Following The Money

Money talks; it is a commonly held belief that what you spend your money on shows who you are. This is also true in industry. Investment money is the indicator of future trends. Current investments lie heavily in technology-related companies. When looking at recent big investment winners, one of the most striking trends is the wide variation in concept.

Recently, Auth0 — a company dedicated to online identification innovation — closed a Series B round of $15 million, garnering a total of $24 million in total investment. The company’s business concept is to provide a 3rd party identification verification service that can be widely accepted and applied. This solution allows services to focus more on product service and less on providing security against the constant threat of hacking. This is a common trend in the types of companies which are being created now — security, especially online, is a massive concern.

Further evidence of the pervasive concern regarding security of future technology can be seen in the activity surrounding the app Virtu. While Auth0 is focused on the validity of identification, Virtu looks at the security of the information itself.

Protecting content from intrusion through file encryption for messages and data transfers has become a key factor in business security. Virtu closed a Series A round of $29 million. Yet another example of task-specific security companies successfully raising serious money.

Tech companies are sprouting up en masse to fill the gaps being left by large banks. One example gaining momentum is the company LendUp. This company seeks to boost the credit card business by focusing on small-dollar loans with higher risk clients. This demographic is extremely underserved by large banks and investors recognize the need for this service.

LendUp recently raised another $47 million in equity financing, increasing the total value to $500 million. The card was launched last year. This is a clear example of the enthusiasm with which investors are pursuing alternative methods of finance.

There is a massive amount of money moving around in the cutting edge of tech-based services. No market is immune from the impact of tech-centric startups, and investors are quickly seeing that reality. As more funding is funneled into successful services, we can expect to see the disruption of traditional markets become even more prevalent.