Venture capital investors are becoming increasingly bullish on startups helping businesses test their Web, mobile and desktop apps.
Over the past four quarters, testing startups have raised $162M across 46 deals. Of note, Q1 2014 saw a five-year high in quarterly funding behind a $43M round to mobile app testing platform Applause, led by Goldman Sachs. On a year-over-year basis, VC funding to web and mobile testing startups grew 71% while deal activity jumped by over 87%.
Testing VC Financing Trend – By Stage
As VCs warm up to new testing platforms and technologies, the past two years have seen a proliferation of seed deals in the testing space. In fact, seed deals have captured the majority of venture deals in the over the past two years at 57%. Another 20% of deals have come at the Series A stage. A cross-section of testing startups that raised early stage funding since the start of 2013 are highlighted below – including several backed by prominent VCs including Google Ventures and Andreessen Horowitz.
- Appurify – Automated testing and performance optimization for mobile apps backed by Felicis Ventures, Google Ventures and Foundation Capital
- Kaizen Platform – Crowdsourced A/B testing service backed by Fidelity Growth and GREE Ventures
- Apptimize– Mobile A/B testing backed by Google Ventures, Andreessen Horowitz and Maverick Capital
- Testbirds – Mobile and web app crowdtesting backed by Seventure Partners
- Runscope – Automated testing for APIs and backend platforms backed by Andreessen Horowitz, Lerer Ventures and True Ventures
While early-stage activity makes up over 3/4ths of testing deals over the past eight quarters, average VC deal sizes in the space have risen behind a handful of well-funded companies as highlighted in the chart below. Notable deals in 2013 including Optimizely’s $28M Series B led by Benchmark Capital and Soasta’s $30M Series E from investors including Macquarie Capital, Canaan Partners and ROTH Capital while Applause’s Series E round is responsible for the notable jump in avg. Q1 2014 deal size.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
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