6 famous startups you may not know were built by venture builders
There are 500+ dedicated venture builders, startup studios, and venture incubators across the globe. Yet it feels like only a selected few know what venture builders do, or what they’ve built — if anything.
So after yet another person asked me “c’mon, name a successful startup that has ever come out of these startup studios”… let’s just say the game was on. 😏
So here are six famous and successful startups (unicorn alert!🦄) from e-commerce to fintech to logistics you probably did not know were built by venture builders.
1. Zalando — the Zappos of Germany
Yep, you may not believe it but Zalando was created in 2008 by non-other than Rocket Internet — the startup incubator and venture studio with a controversial reputation for duplicating successful business models of the likes of Uber, Amazon, or Paypal across the globe.
The story of the now billion-dollar fashion business allegedly started with a Hail Mary after the founders Robert Gentz and David Schneider returned from a failed venture in LatAm. Inspired by the US startup Zappos, they were determined to start selling flip flops online with an initial grant of €50,000 granted by RI.
And to be honest, at first, Zalando seemed like one of the business models that would not fly. The doubters were especially critical of the now-famous Zalando signature policy of free deliveries and free returns: the operations and costs of the fulfillment and logistics were expected to kill their growth. Not to mention the 2008 recession.
Yet, lo and behold, 12 years later Zalando is a household name expanding rapidly during the Covid-pandemic. As of their Q3 results, Zalando is expecting its revenues to grow even up to 23% to a whopping 1.87 billion euros by the end of the year.
And what is even more impressive is the scale in which Zalando managed to set up their pick, pack, and returns management as over 50% of their sales still get returned. Today they swear 97% of the returns are already resold and as per the sustainability trend fighting fast fashion, the company is now pledging to a net-zero carbon footprint on all deliveries and returns
Not bad for a Rocket Internet company is it. 🤭
2. Bark & Co. — the Birchbox for pups
If you got a puppy, you’ve probably heard of these guys. Bark & Co. is most famous for the original monthly subscription Bark Box — think Birchbox but for tail-waggers — that was founded in 2012 by Carly Strife, Matt Meeker, and Henrik Werdelin.
But what you may not know, is that Bark Box was actually incubated by Prehype, the international venture builder known for its other incubatees like Managed by Q (acquired by Eden 2020) and Roman. The Prehype part of the Bark history is rarely mentioned in their interviews, so to know what kind of relationship they have had and have today with Prehype is not exactly easy.
However, what we do know is that Bark & Co. has become a massive success story over the past 10 years. Mainly thanks to their immaculate commitment to community-based brand building and successfully targeting “nutty dog people”.
In 2015, Bark & Co. were already one of the leading brands in Instagram pioneering in the now popular influencer space by partnering with 400+ most-followed pups on Instagram. Today they’ve gathered an already loyal following of nearly 2m dog-owners across the globe.
Furthermore, today Bark & Co. employs 400+ people making over $375 million in annual revenue as they’ve expanded their offering from Bark Box to toys, health products, and dog foods. They’ve also dubbed themselves as the most dog-centric company in the world — which is probably true.
3. Twill — Logistics simplified
Meet Twill, a simplified logistics service for small and medium-sized businesses. Originally Twill was built by non-other than BCGDV for Damco. Yet as per Damco’s merger into Maersk as of 2020 Twill is now a Maersk company.
Launched in 2017, Twill one of the first-movers in simplifying freight logistics for the smaller corporates who’d like their shipments to be booked with only a few clicks without a heavy quotation process. And beyond just purchases, the platform enables the merchants to have full visibility on their shipments as well as to smoothly communicate with the end-buyers.
Based on what I can gather, Twill was created through a partnership between BCGDV and Damco as a corporate venture tapping into the already existing logistics business of Damco. The idea was hatched to succession in-house with the help of an established founder/entrepreneur until it was handed over to the official venture team headed by the first CEO Troels Stovring.
Today Twill is one of the known names in logistics and transport, with outposts in more than ten countries, including the UK, Germany, India, and China. Not bad for a corporate venture!
4. Medium — the platform for mid-length blogs
This is where things get a little meta, I know. But Medium was originally coined by Evan Williams, the man behind Blogger and Twitter — and Obvious Corp. the venture builder also known for ventures like Lift and Beyond Meat.
Now, as it often is with venture building companies, it is hard to figure out how much independence or freedom Medium or Twitter enjoyed of Obvious Corp, and how much the Corp was just a collective of entrepreneurs Williams, Stone, and Goldman doing cool things together.
But at least based on the 2013 announcement of Obvious Corp transforming into Medium, it’s fairly obvious (pun intended) that the Corp had supported Medium in its early startup face with resources and network towards the success it is to date.
Over the years Medium has become the place to write for most startup peeps and techies, despite the on-going debate over the best ways to monetize the content, share the revenue with the creators, and curate content for the readers. Today Medium has 300,000+ members of the Medium Partner Program and it has raised $132 million in venture funding. But interestingly, it seems Medium is yet not turning a profit.
5. Undo — No bulls**t insurance for Millenials
Next up, insurtech: Undo is a Danish startup trailing the way for fintech and future of insurance in the Nordic startup ecosystem. And who was the company built by? No other than Rainmaking Ventures.
In 2017 the company brought to market a millennial and Gen Z friendly way of purchasing insurance, with a completely reformed productization model allowing customers to pay only for the things they really want to insure — like their bikes, apple products, and designer clothes. To date, they’ve already captured 40% of the target segment in Denmark.
What makes Undo a unique pick in this bunch of startups, however, is that they are one of the few corporate ventures built by an external venture studio, much alike Twill & BCGDV.
The startup was built by the CEO Sophie Bohr Grønbæk, and the rest of the founding team under the Rainmaking umbrella from 2016 onwards. To accelerate their growth in the early phases, Undo tapped into an existing insurance license and operations by partnering with Tryg — one of the largest insurers in the Nordics.
Today 50% of Undo shares are held by their lead investor Tryg, as the company has grown to 20k customers and expanded their insurance from contents insurance to flexible travel insurance all to way to car insurance launched in 2020.
6. Affirm — a Fintech unicorn
Moving on to unicorn territory, Affirm is a provider of point-of-sale loans for consumers operating in the US. It was founded in 2012 by Max Levchin, Nathan Gettings, Jeffrey Kaditz, and Alex Rampel via the startup studio HVF
What is peculiar about HVF is that their name stands for “Hard, Valuable, Fun”, setting the tone for their operations and incubation activities. They are mostly known for their successes with other famous startups like Yelp and Glow.
And what comes to Affirm, it is like Klarna but 10 years ago: It was one of the first companies to revolutionize the way we make purchases online, offering a new option to “buy things now, pay for them later” without excessive credit checks and approval protocols. One-click at the cashiers and the money is yours. And was with standard credit cards, you’re expected to pay back in installments.
Since 2012, Affirm has grown into a Series G scale-up, employing 940+ people and working with over 6000 merchant partners. Having raised over $1.3 billion in venture capital, it is also one of the major fintech unicorns to come out of venture studios.
And that was that. Six famous, high-growth startups that came out of venture studios, incubators, and corporate venture builders.🚀
These successful examples show, that those who have the skills and means can hatch equally (if not more) successful startups as founders in the wild. At least this is what I believe in, as we are launching our new ventures at Rainmaking Venture Studio. 😉
And hey, if you are looking for more famous venture build examples, I recommend reading this overview from VentureBeat or start scouting through this list of venture builders curated by KarSin.
Alternatively, you can also join our studio newsletter to keep in the loop on new venture opportunities and market trends at Substack.
