That OnDeck $200M IPO, and Keeping Things Real in the New York Scene
It may be a rosy holiday for OnDeck (NYSE: ONDK) after its $200 million IPO, but this city’s tech scene needs to stay grounded as 2015 approaches.
New York-based OnDeck, an online service for small business loans, went public last week in one of the largest IPOs in the history of local technology companies. Prior to going public, its investors included SAP Ventures, First Round Capital, Khosla Ventures, and RRE Ventures. Online lending is a rapidly growing market, with other local startups such as Orchard Platform trying to be part of the mix.
OnDeck’s IPO might be the kind of breakout some critics of the New York technology scene have demanded to see more of. But is that example enough proof of legitimacy for this innovation community?
This is not to say New York startups don’t “make bank” for their investors. Google acquired Divide in May, reportedly for $120 million. Divide, once known as Enterproid, is a developer of software that lets people use personal smartphones on the job by keeping their work information separate and secure.
In April, ComiXology, a cloud-based digital platform for comic books, got acquired by Amazon for undisclosed terms. Based on the Cheshire Cat-like grin I saw on investor Brian Cohen’s face, ComiXology’s backers were, at the very least, satisfied.
There were other deals of some note in New York, though folks were tightlipped about how much money changed hands. In July, Poptip, a Techstars NYC graduate which developed an algorithm that deciphers what people talk about in social media, got acquired by Palantir Technologies in Palo Alto, CA. Terms were not disclosed.
Onswipe, another alum of Techstars NYC and a maker of custom mobile websites for publishers, was acquired in August by Beanstock Media in San Francisco. There was some disparity, however, between certain media outlets and Onswipe’s investors regarding the financial outcome of the deal.
Expectations are understandably high for the city’s startups, given the substantial funds that have gone their way. In July, venture capital database CB Insights issued a report that showed some $10 billion over five years had been invested in the New York tech scene.
Mayor Bill de Blasio has also laid out a few of his own hopes for the tech scene, including his plans to get more access to high-speed broadband for residents. In September, he introduced the city’s chief technology officer, Minerva Tantoco, at the New York Tech Meetup.
Meanwhile, Cohen, chair of the New York Angels, sparked some debate last week during a panel about whether or not having passion is enough to buttress the entrepreneurial community. He said he wants to see business people who can execute on their ideas.
Perhaps as 2015 looms, New York can further embrace the need to execute—and make good on the backing its tech community has received thus far.