What are the 10 most valuable startups in North Carolina?

Over the past decade, North Carolina venture-backed companies and startups have seen a meteoric rise in valuations.

In 2010, as the country was just starting to exit the Great Recession, the most valuable startup in North Carolina only reached a valuation of $81.5 million.

Today, four startups have reached a valuation of more than a billion dollars, showing just how much growth the state’s tech economy has seen in the past decade. That number would have been five just a few weeks ago, before Wilmington-based nCino filed for an initial public offering on the Nasdaq stock exchange that valued the financial technology company at $2 billion.

At The News & Observer’s request, PitchBook, a venture capital research company, compiled a list of the most valuable North Carolina startups, as of July 22.

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.

For a few examples on the list, the most recent valuation is still unknown by PitchBook.

Here’s the Top 10 in North Carolina:

1. Epic Games ($17.9 billion)

Cary-based Epic Games has been the most successful venture-backed company in the state since it released its record-breaking game Fortnite. After raising another $250 million this month, Epic Games now has a valuation of $17.9 billion.

The success has made its CEO, Tim Sweeney, one of the wealthiest people in the state, with a fortune estimated at more than $7 billion.

Epic, which has seen a boost during the COVID-19 pandemic as millions shelter at home, is expanding its headquarters in Cary to make room for up to 2,000 employees.

2. AvidXchange ($1.65 billion)

Founded in 2000, Charlotte-based 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.

Earlier this year, AvidXchange raised another $128 million, putting its valuation at $2 billion, according to reports. PitchBook still lists AvixChange at $1.65 billion.

The company is likely to go public at some point, though Praeger told Reuters in April it wouldn’t be this year. AvidXchange, which already has more than 1,000 employees, plans to double its headcount in Charlotte after receiving incentives from North Carolina in 2018.

3. Pendo ($1.025 billion)

Raleigh software company Pendo became a unicorn — a startup valued at more than $1 billion — last fall, when it got an injection of $100 million from investors.

The company, led by Todd Olson, has been one of the biggest successes in the Raleigh startup scene, growing from four people in 2013 to a company nearing 500 employees. Its software helps businesses improve their websites and products through behavioral analytics.

Soon, the Pendo name will also adorn the Raleigh skyline when it becomes the flagship tenant at the under-construction 301 Hillsborough Tower, now known as Raleigh Crossing.

4. Tresata ($1 billion)

Charlotte-based analytics software company Tresata is another one of the state’s recent unicorns. Tresata is one of three billion-dollar startups in the Charlotte area, along with AvidXchange and Fort Mill, S.C.-based Red Ventures.

The company, led by Abhishek Mehta, recently created an app that looks through publicly available data to predict the next COVID-19 hotspots.

5. HZO ($640 million)

The manufacturing startup HZO is a recent arrival to North Carolina’s startup scene, having relocated from Utah to Morrisville last March.

The company makes protective nano coatings meant to waterproof electronics. The company told the Triangle Business Journal last year that it hopes to employ 500 people in Morrisville in the next three years.

6. Prescient ($600 million)

Prescient, a construction technology company, is also a recent transplant to North Carolina.

Founded in 2012, the company uses design software to create prefabricated framing for multistory residential buildings up to 14 stories tall.

In 2017, the company moved its headquarters from the Denver area to downtown Durham. However, its headquarters there was destroyed by a gas explosion last year. The company now lists its headquarters as Charlotte, and it maintains a manufacturing facility in Mebane.

7. Humacyte $450 million

Durham-based Humacyte landed one of the largest investment rounds in the state in 2018, helping it reach a valuation near $450 million.

Founded in 2004, the regenerative medicine company develops bioengineered blood vessels. Its technology is being studied for use in patients with end-stage renal disease.

8. Passport ($293 million)

Passport, which makes transportation management software, is another Charlotte-based startup.

The company has grown its work force to more than 300 people, according to Crunchbase News. The startup’s app is used by companies and organizations across the country to help manage mobile payments for parking, and it also provides municipalities with real-time data on parking availability.

The company raised $65 million last year, but didn’t reveal its valuation. It is likely higher than what is listed by PitchBook.

9. Phononic ($229 million)

Durham-based refrigeration technology startup Phononic made a name for itself by building cooling technology that is more efficient than traditional devices.

Its cooling technology, originally leased from the University of Oklahoma, has been used in a variety of places, from hospitals to bottling companies.

Phononic has raised more than $160 million from investors since it was started in 2009, and has made CNBC’s list of most disruptive startups multiple times.

10. PrecisionHawk ($210 million)

Raleigh drone technology company PrecisionHawk had an eventful winter.

In December, the company raised another round of $32 million from investors and moved its headquarters into downtown Raleigh.

A little more than a month later, the company, which develops software to run analyses of data gathered by drone footage, replaced its CEO and promised to crack down to reach profitability.

Altogether, the company has raised more than $136 million. PitchBook’s most recent valuation for the company did not include the $32 million round from last December.

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 July 24, 2020 at 6:00 AM with the headline "What are the 10 most valuable startups in North Carolina?."

Zachery Eanes

The Herald-Sun

919-419-6684

Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.