The Top 5 SF Tech Sectors to Watch in 2022
It’s no secret that plenty of tech giants choose to call Silicon Valley home. Companies like Google, Apple and Twitter have their roots firmly planted amidst the fog of the Bay Area. But Silicon Valley is also home to plenty of startups both big and small that are worth watching.
This year, a flurry of investments poured into a variety of tech sectors, some of which might surprise you. The HR tech and proptech industries, for example, witnessed outstanding levels of growth and received plenty of renewed interest from investors. Leaders in these industries and more have big plans for next year. If this year’s trends are any indication, investments will continue to pour in for them too. These are SF’s top tech sectors to watch in 2022.
This year, companies across the U.S. and around the world continued to seek out virtual solutions to adapt to the new normal of remote work. HR teams specifically, sought out new ways to recruit and onboard new employees. Numerous HR tech platforms, a handful of which are headquartered in the Bay Area, raised massive amounts of capital as a result.
Checkr, for example, leverages its proprietary AI to process employee background checks for a number of tech giants including Lyft, Instacart, Netflix and Airbnb. In September, the unicorn grabbed $250 million in a Series E round that sent its valuation skyrocketing to a whopping $4.6 billion. Another Bay Area-based HR tech platform, Lattice, also won big. The company solidified its status as a unicorn following a $60 million in a Series E financing round back in March.
The remote work era has also highlighted a greater need for compensation transparency. SF-based HR tech platform Pave is looking to arm companies with enough info to make more fair compensation decisions. Its platform leverages real-time data in order to keep companies informed on the ever-evolving labor market. In August, the company raised $46 million in a Series B round which sent its valuation soaring to $400 million.
Recruiting and onboarding are some of the most critical parts of the talent lifecycle, just ask Sense. The company is on a mission to help recruiting teams hire talent fast and at scale with its AI-powered platform. The startup recently grabbed $50 million in a Series D round led by SoftBank Vision Fund 2. The raise brought the growing company’s valuation to $500 million.
The shift to online banking started long before the pandemic, but over the last two years that shift has rapidly accelerated. As a result, fintech companies big and small have continued to raise massive amounts of capital in order to fuel the expansion of their digital banking services. One such company, Chime, raised over $1 billion in funding this year. In August, the decacorn grabbed $750 million in a funding round led by Sequoia. The huge round sent Chime’s valuation soaring to $25 billion.
Another Bay Area-based fintech giant, Varo Bank, closed two rounds this year. In February, the company grabbed $63 million in fresh financing. Seven months later, in September, the company raised an additional $510 million. The cash flow doesn’t stop there. Payments giant Bolt, which had a financially busy 2020, kept the momentum going well into 2021. The one-click checkout unicorn raised $393 million in a financing round back in October.
Fintech companies that cater to the needs of freelancers won big this year, perhaps in part due to the “Great Resignation.” HoneyBook is one such example, the company operates as a client management and financial platform for both freelancers and small business owners. In November, HoneyBook grabbed $250 million in a Series E round led by Tiger Global Management.
This one might come as a shocker, but the healthtech sector has seen a huge uptick in growth over the course of the pandemic. Hospitals across the country and around the world have rushed to further digitize their health services in order to deal with a much larger pool of patients. This has no doubt led to the speedy growth of several healthtech startups.
San Mateo-based patient engagement platform Luma Health is one such startup. Luma’s platform aims to both centralize and automate scheduling and communication with patients. The company’s nearly 900 percent growth over the last three years earned it a spot on the latest Inc. 5000 list of the fastest-growing private companies in the U.S. Clearly investors are taking notice, the company brought in $130 million in a Series C round back in November.
A few other Bay Area-based healthtech companies, including Honor and Hinge Health, raised significant amounts of capital this year. In October, Honor solidified its status as a unicorn following its $370 million Series E. The round consisted of $70 million in equity financing and $300 million in debt financing. Hinge Health on the other hand, raised $400 million in a Series E at a stunning valuation of $6.2 billion. With the pandemic set to stretch into next year, the healthtech sector is definitely one to watch.
Despite what a certain Netflix series might tell you, tall blonde models can’t sell a home on looks alone. Like other realtors, they oftentimes have to work with multiple parties in order to go into escrow. The constraints of the pandemic have made this process a bit slower but luckily a bevy of Bay Area-based proptech startups are popping up to help speed things along.
One such startup is Snapdocs. The company’s AI-enabled tech connects lenders, settlement services and borrowers on one platform in order to digitize the closing process. Its tech has proven to be useful, the company has been experiencing record amounts of growth according to Snapdocs’ CEO Aaron King. The unicorn got its horn earlier this year following its $150 million Series D.
Another Bay Area-based proptech startup, Side, secured its status as a unicorn with an identical $150 million Series D round back in March. Just three months later Side grabbed an additional $50 million and nearly doubled its valuation to $2.5 billion.
Meanwhile Pacaso, a proptech startup founded by two former Zillow executives, also earned its horn following a $75 million raise back in March. Several months later, the unicorn raised $125 million in a Series C round, bumping its valuation to $1.5 billion. With the arrival of several new unicorns in the proptech space this year, there’s no question why it’s one of the top tech sectors to watch in 2022.
In-person shopping opportunities have continued to shrink over the last two years. Many small businesses have struggled to bounce back following a year of quarantine measures and lockdown procedures. As a result, consumers continued to turn to online retailers in order to have their needs met. The increasing popularity of online shopping has unfortunately led to supply chain issues in the U.S. and abroad.
As the pandemic stretches on into 2022, the online shopping craze is expected to continue. So it’s no surprise then that there are a ton of startups innovating in this space, rising to solve delivery issues for companies big and small.
One such startup is Shippo. The company more than doubled total shipping spend on its platform in 2020. That growth continued in 2022, and the company grabbed $45 million in fresh financing as a result. Another logistics startup, KeepTruckin, grabbed $190 million in a Series E to respond to a sharp uptick in demand. The raise, led by G2 Venture Partners, brought the unicorn’s valuation to $2 billion.
Meanwhile Deliverr grabbed $250 million to bring its next-day fulfillment capabilities to more small businesses. Following the massive Series E round, the company’s valuation hit the $2 billion mark as well. Across the bay in Berkeley, app building platform Anyscale got its horn following a $100 million Series C. The company’s tech is used to scale AI workloads that typically require distributed execution across multiple machines. Since most manufacturers rely on AI to keep their operations running smoothly, the company’s tech could provide extra assistance.
Innovation is abundant across the proptech spectrum and its clear Bay Area companies are at the forefront. With the birth of several unicorns in the proptech space this year, there’s no doubt its one of SF’s top tech sectors to watch in 2022.