The pace of change in the tech sector is accelerating. This year's AO 100 list of the hottest private companies includes a big batch of young innovators paving the way in emerging markets.

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by Packy Kelley



As we created the 2007 list of AlwaysOn top 100 private companies, we found that high-tech startups are again going through significant lifecycle events—fundings, mergers and acquisitions, and even IPOs—at a rapid rate. We’re seeing activity in a wide range of sectors, including mobile, greentech, security, social media, components and infrastructure, and on-demand services for consumers and businesses alike.

With the large number of promising contenders, deciding which companies make the AO100 list is always complex. To pick the final winners, AlwaysOn editors, KPMG, Bridge Bank, Merrill Corp., Level 3 Communications, and Manatt, Phelps & Phillips surveyed industry insiders and sorted through the 600-plus global company nominations. We then evaluated each company against several criteria: innovation, market opportunity, commercialization, media buzz, and stakeholder value creation.

Another way in which the list’s makeup has changed is that only 8% of the companies on this year’s list were also among the AO100 in 2006. A number of our 2006 winners—13%—had significant exits. Notables include DivX, Glu Mobile, and Aruba Networks, which went public; YouTube, which was spectacularly acquired by Google; and Ironport, acquired by Cisco.

This year, many of the companies on the AO100 list are at earlier stages of development than in previous years. Although 80% are shipping products, 5% are still developing their products (but show enough potential to be included on the list), while 6% are just beginning to launch beta products. The average funding per company and total funding for the list also show the shift toward younger companies. Last year’s AO100 raised a total of more than $5.5 billion in VC funding and the median funding amount per company was close to $44 million. By contrast, the far earlier-stage 2007 list has raised $2.2 billion total, and median funding per company is around $22 million.

We saw nominations from many new, exciting companies based outside Silicon Valley, showing that technology innovation continues to become more global and distributed. In 2006, 71% of the AO100 hailed from California; this year that number dropped to 56%, and more companies from the Northeastern U.S. made the list. For example, Vivox, based in Massachusetts, is adding voice to social networking and virtual worlds, while New York–based Tabula Digita is developing educational games for students and institutions. The Northwest provided strong contenders too, such as Seattle’s SeaMobile, which provides wireless voice and data communications for cruise lines, ferries, yachts, container ships, and offshore oil platforms.

As for industry trends, security remains a vibrant area. AO100 companies representing this sector in 2007 include 3VR Security, 41st Parameter, and Bit9. The mobile sector also continues to grow—especially around making the mobile phone or device a more complete (and simpler) tool for finding things and providing services on the go.

Social media—community and social networking companies—continue to innovate. Examples include Intercasting, which is providing platforms to build communities and markets around user-generated, location-aware mobile content, and Gaia Online, this year's overall winner. Intercasting is media-focused, while Gaia is half social network and half virtual world—showing off new business models in the space.

The AO100 winners will be honored at the Stanford Summit, an executive summit presented by AlwaysOn and The Stanford Technology Venture Program on July 31st to August 2nd at the Arillaga Alumni Center on the Stanford University campus. Check out the full program for the Stanford Summit here.

Tickets to the Stanford Summit are still available—click here to for the program, or here to buy your ticket now.

Full coverage of the AO100 companies will also appear in the Summer issue of AO’s print magazine that will be premiered at the Stanford Summit. Click here to learn how to get a copy of this issue.

Congratulations to all the AO100 winners! AlwaysOn and our partners look forward to honoring you at the Stanford Summit on July 31st.

Consumer & Media   
Associated Content
Azureus
BabelGum
Baynote
Bebo
Booking Angel
Flixster
Gaia Online  **OVERALL WINNER**
Genius.com
JaJah
Jaxtr
Kaneva
Loopt
Netvibes
Oodle
Paltalk
Pando
Platial
Stardoll
Tabula Digita
Topix
Trulia
Viagogo
Wikia
Zcubes

Devices & Components   
Artimi
Azaire Networks, Inc.
Azul Systems
BroadLogic
Identity Engines
Myvu
RGB Networks

Enablers   
Active Network, The
Ad it Last
Aggregate Knowledge
Box.net
Choicestream
Coemergence
Collarity
Critical Mention
Doba
Log Savvy
Metaweb Technologies
NearbyNow
Nextrials
Oversee.net
Payscale
Pluggd
Quigo Technologies
ScanScout
Singlefeed
Think Passenger
Vivox
Vizible
YouSendIt

Enterprise   
3VR Security 
41st Parameter
Bit9
Codenomicon
Coghead
Coverity
Diaphonics
Group Systems
Mimosa Systems
MuleSource
Ring Cube
SOA Software
SuccessFactors
Untangle
Visible Path

Green
Amyris Biotechnology
Ausra
GridPoint
Hydroxyl Systems
Solaicx
Verdiem

Infrastructure   
Arch Rock
Blue Lane Technologies
Carbonite
Etelos
rPath
Scalent
Sea Mobile
SiBEAM
Stoke
Teneros
Wefi

Mobile
4INFO
Admob
Apptera
Digit Wireless
Funambol
Intercasting Corp.
iqzone
Jingle Networks
JumpTap
Mobivox
Mspot
TeleNav
Unwired Buyer