Christmas has come early for many business school entrepreneurs. As students shun banks and consultancies for start-ups, the best and brightest are enjoying sky-high valuations, public listings, and billions of dollars raised in venture capital.
Below, we take a look at 10 of the hottest VC-backed start-ups founded by MBA graduates.
(Capital Raised) $770M
Christmas is a good time for Marc Lore. The Wharton MBA’s e-commerce website Jet.com can expect an influx of Xmas shoppers. Founded in 2013, the site already has one million users. It has been able to lure consumers away from competitors like Amazon, Walmart and Target with low prices.
Jet.com last month raised $350 million, valuating the company at $1.5 billion. “Our hard work continues to pay off,” Marc says. Investors include Fidelity, Alibaba and Google Ventures.
Harvard Business School
GrabTaxi is taking on Uber: the start-up offers location-based smartphone booking of taxis in southeast Asia. Anthony Tan set-up the company the same year he graduated from Harvard, in 2011. GrabTaxi said this year it had 620,000 monthly active users; it takes seven bookings every second.
The Malaysia based business recently raised $350 million in VC funds from backers including SoftBank, the Japanese tech group. It is valued at $1.5 billion.
“This investment is not only a statement on GrabTaxi’s dominance in the region, but also the growth potential of southeast Asia on a global level,” says Anthony, CEO.
Daniel Macklin is on a path of disruption. His online student loans provider SoFi is edging into banks’ territory, already surpassing $6 billion in loans funded to 90,000 users in just four years of existence.
“By definition we are disrupting,” he says. “We are doing things in a different way.”
The Stanford graduate founded SoFi with a quad of classmates in 2011. It has grown substantially since then: the Silicon Valley based start-up has about 500 employees. The company recently raised a staggering $1 billion in venture capital, led by investors SoftBank and Third Point Ventures.
A decade ago Tao Zhang left Wharton with an MBA. He has certainly put it to good use. He founded Dianping.com in 2003 and, over 12 years, has built one of China’s leading mobile internet companies.
Dianping.com operates in the online-to-offline (O2O) marketplace, offering for example group-buying, online restaurant reservation, take-out service, and e-coupon promotions.
The company has nearly 75 million monthly active users. It has raised about $1 billion. It recently announced a merger with Meituan.com, which would value both firms at about $15 billion. “We both recognize the enormous potential of China’s O2O industry,” Tao said at the time.
Kellogg School of Management
Three years after Maximilian Bittner left Kellogg School of Management, he founded Lazada, in 2012. Flash forward to 2015 and the company is southeast Asia’s fastest-growing online department store. It focuses on selling electronics and toys, among other general items. As of June, the Kuala Lumpur headquartered company had 1.4 million active customers, but further growth abounds.
“The e-commerce market in southeast Asia is still in its early days,” says Maximilian.
Lazada is fresh out of a $250 million funding round, led by Temasek Holdings, the Singapore state investment company.
Oscar Health Insurance
Oscar is focused on utilizing technology and data to “humanize healthcare”. Setup by chief executive and Harvard MBA Mario Schlosser, the company’s co-founders grew sick of the US’ creaking healthcare system and decided to do something about it.
Unlike most large insurance providers, Oscar is focused on signing up individuals, rather than employers. Its 100,000 customers pay $5,000 per year on average. Oscar raised $32 million in September from Google Ventures, valuating it at $1.7 billion.
“We have a smaller tech team than anybody else in healthcare,” Mario told the Financial Times recently. “[But] we have much grander ambitions in the technology we want to build to rewire the healthcare system.”
MIT Sloan School of Management
Cloud computing group Okta is battling market leaders like Microsoft and VMWare. The San Francisco-based start-up provides cloud software that ties together the myriad applications that enterprises and employees use.
Founded in 2009, the company has already landed big name clients like LinkedIn, and has raised around $230 million. The latest funding round was led by investors including Andreessen Horowitz, the Bay Area venture capital firm that backed Facebook. It is valued at $1.2 billion.
Frederic Kerrest, co-founder and COO, who studied for an MBA at MIT Sloan, says Okta’s advantage over larger rivals is its “laser focus” on cloud solutions.
“Okta’s business isn’t distracted by having to sell the kit and caboodle,” he says.
London Business School
“We are offering money transfers fit for the 21st century,” he says. “It’s absurd that with all the advances we’ve had in global communication, remittance companies should still expect their customers to physically withdraw cash.”
Founded in 2010, the online money transfer business in February raised $100 million from investors including Silicon Valley’s Accel Partners, giving it a valuation of $500 million. Annual revenues grew from £73,000 in 2011 to £15 million in 2014.
Columbia Business School
For Jonathan Stein, there was no time like the present. The entrepreneur set-up Betterment while still studying for an MBA at Columbia Business School, in 2008.
The online investment company delivers personalized financial advice paired with low fees. Betterment manages $3 billion in assets. It has attracted 120,000 clients, particularly younger investors, away from traditional firms with mobile apps and automated tools that allocate portfolios to maximize gains.
“We have lower costs, we give better advice, [and] we have a better user experience,” Jonathan told Fortune this month.
Based in New York, the “roboadviser” has secured about $100 million in venture capital.
Taavet Hinrikus is not fond of banks. When he and Kristo Käärmann launched TransferWise in 2010, they joined the slew of start-ups taking on the large lenders.
“Banks, brokers and others take advantage of customers by hiding the real cost of international transactions,” says Taavet, who graduated from INSEAD the same year.
Since then Transferwise has grown to become of the UK’s most successful fintech startups. It has raised $91 million in funding from investors such as Andreessen Horowitz, Sir Richard Branson, and Peter Thiel and Max Levchin, the co-founders of PayPal. Transferwise users send and receive more than £500 million a month.