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Ask HN: Which startups are thriving in the downturn?

by roberja90 on 8/17/22, 10:44 AM with 114 comments

We have had nearly 6 months of economic gloom. Theres has been lots of hypothetical talk of who will win in these turbulent economic times.

Does anyone know of actual companies who have had some explosive growth in recent months?

  • by NickM on 8/17/22, 2:08 PM

    I find the whole "economic gloom" sentiment a bit odd. We're at extremely low unemployment, and GDP took a small dip in Q1/Q2 but is projected to start growing again in the second half of the year. The S&P 500 is down less than 10% from it's all-time high.

    Inflation was an issue for a while, but a lot of that seemed to be driven more by temporary supply constraints in certain sectors than any actual currency devaluation, and inflation already seems to be dying down anyway. The recent interest rate hikes also didn't seem to have nearly as much impact on the markets as everyone feared they would.

    What exactly is everyone so scared about that we all seem to think the economy is headed for a major recession?

  • by 0xfaded on 8/17/22, 2:46 PM

    I've been on the interview loop with robotics companies. Out of 20, only two had hiring on hold. Many were either already in a cash strong position or had cash strong backers who are long on robotics.

    I personally am long on robotics. The longer time horizon to market does mean ROI takes a hit in a high interest rate world. But I think the statement "the future will have more robots" is less controversial than some of the future scenarios that other companies are predicated upon.

  • by hoofhearted on 8/17/22, 1:14 PM

    I don’t know if you can count them as a startup still, but Vercel seems to be doing all the right things during this downturn.

    Connecting up GitHub and watching it runs tests, build, and deploy without much configuration was very gratifying for me. I haven’t felt that feeling towards a tech product in years. It was so simple and easy, the same feeling I felt the first time I used Uber. The same feeling as our first Stripe transaction, or when we launched a stack on AWS.

  • by colincooke on 8/17/22, 1:33 PM

    Less doing well because of the downturn, more doing well despite of it, but many players in climate tech are doing really really well lately (for example [1]). Longer term, with IRA [2] now law, the industry is poised to continue to grow faster and faster.

    [1] https://www.canarymedia.com/articles/climatetech-finance/inv... [2] https://www.canarymedia.com/articles/clean-energy/this-is-hu...

  • by kkielhofner on 8/17/22, 2:55 PM

    In the crypto ecosystem the compliance and anti-fraud space is doing very well (it's about time):

    https://techcrunch.com/2022/05/24/doppel-helps-nft-projects-...

    https://www.coindesk.com/business/2022/07/20/ai-based-startu...

    https://www.theblock.co/post/159791/center-raises-11-million

    Shameless plug - Doppel and Optic are direct competitors for what I've been building:

    https://fnftf.io/

    (We're the only solution that's publicly available).

    Not to mention the various Know Your Customer, mixer detectors, etc such as Chainalysis, TRM Labs, etc.

    I know crypto isn't popular on HN - given the amount of fraud, etc I've certainly jumped in here and elsewhere with plenty of comments and my thoughts elaborating on just how bad things are in the space (I do live and breathe it every day). My take is regardless of where you stand on crypto we should all be able to get behind solutions that are trying to clean up the space. Fact is it is here and (little) people are getting ripped off and scammed left and right.

    On a side note (and probably worthy of an Ask HN) I've been self funding Tovera for a year and we have yet to land any investment after six months of trying and hundreds of hours (minimum) spent on the effort. Plenty to be said about the good and bad of where we are and how my motivation and mental health is doing. Our three direct competitors are all technically inferior and well behind us yet combined they've raised $27m... Classic story of the value of vision, pitch, and salesmanship vs tech.

  • by Taylor_OD on 8/17/22, 3:26 PM

    Traditionally companies involved with gambling do VERY well during recessions. It's not really an industry I want to be in but a lot of folks I knew who worked on or build slot machines/slot machine tech got huge bonuses during the last 08-10 years.

    Plenty of smaller companies in that space if you look for them.

  • by kube-system on 8/17/22, 2:34 PM

    The availability of cheap and easy debt is the main thing that has changed in this economy. Startups that don't rely on debt for financing are still doing fine.

  • by linseed_213 on 8/17/22, 1:08 PM

    With the drop in VC checks being written and overall interest rates, I'd expect revenue-based financing to have a good year.

    Pipe, Arc.tech, etc.

  • by baby on 8/17/22, 2:18 PM

    Or better: which companies do you think will survive and continue to go strong as they exit the downturn (however long it is). I’m still long Meta, Airbnb, Uber, Netflix, etc.

  • by rvz on 8/17/22, 1:53 PM

    FTX exchange seems to be going great and doing fine. Tons of revenue, very low head count and lots of cash at their disposal. So much, that they are offering to take over other failing startups affected by the downturn.

    That is a sign of a company that will survive in the long term since they are thriving even in these conditions.

  • by lmeyerov on 8/17/22, 4:11 PM

    We and our peers have been busy:

    - Gov, especially cyber + analytics (we do graph ai + gpu viz stuff)

    - Supply chain: A slowdown is happening, but COVID, regional conflicts, etc. makes needs for manufacturing etc. companies here super burning

    - Cyber + fraud: The need hasn't gone away (more automated attacks every day!), though companies based around VC blitz and pushing their gaping tech + operational holes to acquirers are hurting as fewer people happy to give them free $

    - Devops was hard and remains hard. Digital transformation is an ongoing process and still needs a lot of help.

  • by noodle on 8/17/22, 1:53 PM

    SMB SaaS seems to be doing just fine.

  • by zxexz on 8/17/22, 2:30 PM

    I work in the healthcare technology/interoperability space. A ton of startups here don’t seem to be affected. The one I work for is certainly thriving.

  • by leviathant on 8/17/22, 4:22 PM

    commercetools is seeing incredible growth, and it's only going to become more prominent in the ecommerce space.

    Having worked in ecommerce for a while now, I noticed back in 2008 that ecommerce flourishes when the economy goes sour. It's not strictly recession-proof- during the economic disruption, you will see separation of the wheat and the chaff, but new ecommerce technology that works gets supercharged.

    A decade and a half ago saw the emergence of Magento, BigCommerce, and while Demandware (based on Intershop) had been around for a bit, they emerged from the recession with afterburners on full blast. Shopify would hit stride later, eating into Magento and Demandware's lunch around the time they each got bought up for billions of dollars by Adobe and Salesforce, respectively.

    There were plenty of companies in the space that fell apart during the great recession too, but their talent moved on to the dominating players. You're seeing that happen during the last couple of years too. There have been some infamously rapid collapses - the implosion of Fast, Shopify's stock prices making a rapid return to normalcy. I strongly suspect you'll see other VC-backed 'disruptors' in the space fall apart. A newer 'headless' platform that talks a big talk recently put out a press release trumpeting a new deal that comically only listed former customers in the name-drop brag section of a press release, not a great look when you're the new kid on the block.

    Commercetools is where enterprise companies go to get away from legacy ecommerce platforms like Oracle (RIP), Salesforce, SAP Hybris, and homegrown systems - but in the last year it has also increasingly brought on graduates from the Shopify Plus and BigCommerce ecosystems.

  • by skrtskrt on 8/17/22, 2:58 PM

    Anyone who’s offering good product at a cheaper price point than the tech companies that got bloated over the last 5 or so years (Twilio comes to mind)

  • by Sohcahtoa82 on 8/17/22, 5:16 PM

    Shameless plug:

    The startup I work for, Vivun, 4X'd our ARR over the course of our latest fiscal year and received a $75M Series C funding in May.

    https://techcrunch.com/2022/05/17/vivun-is-digitizing-pre-sa...

  • by taylorhou on 8/17/22, 2:38 PM

    proptech is continuing to thrive. people need a roof over their heads whether it's to rent or own so startups solving problems surrounding renting/buying/managing/living in a home, apartment, condo, association, trailer, mobile park, co-op, furnished, short term, etc... will continue to thrive.

    btw, if anyone reading on HN is interested in joining a startup tackling the property management angle, hmu! my company helps manage 200k+ rental units across america and always interested in capable and enthusiastic folks to join.

  • by avgDev on 8/17/22, 2:27 PM

    I'm currently interviewing at a battery startup.

    Considering the current policies it seems like those companies should remain well funded for foreseeable future.

  • by mycall on 8/17/22, 1:54 PM

    Anyone getting rich off Federal funds.

  • by unixhero on 8/17/22, 2:52 PM

    This is not a downturn.

  • by jacob_rezi on 8/17/22, 1:34 PM

    We have been growing like crazy - https://rezi.ai/