible to the entire enterprise. tamr.com
  • Tealium (2008) is a provider of a tag management system, including analytics, advertising and affiliate enterprise websites. tealium.com
  • Teespring (2011) is a commerce platform that empowers anyone to design and sell products that people love. teespring.com
  • Thync (2011) creates wearable technology that uses neurosignaling to shift your state of mind, inducing on-demand shifts such as energy, calm or focus. thync.com
  • Tilt (2012) is a next-generation crowdfunding platform, Tilt is the easiest way to collect, fundraise, or pool money securely and effectively online. tilt.com
  • Toast (2011) is a tablet point-of-sale app for restaurants, cafes, bars, clubs, and other businesses in the food service and hospitality space. pos.toasttab.com
  • Tokopedia (2009) is one of Indonesia’s biggest online marketplace that provides customer to customer retail, enabling individuals and business owners to open and maintain their online stores for free. tokopedia.com
  • Tradesy (2012) is an e-commerce platform that trades used clothing, shoes, bags, and accessories. tradesy.com
  • True North Therapeutics (2013) is a pioneering biotechnology company selectively inhibiting the Complement pathway for diseases. truenorthrx.com
  • Truecaller (2009) is a mobile app that let’s you see who’s calling and block unwanted calls. truecaller.com
  • uBeam (2011) is a wireless power startup that transmits power over-the-air to charge electronic devices. ubeam.com
  • Upstart (2012) is an online lending platform that uses data to bring together high potential borrowers and investors. upstart.com
  • Upwork (2005) is the world’s largest freelance talent marketplace, connecting businesses with great talent faster than ever. upwork.com
  • Uxin (2011) is a professional online transaction service provider for used cars. xin.com
  • VeloCloud (2012) is a cloud networking services company, simplifies branch WAN networking. velocloud.com
  • Vessel (2013) is a video service that gives YouTubers a more attractive platform to showcase their work on. vessel.com
  • Vicarious (2010) is building a unified algorithmic architecture to achieve human-level intelligence in vision, language, and motor control. vicarious.com
  • VMTurbo (2008) is an intelligent workload management solution providing virtualization management software and data center control. vmturbo.com
  • Walker & Company Brands (2013) makes health and beauty simple for people of color walkerandcompany.com
  • Wealthfront (2011) is the largest and fastest growing automated investment service, with over $2 billion in assets under management. wealthfront.com
  • Welltok’s (2009) CaféWell Health Optimization Platform provides consumers with personalized guidance and incentives to optimize their health. welltok.com
  • WeTransfer (2009) is a cloud-based file transfer service designed to transmit small to large files. wetransfer.com
  • x.ai (2014) builds and maintains an artificial intelligence powered personal assistant that schedules meetings for the business customers x.ai
  • Xapo (2012) combines the convenience of an everyday bitcoin wallet with the security of a deep cold storage vault. xapo.com
  • Zerto (2009) provides enterprise-class business continuity and disaster recovery (BCDR) solutions for virtualized infrastructure and cloud. zerto.com
  • Zuora (2007) provides subscription billing as well as recurring revenue, payments, and billing solutions. zuora.com

A hugely oversold Market rebounded last week with the NASDAQ, S&P 500, and GSV 300 advancing, 3.8%, 2.8% and 5.8% respectively. The 10-Year Note yield remained almost flat at 1.74%.

World Indices

Source: Yahoo Finance, GSViQ

The Fed, fearing a greater meltdown, decided to leave rates where they are given the negative Market action and plummeting oil prices. Clearly, business leaders and investors are scared, so trying to calm nerves took precedence over longer term economic realities.

More and more, government action seems to be a heavy hand that’s influencing both business and Markets. The Mexican standoff between the FBI and Apple over allowing the government access to private records of the San Bernardino terrorist forced a judge to weigh in, telling Apple to give up the ghost. The FCC voted 3-2 to make it easier to switch from set-top boxes to devices sold by companies like Alphabet (Google), Apple and TiVo. (Disclosure: GSV owns shares in Apple and Alphabet)

Our Market view is to block out the noise created by the daily mood of stocks and focus on identifying and investing in the strongest growth companies in the World. What do we like?  Alphabet, Facebook, Amazon, VipShop, and TAL Education to name a few.  Twitter and Chegg both provide tremendous risk reward opportunities in our view. (Disclosure: GSV owns shares in Alphabet, Facebook, Amazon, VipShop, TAL Education, Twitter, and Chegg)

Bubblin'

by Luben Pampoulov

Big On Yello(w)

As a tea lover, I was lucky to meet with the owner of TWG Tea, one of the World’s premium tea brands based in Singapore. TWG has 52 outlets typically located in high-end locations in major cities, and it operates several restaurant gardens in select places. Looking at its website, I was amazed by the huge selection of teas. Even more amazingly, I learned that the most rare tea, the Yellow tea, has an annual supply of only 20kg globally, and the cost of a single tea cup is well over $100.

What makes Yellow tea so unique and special is it does not go bitter, even after being in the water for over 30 minutes. It’s the purest, highest quality of all teas, and the true unicorn of teas!

TWG Tea Outlet

Another emerging premium brand is Yello Mobile. Operating in South Korea, Yello is a mobile app platform focused on five different categories: shopping, media, advertising, travel and offline-to-online business (SMATO). It is Korea’s largest mobile platform with over 25 million monthly service users, valued at $4 billion…and is just over three years old. During the third quarter of 2015, Yello’s ~$80 million of revenue grew an impressive 274% YoY, and it reported a positive EBITDA margin of 3%. This is a rare profile for a tech unicorn, as most companies with such growth profile are losing significant amount of money.

The impressive growth has been fueled by a series of acquisitions — Yello’s entire network consists of 80 different companies offering over 40 different services. One could think of Yello as a combination of Amazon, Facebook, Lyft, Lending Club and Priceline…talk about a Monopoly.

One of its earliest investors was Formation 8, and late last year, Yello Mobile raised $43 million in a strategic partnership from SBI Holdings, Japan’s a largest internet financial group. The investment was made into Yello Financial Group, one of Yello’s subsidiaries, that is focused on financial technology.

Yello’s Founder and CEO Lee Sang Hyuk

Pioneer Notes

by Li Jiang

How to Make Bad Investments

If you have read the classic The Innovator’s Dilemma, you will realize that the reason why established companies can’t innovate quickly isn’t because they are stupid or blind, but because they are efficient and optimized to make their current business more profitable.

Clay Christensen studied companies that were well run and found that they miss great innovations because those areas are initially too small to impact their core business. Paradoxically, the best run companies are often the most effective at building their core business and thus less flexible to pursue new areas of innovation.

Investing in startups has a similarly paradoxical nature. No one wants to make bad investments, but optimizing for the characteristics that make most established companies work well is exactly the wrong way to invest in startups.

Here are a few pairs of myths and realities of investing in startups.

1. Let’s talk about the team. Everyone wants a great team.

Myth: look for a team who has great experience and has “done it before”.
Reality: look for a team who is able to learn and grow the fastest.

In well established companies and industries, leaders need to have significant prior experience to work with a more experienced team. They benefit from industry relationships built up over the years. But in a startup, the crucial factor is speed. No matter how much experience someone has, doing something new will create new problems that requires rapid responses. Speed and experience are not mutually exclusive, but sometimes having experience creates a sense of “we already know how to do this”. In reality, there will always be many unforeseen challenges so look for the team that is willing to experiment and learn the fastest.

2. People all want to invest in a killer new product or service.

Myth: look for products with better and more features.
Reality: look for products that are different and are hacked together quickly but gaining traction with a small core group of “addicts”.

Rarely does a better product win over the incumbent choice. Usually the product has to be meaningfully different than existing solutions. Big companies can compete with a slightly better products with massive marketing — why do you think you see so many car, fast food, and financial services ads. Those are mature industries with incremental product improvements that rely on mass distribution. As a startup, you need to rely primarily on organic product growth by building something unique and loved by a core group of users. How do you build something different? Focus on a rapidly emerging market segment, which brings us to the next idea.

3. Everyone wants to invest in companies that operate and grow in a huge markets.

Myth: invest in gigantic markets.
Reality: invest in small markets that are growing dynamically — the Internet in 1990s.

Great startups can only be built in rapidly growing markets. In large, but stagnant markets, the major players are already competing and beating each other over market share. It would be the opposite of smart and strategic for a startup to jump in. In 1994, when Jeff Bezos founded Amazon, the Internet grew at a rate of 2,300% off of a meaningful base. Over the next two decades, not only did that growth allow for Amazon to blossom, but it created almost all of the most significant companies of this generation. The emergence of a new market create a vacuum of customer needs for a company to fill and is the white space that startups can work to fill.

4. We all want to invest in companies that have strong and predictably business models.

Myth: look for companies that have revenue and/or profit.
Reality: look for companies that are focused on building huge protective moats around technology and network but aren’t monetizing yet.

Ultimately companies need a healthy financial model but their long term success is determined by two forms of competitive advantage. One form is a technology advantage — a startup can win with the best technology that gets transformed into the best product. The other is a network advantage — a startup uses network effects to create a positive cycle where each new person that joins the network creates more value for everyone in that network (Facebook, Airbnb, Lyft). Sacrificing short term revenue and/or profit to build long term competitive moats can be taken to an extreme, but only focusing on financials without intently creating long term advantages is dangerous.

The Investor’s Dilemma

As with the innovator’s dilemma, there is also the investor’s dilemma of trying to check all the standard boxes for what makes for a great large corporation.

Paradoxically, those boxes are not the ones that make for the best startups to invest in. It requires discipline and contrarian thinking to get past the investor’s dilemma and find the most valuable growth companies of the future.

Market Update

Week ending Feb. 21, 2016

World Indices

America Index 5/29/2017 YTD Week
U.S. GSV 300 91.5 21.0% 2.4%
NYSE 11536.1 4.3% 1.3%
Dow 20940.5 6.0% 1.9%
NASDAQ 6047.6 12.3% 2.3%
NASDAQ-10 5583.5 14.8% 2.6%
Russell 2000 1400.4 3.2% 1.5%
S&P 500 2384.2 6.5% 1.5%
Brazil Bovespa 65403.3 8.6% 2.6%
Mexico IPC 49261.3 7.9% 0.6%
Canada S&P TSX 15586.1 2.0% (0.2%)
Euro-Asia Index 5/29/2017 YTD Week
China SSE 3154.7 1.6% (0.6%)
Heng Seng 24615.1 11.9% 2.4%
Singapore Straits Times 3175.4 10.2% 1.1%
Indonesia JKSE 5685.3 7.3% 0.4%
Japan Nikkei 225 19196.7 0.4% 3.1%
India Sensex 29918.4 12.4% 1.9%
Russia RTS 2016.7 (9.7%) 3.7%
France CAC 40 5267.3 8.3% 4.1%
Germany DAX 12438.0 8.3% 3.2%
U.K. FTSE 100 7203.9 0.9% 1.3%



U.S. Indices Snapshot

Valuation P/E Est. P/E/G Price/Sales
LTM NTM Growth LTM NTM LTM NTM
S&P 500 24.0x 18.2x 5.6% 4.3x 3.3x 2.5x 2.3x
NASDAQ 26.8x 19.1x 7.1% 3.8x 2.7x 2.5x 2.4x
Russell 2000 25.9x 19.2x 6.5% 4.0x 3.0x 1.8x 1.8x
GSV 300 54.5x 26.9x 31.3% 1.7x 0.9x 5.5x 4.0x

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