BrainStation sat down with retail executives across three cities at our Future of Retail panel series to ask about where the industry is headed.
From self-driving cars to failed robot-generated predictions, it’s been a fascinating year for tech in Boston.
And with the holidays around the corner, what better time was there to look back at some of the year’s biggest stories? Here is a recap of the Boston tech scene in 2018.
Boston Led New York in Startup Funding (Again)
2018 marked the year that Boston “regained its longstanding place as the second-largest U.S. startup funding hub.” While recent years have seen New York as a second-place tech-hub after San Francisco, Boston surged ahead of the Big Apple to reclaim its second place spot this year.
“Boston often gets dismissed as a has-been startup city. But the successes are often overlooked and don’t get the same attention as less successful, but more hypey companies in San Francisco,” said Blake Bartlett, a partner at Boston-based venture firm OpenView.
A report of global “supergiant” VC rounds (venture rounds that hit $100 million or more) published this November also placed Boston ahead of New York, and fourth in the world (behind the San Francisco Bay Area, Beijing, and Shanghai).
Meanwhile, Wells Fargo’s stocking-picking robot, Aiera, also picked Boston over New York as the city most likely to host Amazon’s HQ2. As we know, it was wrong: HQ2 went to Long Island City, NY, and Arlington, VA. As we’ll see, though, Amazon found other ways to have a major presence in Boston this year.
Biotech Gave Boston A Booster Shot
Biotech and medtech were (perhaps unsurprisingly) a huge part of Boston’s performance this year, which is where Amazon comes back into the picture.
Amazon, Berkshire Hathaway, and JPMorgan Chase selected Boston as the headquarters for their new joint healthcare venture, headed by surgeon (and CEO) Dr. Atul Gawande.
“I have devoted my public health career to building scalable solutions for better healthcare delivery that are saving lives, reducing suffering, and eliminating wasteful spending both in the US and across the world. Now I have the backing of these remarkable organizations to pursue this mission with even greater impact for more than a million people, and in doing so incubate better models of care for all,” Gawande said in a statement.
The as-yet-unnamed company was announced in January and will focus on outcomes, satisfaction, and cost efficiency in healthcare. Tagging along with this announcement was the news that Amazon had acquired PillPack, a Somerville startup that delivers prescriptions by mail, for just under $1 billion. Prior to the acquisition, PillPack had raised more than $118 million in funding and been valued at $360 million.
Elsewhere on the biotech front, Moderna, a company that develops treatments based on messenger RNA (mRNA), went public with one of the largest biotech IPOs ever. Trading on Nasdaq under the symbol “MRNA,” the company went public in early December valued at $7.5 billion, with a larger than expected offering.
Circulation, a Boston-based startup that offers non-emergency healthcare transport, partnered with Lyft to expand their transportation options for clients across the US, letting users schedule their rides with Lyft directly through Circulation’s platform.
Three Boston companies were named to the 2018 CNBC Disruptor 50, a list of 50 companies from around the world that are deemed “disruptors” in their industries. All three companies fall under the Biotech umbrella:
- Ginkgo Bioworks, a startup that prints custom microbes for customers across industries
- Veritas Genetics, a whole genome sequencing startup with proprietary gene-sequencing technology
- Indigo Agriculture, a seed treatment company that aims to boost the health of plants, as opposed to people.
Newcomers Breath New Life Into the Tech Scene
2018 also saw a wave of initiatives related to immigration and tech.
Following a government crackdown on immigration and work visas, universities across the US began using the Global Entrepreneur in Residence program (started by the University of Massachusetts Venture Development Center) as a legal way to attract and retain foreign talent.
As part of the program, foreign entrepreneurs work part-time at schools, either as mentors or adjunct professors. In return, they are able to get cap-exempt H-1B visas, which gives them the chance to work on their own startups.
Since launching the program in 2014, the UMass chapter has helped 50 entrepreneurs start their businesses in Boston. Those companies have in turn raised over $416,442,265 in funding and created about 847 jobs.
Entrepreneurs and VCs at Boston’s HUBweek event spoke up on the matter during a panel discussion, encouraging entrepreneurs around the world to consider Boston as a landing (and launch) pad for their startups. Clement Cazalot, Managing Director of TechStars Boston and French native, noticed two things when he first arrived in Boston: the cold and the community. “Immigration is like medicine,” he said. “There is a unique case for every single individual, every single company.”
The City of Boston’s Chief of Economic Development chimed in to cite Boston as a role model for other cities. He credits immigrants in Boston with spending $4.3 billion every year, creating close to 20,000 jobs in the city. “This is not about taking your jobs; this is about creating jobs,” he said.
In related news, One Way Ventures, a $28 million seed fund that bills itself as “by immigrants for immigrants,” announced a series of investments over the course of 2018, investing in Sentenai, Edwin, Tive, Lovepop, Brex, Kebotix, Legalpad, BrandTotal, Momentus, and Easyship.
The City Attracts and Inspires
Managed by Q, a New York-based office management services startup expanded into the Greater Boston area in 2018, giving the city access to a range of services, including janitorial services, staffing, IT, and maintenance.
Another New York-based company, The Wing, a woman-focused, members-only co-working space, announced plans to open their Boston location in Spring 2019. The new location expands their US footprint, which currently includes locations in Manhattan, Brooklyn, San Francisco, and Washington.
This isn’t to say that local companies didn’t make their mark in 2018. Boston-based payments processing startup Flywire and 3D printing company Markforged, for example, made the Forbes’ 2018 Unicorn List, a compilation of companies Forbes thinks will be the next to hit the $1 billion mark. Forbes reached out to 200 venture capital firms for nominations, with revenue, funding, and recent valuation all taken into account.
Flywire, which enables universities, hospitals, and B2B companies better transact in foreign currencies, also raised a $100 million series D round in 2018. The round was led by Singapore-based Temasek Holdings and existing investors including Bain Capital Ventures and F-Prime Capital.Markforged, meanwhile, was also included in Deloitte’s 2018 North America Technology Fast 500 list. Markforged came in at number 10, with a three-year growth rate of 12,687 percent between 2014 and 2017.
Meanwhile, Tim Berners-Lee, the Inventor of the World Wide Web, officially launched Inrupt, a Boston-based startup backed by Glasswing Ventures. Inrupt’s mission is to turbocharge the movement to decentralize the web, including another Berners-Lee project: Solid, an open-source, privacy-focused ecosystem that will “restore the power and agency of the individuals” using it. According to John Bruce, Inrupt’s CEO, the company’s mission “is to bring resources, process, and skills to galvanize the open-source effort that Tim was leading out of MIT to help [Solid] become, truly, a force to be reckoned with. We are at the stage of the new web that Tim was at when he first started the World Wide Web.”
MIT also announced that they’re looking to raise $1 billion to support the MIT Stephen A. Schwarzman College of Computing, a school that will address the global opportunities presented by the rise of AI. As of September, the school had already raised $650 million.
Fittingly, self-driving cars also returned to Boston’s streets in 2018, after a brief shutdown following the death of a pedestrian in Arizona, who was struck by a self-driving Uber vehicle. In June, testing was approved to go city-wide.
“It really leaves Boston as a leader in this field, with a collaborative discussion and policy framework that is being organically developed,” said Bryan Reimer, Associate Director of the New England University Transportation Center at MIT, adding something that may very well sum up the city’s tech sector in 2018 (and beyond).
“Take baby steps, then take bigger steps, now take much larger steps.”