Here are the 10 most valuable venture-backed startups in North Carolina in 2021
North Carolina startups have added billions of dollars in value during the pandemic.
The number of privately funded companies worth more than $1 billion in the state grew from from four to seven over the past year, according to an analysis by PitchBook.
The wave of valuation increases — including Cary-based Epic Games’ massive $29 billion valuation — is part of a national trend. With interest rates near zero, money has flooded into companies from venture capital and private equity firms looking to fund the next startup capable of going public or being acquired for hundreds of millions of dollars.
In the second quarter of this year, 136 startups across the world became “unicorns” — startups worth $1 billion or more — a record, according to CB Insights. Epic is the seventh most valuable unicorn in the world, according to CB Insights.
For the second year in a row, PitchBook, a venture capital research company, compiled a list of the most valuable North Carolina startups at The News & Observer’s request. The list was compiled by PitchBook as of Aug. 11.
PitchBook compared the post-valuation numbers of every startup in North Carolina that investors have put money into. The list only includes valuations PitchBook has confirmed, so if PitchBook didn’t have a valuation for a startup it wouldn’t make the list. The N&O has supplemented PitchBook’s data with information it has reported.
For a few examples on the list, the most recent valuation is still unknown by PitchBook.
1. Epic Games ($28.7 billion; 2020 rank: 1)
Epic Games continues to be the most influential startup in the state.
In the past two years, the Cary-based video game maker has raised billions of dollars from investors, bought an entire mall to turn into its headquarters and taken tech giants Apple and Google to court to prove they are violating antitrust laws.
The company’s heady new valuation made its founder and CEO, Tim Sweeney, the wealthiest individual in North Carolina. In April, Sweeney leapfrogged fellow Cary-based entrepreneur James H. Goodnight, the CEO of SAS Institute, according to Forbes magazine’s annual analysis of the world’s richest individuals. Sweeney is now worth a reported $7.4 billion, and has used a part of that wealth to conserve large swaths of land across the state.
A judgment in Epic’s much-watched lawsuit against Apple could come as early as this month.
2. insightsoftware ($4 billion; 2020 rank: not ranked)
Raleigh-based insightsoftware is a new entrant on the list of North Carolina’s most valuable startups.
insightsoftware was formed out of the 2018 combination of Raleigh-based Global Software and Hubble Software, which had been bought by TA Associates and ST6, a consulting firm.
In July, the company received a $1 billion investment from the private-equity firm Hg that valued the company at $4 billion, The N&O reported.
insightsoftware makes financial reporting and budgeting software, as well as other products targeted toward chief financial officers and accountants. Over the past three years, it has grown aggressively through acquisitions, buying 16 other software firms.
3. Pendo ($2.6 billion; 2020 rank: 3)
Raleigh software firm Pendo is now worth $2.6 billion, after raising $150 million from investors last month, The N&O reported.
Pendo, the maker of software that helps companies collect data on how customers actually use their products and websites, has now raised $356 million since it was founded at HQ Raleigh (now Raleigh Founded) in 2013. Its previous valuation was $1 billion, which came after it raised $100 million in 2019.
Company CEO Todd Olson told The N&O that last month’s fund raise could be its last before it goes public via an initial public offering. Pendo is targeting the later half of 2022 for a potential IPO, Olson said, adding it will likely depend on how the stock market is behaving next year.
“[W]e felt like now is a good time to kind of get this money in the bank,” Olson said. “That will free us up to be a little more aggressive and spend more aggressively and help get us to that IPO event.”
4. AvidXchange ($1.65 billion; 2020 rank: 2)
AvidXchange, a Charlotte-based financial technology company, could be the next North Carolina startup to go public.
The payments company has reportedly been preparing for an IPO that could value it at $7 billion, Reuters reported earlier this year.
Founded in 2000, AvidXchange has become one of the largest startups in the state thanks to its accounts payable automation software. The company is led by Michael Praeger, and its investors include Mastercard and PayPal cofounder Peter Thiel.
5. Humacyte ($1.1 billion; 2020 rank: 7)
Humacyte, a Durham-based biotechnology company trying to make universally implantable bioengineered human tissue, received a huge valuation boost earlier this year when it became the first North Carolina company acquired by a special acquisition company, or SPAC.
The deal with Alpha Healthcare Acquisition Corp. valued the company at $1.1 billion, The N&O reported.
Humacyte was founded in 2004 by a Duke University researcher, Laura Niklason, and two of her former Duke students, Juliana Blum and Shannon Dahl.
The company now has 130 employees. One of its most promising products, bioengineered blood vessels, could be used in patients with end-stage renal disease.
6. Printful ($1 billion; 2020 rank: not ranked)
Printful, an on-demand print and fulfillment company based in Charlotte, is another new entrant on the list.
The company received a $130 million investment from private-equity firm Bregal Sagemount earlier this year, which gave the previously self-funded company a valuation of around $1 billion, according to The Wall Street Journal.
Printful, originally founded in Latvia in 2013, allows customers to print custom designs on T-shirts, home decorations and other items.
The company brought in more than $200 million in revenue in 2020, The Wall Street Journal reported.
7. Tresata ($1 billion; 2020 rank: 4)
Charlotte analytical software maker Tresata is one of four Charlotte-area companies to reach a valuation of more than $1 billion. (Red Ventures is the other Charlotte unicorn, though it doesn’t make this list due to its Fort Mill, South Carolina, address).
Founded in 2011 by Abhishek Mehta, the company makes software that helps companies automate data analytics.
8. Prescient ($695 million; 2020 rank: 6)
Prescient, a startup that makes architectural software and has offices in Mebane and Charlotte, recently raised $190 million from investors, The N&O reported.
But following that fund raise, the company has declined to give out a new valuation, meaning its listed valuation from PitchBook is likely out of date.
Prescient makes technology that enables developers to build large parts of apartment buildings off site, allowing for quicker build times. It maintains a large manufacturing presence in Mebane, about 23 miles west of Durham in Alamance County.
The company was based in Colorado until 2017, when it relocated to North Carolina after receiving a $2 million incentive package from the state, The News & Observer previously reported.
Until 2019, the company’s executives were based in downtown Durham. However, that office was destroyed by a devastating gas explosion that decimated an entire city block. The company moved most of those employees to an existing office in Charlotte after the explosion.
9. HZO ($640 million; 2020 rank: 5)
HZO, a nanotech manufacturer, moved its headquarters from Utah to Morrisville in 2019, with plans to hire around 500 employees here in the coming years.
The company makes protective nano coatings meant to waterproof electronics. It ranked No. 53 on Deloitte’s Technology Fast 500 list in 2020.
HZO named Richard Holder its CEO earlier this year.
10. Phononic ($474 million; 2020 rank: 9)
Phononic, a Durham-based maker of cooling technology, saw its valuation more than double after it landed a $50 million investment last month from a Goldman Sachs fund focused on sustainability.
The investment puts the startup on a path for a potential IPO, company CEO Tony Atti told The N&O in July.
“We aspire to be a publicly traded company,” Atti said, “and all we can say is the amount of capital that we raised, the investors at the table, and the growth metrics we’ve demonstrated give us that path.”
Phononic, founded in 2009, manufactures semiconductor chips that power thermoelectric heat pumps for cooling. The chips are smaller and more efficient than traditional cooling methods that use air compressors, the company says.
The company currently has around 250 employees.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published August 13, 2021 at 5:45 AM with the headline "Here are the 10 most valuable venture-backed startups in North Carolina in 2021."
