💬 Welcome to issue #2 of Between the Lines
And…we’re back! Hope everyone enjoyed America’s birthday party 🇺🇸. It’s been so rewarding to see the excitement, engagement, and further areas of exploration that issue #1 of Between the Lines generated amongst our community. There is more to come 😉.
In issue #2, we introduce “6th Street Stats,” an essay column where you can expect us to use data to tell stories about the Claremont technology community. In this week’s issue, we’ll explore just how prolific our community was in 2018, and highlight some fun commentary that some of our alums made on the interwebz.
My Best, Miles
📊 6th Street Stats: 2018 - A Golden Year
Authors: Josh Tatum & Miles Bird
To say that 2018 was just a successful year would be like saying hockey legend Wayne Gretzky was just a successful athlete. His 894 goals, 1,963 assists, 10 scoring titles, 9 MVP awards, and 4 Stanley Cup Championships would take offense — he was anything but just a good athlete. Similarly, from a venture and startup perspective, 2018 was anything but just a successful year for the Claremont entrepreneurial community.
If you ever had Professor Fan Yu (current head of CMC’s Robert Day School of Economics & Finance), you probably remember hearing something like “there is no such thing as arbitrage in the modern world - no such thing as a free lunch these days.” 2018, however, was about as close to a free lunch as you can find. You didn’t have to be Pat Gallagher — CMC alum and talented early-stage investor in Uber, Airbnb, Gitlab, and others — to have had a successful year. On just about every single metric, 2018 was the most successful and prolific year for Claremont entrepreneurs and the investors that backed them.
1: The Most Companies Founded
The year 2018 had the most alumni-founded startup companies of any other year in the schools’ existence - 62. This number is six more than the previous year and three more than the next best year ever in 2019. The amount of companies founded in 2018 alone makes up 8.5% of all Claremont-founded companies we’ve identified. And after only three years, these 60 companies have already raised over $92M1. Notable companies founded in 2018 include:
KoBold Metals, which is using AI to digitally prospect and discover metals like cobalt ore for the electric vehicle market. The company has announced $20M in funding to date by investors like Andreessen Horowitz and was founded by CMC grad Kurt House.
Wisetack, which is a point of sale lending business for in-person services, has announced $19M in funding by investors like Greylock, Ulu Ventures, and Bain Capital and was founded by Pomona grad Bobby Tzekin.
Stellar Health, which helps healthcare providers deliver higher-quality care through real-time notifications and meaningful incentives, has announced $15.1M in funding by investors like Notation Capital, Primary Venture Partners, and Point72 Ventures and was founded by Pomona grad Ben Kraus.
2: The Largest Amount of Capital Raised
The year 2018 also had the most amount of capital raised of any other year for Claremont founders - $18.9B. This total is over 2x the amount of any other year recorded for the consortium and makes up 45% of the total capital consortium alums have raised to date. These astronomical numbers are driven largely by:
Juul, an E-cigarette company that raised $13.5B in 2018 and was founded by Pomona alum Adam Bowen.
Cruise Automation, a self-driving car technology company that raised $4.1B in 2018 and was founded by CMC alum Dan Kan.
Samumed/Biosplice Therapeutics, a medical research and development company that raised $438M in 2018 and was founded by Pomona alum Osman Kibar.
Helix, a population genomics company that raised $200M in 2018 and was founded by Harvey Mudd alum Scott Burke.
Zwift, an indoor cycling technology leader that raised $125M in 2018 and was founded by Pomona alum Alarik Myrin.
3: The Largest Amount of Acquisition Dollars
The year 2018 also had the largest amount of acquisition dollars ever recorded - $8.1B. This amount is over twice the amount of any other recorded year and contributes to almost 50% of the entire amount of acquisition dollars in the history of Claremont-founded companies. The largest companies that drove these numbers were:
GitHub, a dev tool leader that was acquired by Microsoft for $7.5B and founded by Harvey Mudd drop out Tom Preston-Werner.
Heptio, a cloud-computing technology company that was acquired by VMWare for $550M and founded by Harvey Mudd alum Joe Beda.
BitTorrent, a streaming technology company that was acquired for $126M by Tron and founded by CMC grad Ashwin Navin.
4: The Largest Number of Major Liquidity and Unicorn Status Events
The year 2018 also had the largest number of major events2 - 11. We already mentioned the three $100M+ acquisitions (GitHub, Heptio, & BitTorrent). Three other companies also went public in 2018:
Avalara, a tax automation software company founded by CMC grad Scott MacFarlane
Homology Medicines, a genetic medicines company founded by Keck graduate Laura Smith
SI-Bone, a biomedical device company founded by CMC & CGU graduate Mark Reiley.
Five companies also achieved unicorn status in 2018, including Avalara (achieved unicorn status before it went public in the same year), GitHub (achieved unicorn status before it got acquired in the same year), and Juul.
Now…..what was so special about 2018? Well, there are a few other trends that can help put 2018 into context:
Claremont alums have been founding more companies over the preceding decade. In 2008, we tracked 20 companies founded by Claremont alums that year, and that number more than tripled over the subsequent decade. It can take up to a decade, sometimes even longer, for a startup to IPO, get acquired, or shutter its doors. With more Claremont alums founding companies, this means more acquisition events; and in the power-law game of venture capital, this means a higher likelihood of massive outlier events like the $7.5B GitHub acquisition or Juul’s $13.5B raise.
We were, and arguably still are, in one of the longest bull markets in history, and technology has been leading the charge. In fact, August 22, 2018, officially marked the longest bull market in history with 3,453 days from the pits of the 2008/2009 financial crisis.
Both of these trends play into the importance of vintage years. Many of these companies likely benefited from building fiscally tight cultures with a ‘cockroach’ mentality during the low capital deployment years during and after the 2007-2009 crash, and then riding the long economic recovery and bull market we have experienced over the following decade.
Claremont alums are dope at building companies. Clearly.
Whether or not there truly are no free lunches in the modern era, if you were investing in Claremont-founded companies leading up to 2018, you’re likely not too concerned about what the cost of lunch is.
All data for this article was gathered by the Between the Lines team from sources like Pitchbook, Crunchbase, and conversations with alums. As always, please feel free to reach out if you think we’re missing something in our story or if you have an idea for a future article!
🤔 Follow-up Questions
While incredibly exciting, we’re just scratching the surface with this story. What career and life experiences set these founders up to achieve break-out success? Are there ways that we can predict future breakout vintage years and foresee the next Golden Year? How did these companies that had successful exits in 2018 avoid the pitfalls of numerous other companies that instead had to shut their doors in 2018?
These questions all feel relevant for anyone in our community who’s looking to make an impact in the world of technology and entrepreneurship. We certainly don’t have all the answers, but we’ll keep digging in Between the Lines. We would love to hear your thoughts in the comments below, and as always, feel free to subscribe and share.
🗣️ Conversations on the interwebz:
Looking to explore some interesting and exciting startups? Check out this thread by CMC grad, VC investor, and human startup encyclopedia Yohei Nakajima!
Excited about the upcoming NBA finals? Did you know that the head coach for the Milwaukee Bucks is a Pomona graduate from ‘92? 🤯 Congrats, Coach Budenholzer on the Buck’s first finals appearance in 47 years 🏀! Are the 47 years a coincidence…?
Mid-week blues got you down? Grant Hosford, CMC grad and founder of edtech company codeSpark agrees…cheers to another cup of joe! (Ever wonder where the term ‘cup of joe’ came from? Well, we were curious, and it turns out there are three leading theories). ☕
Takeaways
Get Excited - 2018 was a crazy impressive year for Claremont founders, but we’re even more excited for what’s around the corner for the Claremont technology and entrepreneurship community.
Get Creative - Turns out there are businesses to be built with your liberal arts degree in every industry, from mineral prospecting to youth coding education.
Since 2010, the $92M 2018 vintage year ranks about in the middle for the most amount of capital raised within three years for a vintage year. However, this data is coming from Crunchbase which often lags and so the confirmed $92M is likely a conservative number and these 60 companies have likely raised far more.
The ‘major events’ being defined as IPOs, $100M+ Acquisitions, and Unicorn Status unlocked - a private company receiving financing at $1B+ valuation