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Focus is key:
6 cloud startups kicking ass by going narrow
August 5, 2013 7:36 AM
Christina Farr and Sean Ludwig
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Venture capitalists are betting on cloud startups with a specific focus:
health care, financial services, real estate, and other industries.
This more specialized, “vertical” industry approach is a stark contrast to the more horizontal approach taken by first-generation cloud companies.
Emergence Capital founder Gordon Ritter believes the next generation of cloud companies won’t try to do it all and cater to every sector, like Salesforce.
“In the client-server days, the horizontal companies were the winners,” Ritter told VentureBeat recently.
“But now, we believe the next fundamental wave in the cloud is firms that are focused on verticals.”
Emergence Capital’s partners have invested in business-to-business startups for decades.
The firm has developed a reputation as the “Sequoia of SaaS,” a reference to Sequoia Capital, one of the giants of Silicon Valley tech investing.
Ritter made his millions by investing early in Salesforce, and he founded a company with Salesforce’s Marc Benioff, so his “vertical” thesis is a bit of a departure in strategy.
Emergence is not the only firm to see value in this approach.
Andreesen Horowitz investor Frank Chen said, “Specific vertical investments are now particularly appealing, especially on mobile.”
But it’s one thing to have a thesis. We’re giving you a list of specific, vertically oriented cloud startups so you know exactly what to watch.
To create this list, we reached out to cloud-focused investors from Data Collective, General Catalyst, Lightspeed, Andreessen Horowitz, and Illuminate Ventures.
The companies on our list are all tackling different sectors but share a capability to surmount regulatory hurdles, win over large corporate customers, and pull in sizable revenues. Or they simply are tackling a challenge in their sector in an eye-opening and innovative way that’s begging for attention.
Here are six cloud vertical startups you should be keeping an eye on…
http://venturebeat.com/2013/08/05/top-vertical-cloud-startups/
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