The startups featured today are five that I selected based on their answers about macro-economic pressures on startups, as well as factors such as funding, named customers, and the founders’ track records. I then used these to fine-tune ChatGPT’s selection skills to select the next and final batch of winners, which will be featured on Tuesday. You can read more about the selection process here.
Cyera
Year founded: 2021
Funding: $60M
Market sector: Data security
What they do: Provide a cloud data security platform
How macro-economic turmoil is impacting their sector: “Security, and in particular data security, while not immune from the impacts of a looming global recession, benefits from being an imperative for any business. However, the pressure to show ROI on any expenditure presents unique challenges to an early stage startup.
“In part, the macro trend of seemingly constant data breach disclosures (which include IP theft and piracy) and the resulting increase in regulations (and the fines they impose for violations) represent tailwinds. This is especially true as cloud adoption, digital transformation, and – since the pandemic – a pervasive work from anywhere culture make it necessary to implement security controls across an ever-increasing threat surface. Add to that geopolitical unrest adding scrutiny to how information crosses boarders, complicating interconnected service architectures designed to make data flow freely.” – Ariel Weil, VP of Marketing for Cyera
How they will navigate macro-economic pressures: “Cyera was built to address the collective pain that CISOs and their teams feel every day: securing data to eliminate breaches and data loss. Data represents an organization’s most valuable asset, and to secure it, you have to know it – where it is, what it represents, who can access it, and the exposure it represents. The challenge is that data is fluid, and securing it requires knowing what the data represents so you can apply the appropriate controls to avoid disrupting the business. Cyera’s Data Security Platform is AI-powered and agentless, continuously learning your data and what makes it valuable. That requires automatically and continuously gaining deep knowledge of a data’s context, and learning how it is used, who can access it, and how it is used across environments and platforms.” – Ariel Weil
FOUNT Global
Year founded: 2022
Funding: $10.75M
Market sector: Enterprise HR software
What they do: Provide friction management and employee experience software
How macro-economic turmoil is impacting their sector: “Wasted worker effort damages productivity and retention. In this macroeconomic climate where uncertainty and a tight talent market exist simultaneously, enterprises need to find ways to remove friction for employees in order to attain higher productivity and lower attrition among frontline workers and other value creators.” – Christophe Martel, CEO and co-founder and CEO of FOUNT Global
How they will navigate macro-economic pressures: “FOUNT is solving a critical economic problem for companies at a time when there are few alternatives that enable companies to pinpoint and resolve these issues. We are well-funded, have an ambitious product roadmap, and our customers are getting results and deriving value from our solutions.” – Christophe Martel
Memfault
Year founded: 2018
Funding: $35M
Market sector: IoT
What they do: Provide an IoT reliability platform for connected devices
How macro-economic turmoil is impacting their sector: “Our customers have been impacted by the chip shortage, which in turn has impacted the market significantly. Some customers have had to pull back on production because they can’t find enough chips. Other customers have changed their development process entirely by switching to available chips.
“In terms of the wider tech slowdown, there’s continued momentum toward more automation, and more customers willing to invest in software and automation as a competitive differentiator.” – François Baldassari, CEO of Memfault
How they will navigate macro-economic pressures: “The commoditization of the IoT, along with innovation in hardware and connectivity, has led to a continuous expansion of products that need to be monitored and need to operate reliably, from consumer homes to industrial manufacturing plants. The demand for our product has increased YoY since our founding, and we expect that growth to continue.
“We just closed our $24M Series B after a strong 2022 that saw us sharpen our go-to-market motion in response to a clear acceleration in the business. There is also more embedded engineering and product development talent available today. We continue to grow a world-class team and expect to double staff size from January 2023 to January 2024.” – François Baldassari
Selector AI
Year founded: 2019
Funding: $33M
Market sector: AIOps
What they do: Provide an AIOps platform
How macro-economic turmoil is impacting their sector: “The recent market turmoil has had a minimal impact on our market sector. AIOps tools offer enterprises a more cost-effective way to avoid costly outages, an issue that can be crippling for organizations, regardless of economic conditions.” – Kevin Kamel, VP of Product Management for Selector AI
How they will navigate macro-economic pressures: “As a startup in the rapidly evolving AIOps space, Selector understands the importance of responding quickly to changing market conditions. Selector is well-positioned to navigate the current market troubles and continue scaling up in 2023 because we offer a solution that addresses a critical pain point for businesses: the frequency and impact of costly outages.
“By providing our customers with an advanced AIOps solution to reduce downtime and improve overall operational efficiency, we offer a value proposition that will remain relevant and attractive to businesses even during challenging economic times. Furthermore, Selector’s commitment to continuous innovation enables us to stay ahead of the competition, push the boundaries of what is possible in AIOps, and meet the evolving needs of our customers.” – Kevin Kamel
Virgil Security
Year founded: 2014
Funding: $4.9M
Market sector: Cybersecurity
What they do: Provide cryptography solutions for software developers
How macro-economic turmoil is impacting their sector: “As a smaller vendor that is arguably adjacent to Amazon, Google, and Microsoft, which all offer some minimal set of security solutions for their cloud services, we are seeing a lot of nervousness in the market around whether or not customers are risking their product’s future by using a smaller vendor that might not be as well-resourced to survive the current market turmoil.
“We are, interestingly, seeing a simultaneous willingness to continue to defer adding security and privacy features (for some market segments they are “nice to haves” not “must haves”), which is in opposition to increasing regulatory demands, especially with EdTech and MedTech in the U.S.A. and all things GDPR in Europe.
“For companies that understand those risks, however, our comparatively small size is seen as an advantage. It affords us greater ability to focus on what we do: cryptography. That is the only thing we do, so, unlike our gigantic competitors, we can’t reallocate budget away from it.” – Michael W. Wellman, CEO of Virgil Security
How they will navigate macro-economic pressures: “Our small size can be a big benefit in a turbulent market, especially for customers coping with new security risks. Our size allows us to provide concierge-level consulting and development services to speed our customers to market. That higher level of service ends up saving them money in the long run not just because of the faster time-to-market, but also because it reduces their required developer head count to simply get to market. This savings allows them to stretch their budgets and deliver products and features that they might otherwise have to defer.
“We have been blessed by having a talented and resilient development team; however, the vast majority of our staff is in Ukraine, so one can clearly imagine the challenges that creates. Our Ukraine office was originally in Donetsk, and we earlier had to relocate our office and our team to Kyiv, but that prior experience has weirdly served us well in navigating the last year of chaos. We also had customers and staff in Russia which has created an entirely different set of problems.
“Overall, I assess the market conditions as a net neutral to us wherein the various costs and benefits of the chaos essentially balance themselves out. But our Ukrainian team would really like to see Russia go home, regardless!” – Michael W. Wellman
