The Region’s Most Successful Exits
Wednesday, January 20, 2021 from Corte Madera, CA
As COVID-19 continued to upend and dominate our lives for the greater part of 2020, it’s of little wonder that the news of another successful North Bay startup exit in late Q3 flew under the radar. Yet, in late September, it was announced that Alluxa, a Santa Rosa-based manufacturer of high-performance optical filters and thin-film coatings, was being acquired by Charlotte, North Carolina-based EnPro Industries for $255 million.
The Alluxa exit is the latest success story in the North Bay’s rich history of being home not only to thriving optics and telecommunications startups but to successful startup companies across multiple sectors. As we published back in May, if Marin + Sonoma together were the 51st U.S. state, this hypothetical state would have seen more quality startups formed here last decade than half of U.S. states and would rank in the Top 3 of all states in the number of quality startups per capita.
How then does Alluxa compare to previous North Bay exits? We went back through the data and analyzed the most successful exits for local startups last decade. What we found was that, from 2010-2019, there were 11 startup exits for companies ten years old or less for $100 million or more. That number astounded even us!
What is more astounding is how little-known some of these success stories are across the Marin + Sonoma community. We aim to change that by shining the spotlight on these incredible companies.
Top Exits for North Bay Startups ≤10 Y.O. – 2010-2019
Source: MSIV original research across discussions and multiple platforms including Crunchbase, Pitchbook, and LinkedIn
* IPO exit value assumed to be company market cap six-months after IPO date
A Bit More About These Companies
Ultragenyx ($1.3B), a Novato biotech company focusing on rare genetic diseases, is now one of Marin’s largest private employers. Founded by a former BioMarin executive, the company had a successful 2014 IPO and has seen its market cap more than 7x since then, as the company is now valued at over $9B.
Glassdoor ($1.2B), founded in Marin with the goal of giving employees an inside look at companies, now helps job seekers all over the world find jobs and companies they love. Japanese HR conglomerate Recruit Holdings acquired the Mill Valley unicorn in 2018. Glassdoor continues to operate as a standalone business.
Millipede ($325M+), founded in Santa Rosa with offices near the STS airport, developed a medical ring to be used for valve repair when treating heart disease. Boston Scientific acquired the company in 2018.
Claret Medical ($220M), also based in the same Santa Rosa medical device cluster, developed a system that reduces the risk of stroke during aortic valve replacements. They also sold to Boston Scientific in 2018.
KRAVE Jerky ($220M), founded in the city of Sonoma in 2009, created an all-natural snack brand of premium jerky products. Hershey’s acquired the company in 2015 before ultimately selling the company back to Sonoma Brands in 2020.
Cyan ($215M), founded by veterans of the North Bay’s Telecom Valley cluster, offered software-defined networks and packet-optical solutions for service providers, data center operators and private networks. The company completed a successful IPO in 2013 before ultimately being acquired by Maryland-based Ciena for $488 million in 2015.
ClairMail ($173M), founded in Novato before relocating to San Rafael, built infrastructure around mobile banking and payments systems. UK-based Montise, a specialist in mobile banking, acquired the Marin FinTech startup in 2012.
mFoundry ($165M), a Larkspur-based FinTech startup, was acquired by Jacksonville-based FIS in 2013. The company built SaaS-based mobile banking solutions for financial institutions and retailers across the U.S.
Enphase Energy ($159M), founded in Petaluma by other veterans of the North Bay’s Telecom Valley cluster, offers a micro-inverter system that delivers solar energy to homes and businesses. Since its 2012 IPO, the company’s share price had a very tumultuous run before increasing substantially in 2019 and skyrocketing in 2020: it’s market cap is now more than $25.3B, or 159x the IPO lock-out price.
Zep Solar ($158M), a San Rafael-based solar startup that built a rail-free module mounting system, sold to SolarCity in 2014 in just its fifth year of operations. SolarCity was later acquired by Tesla and, well, we all know how that stock has performed as of late.
Teknovus ($123M), a Petaluma-based producer of computer chips and software for broadband access networks, was acquired by Irvine-based Broadcom in 2010. At the time of the acquisition, the company had come to employ 70 people in Petaluma.
Key Takeaways
1) Tip of the lceberg - Despite the North Bay having an undeveloped local entrepreneurial ecosystem, local startups demonstrated a strong track record of successful exits over the past decade. Imagine the type of success we could achieve as a community if we developed a robust ecosystem complete with capital, mentorship, networking, talent, and thought leadership. This is precisely the vision of Marin Sonoma Impact Ventures - coupling our strong track record of growing successful startups with a community-wide effort to help local entrepreneurs build the next great North Bay company. If we do this right, there is no reason why we shouldn’t see 33 of these successful exits in the 2020 decade instead of 11 and create thousands of incremental quality jobs in the process.
2) Success Begets Success - So many of these startup success stories had their roots in other local startup successes. Veterans of the Telecom Valley startups founded Cyan and Enphase Energy. The talent behind Claret Medical and Millipede came out of the Arterial Vascular Engineering / Medtronic operation in Santa Rosa. And, as mentioned, Ultragenyx was founded by a former BioMarin executive. It’s a strong bet that executives and employees from these 11 companies will be some of the local leaders who found the next generation of Marin + Sonoma startups - and we’re already working with many of them who are underway.
Zachary Kushel is Founder & Managing Partner of Marin Sonoma Impact Ventures.
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