9 Startup Factories Turning Technologies Into Awesome Companies

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These outfits are looking for a bit more skin in the startup game than just their money, or even an advisory seat on the board. They want to share in the contagious energy that surrounds a startup’s saga.

A new trend in the startup world and it goes by many names; Startup Factory, Venture Builder, Startup Studio, Venture Lab etc. These outfits are looking for a bit more skin in the startup game than just their money, or even an advisory seat on the board. They want to share in the contagious energy that surrounds a startup’s saga from idea creation through the launch phase and hopefully all the way to an exit.

This kind of sharing might take the form of helping with refining core ideas, can certainly involve funding and perhaps even include the adoption of a co-founder status. In all cases however, startup factories are looking to build and nurture new technologies into an actual startup.

Startup factories help their entrepreneurs build a core team, offering vast experience that can save a startup plenty of trouble down the road with having to learn the ins and outs of HR management the hard way.

The multiple teams working out of a single factory can leverage each other’s help as well, sharing resources beyond talent including processes, connections, funds, the things that standalone startups struggle to create and the things that every startup needs.

Whereas accelerators or incubators offer access to these resources, at startup factories they’re hands on by definition. Venture builders are trying to template the model as much as their various startups will allow. The more a factory focuses on a specific vertical, the more powerful the sharing becomes.

Lastly, factories work hard to ween their startups off of their help as soon as possible. After a startup’s initial launch, factories will work to create standalone teams and set the foundation for the startup to scale effectively and rapidly.  Many factories insist, in fact, that their startups move into their own office space as soon as possible and only approach the core team when there are notable challenges. If the startup can’t operate by itself, the venture builder has failed.

Here we look at 9 startup factories that are driving the model forward. For everything these factories share, the model still resists strict categorization and variations abound.

1. Expa

In March, 2004, Expa became a household name in the category when it raised $50M in their first funding round from the likes of Richard Branson, Meg Whitman, and Li Ka-shing.  That feat is easier when you’re Garrett Camp and you’re a co-founder of Uber and founding CEO of Stumbleupon.com. Expa is a textbook startup factory. As they describe themselves, they “develop products, systems and services, and then form teams to scale them as independent entities.” Though, for all the hubbub, we haven’t seen a product emerge yet.

2. The Monkey Interno

This is supposedly a real company. Thanks to personal funding from founders Michael Birch and Xochi Birch, who sold Bebo to AOL in 2008 for $850M, they have the wherewithal to “dream up cool internet projects, develop them, then nurture them into successful businesses.”  Like Expa, their “monkey magic” has yet to brew anything up yet, though in July, 2013 Michael bought back Bebo for a paltry sum of $1M with a plan to “re-invent” it.

3. HitFox Group

With a focus on adtech, fintech, and big data, HitFox Group calls itself a “platform for entrepreneurship. They identify high-growth markets and then build a cluster of companies in them. It turns out that diversifying your investment is a maxim that can also apply to a venture builder’s own startup profile. HitFox Group steadily starts 2-4 ventures each year and provides each of them with €.5-2M. As of 2013, they made around €15M in profits from a roster of companies that includes AppLift, Appiris, and Finleap.

4. Rocket Internet

Rocket Internet is a behemoth that has found itself in the venture builder camp unintentionally. Founded in 2007 with a mission to take successful models and transfer them to new, under served, or untapped markets, Rocket Internet has become a consummate startup factory. With three funding rounds totaling $452, they’ve invested in and built companies like ride-sharing platform Tripda, interior design showcase WestWing, and online shopping mall Lazada Group.

5. Science Inc.

Science Inc., led by former MySpace CEO Mike Jones, sees itself as a portfolio company that “creates, invests, acquires, and scales successful digital businesses.” With 2 funding rounds totaling $40M, Science Inc. has in its 3 years of operation built 14 operating companies and 12 portfolio companies in the mobile content, growth, and consumer spaces. Their startups include grooming product deliverer DollarShaveClub, pet boarding marketplace DogVacay, and social bookmarker Delicious.

6. eFounders

eFounders is a startup studio which exclusively builds SaaS companies. They’re also one of the bigger advocates of the startup factory model and outright declare, “eFounders is not an investment fund nor an incubator nor a group of mentors, but rather real builders of products…” Their projects include mention, Pressking, Mailjet, Textmaster, Aircall, and Front. Founded in 2011 by Thibaud Elziere and Quentin Nickmans, eFounders now aims to launch 3-4 projects per year with an undisclosed amount of funding.

7. Neverbland

Neverbland call themselves a startup studio or a “company that builds companies.” Those companies include Slate, a workflow tool for creative agencies, Conjure, a design feedback platform, and VOTD.tv, a daily awards platform for video. Founded by Sam Matthews, Neverbland seems to be cornering tools by and for the creative professionals that inhabit their offices in London, NYC, and Warsaw, but they’re also variously described as an incubator and design and build agency, so the verdict is still out.

8. Betaworks

Betaworks is a hyperactive startup studio that builds and invests widely. Founded in 2008 by serial entrepreneur John Borthwick, Betaworks describes its own business model quite simply, “a single company that owns larger pieces of the things it has built and smaller pieces of the things it has invested in.” Their roster of things they have built (or rebuilt) includes bitly, Digg, Giphy, Dots, and Instapaper. With three funding rounds totaling $47.5M, Betaworks was recently in the news when Giphy, a GIF discovery tool, raised a nice sum of $17M.

9. Obvious Corp.

Obvious Corp. is a startup studio with a bipolar but storied history. Blogger founder Ev Williams ramped it up until he came up with the idea of Twitter and then rolled it back down. After stepping down as CEO of Twitter, he’s ramped Obvious up again, and down again already, after founding blogging hit Medium. Already Obvious Corp fans are wondering about Chapter 3 in what’s expected to be a startup success trilogy.