227 companies based in the Triangle appear on the 2021 Triangle Tweener list, released by Scot Wingo, the founder and former CEO of ChannelAdvisor and the co-founder of Get Spiffy, Inc, this morning, and nearly one third of them are new arrivals to the list.

A Triangle-based “Tweener” is a technology company—no consultancies, no agencies, no life science companies—that’s in between their early stage and becoming an established company.

“Think of Triangle Tweeners as the ‘Goldilocks’ companies in the Triangle—not too small and not too large,” said Wingo describing those that make the 2021 list according to his criteria.  “These are our future breakouts, big fund-raisers, acquisition targets and (fingers crossed) IPOs.”

In order to appear on the list, the company must generate more than $1 million in sales revenue per year, or employ 10 people as full-time employees, and according to Wingo, a company will “graduate” from the list once they’re reached $80 million in sales or 500 employees.

This year—2020—was an incredibly challenging year for startups and founders, including Wingo, he said.  The global pandemic was a contributing factor to “this really weird bi-furcated situation,” said Wingo.  On one hand, the pandemic caused gigantic verticals in the economy to be wiped nearly completely out, including travel, restaurants, bands and music, and sports.  But on the other hand, any company that digitized and simplified tasks that would otherwise have been done in-person, or companies that specialized in home-based services or delivery surged in response to the shift in the economy toward remote-work and people spending a lot more time—and often, money—at and on their home.

 

Which Triangle tech companies joined “Tweener” list this year?

 

Tweener trends

Six companies from the prior Triangle Tweener list experienced an exit, and the total amount of invested capital in Tweener companies in 2020 was down 54% compared to the prior year, found Wingo, noting that the prior year saw four mega-deals with Pendo bringing in $100 million, Spreedly adding $75 million, CloudFactory pulling in $65 million, and ArchiveSocial attracting $53 million, accounting for more than half of that year’s total invested capital.

Companies and potential investors also experienced a major disruption in fundraising cycles due to the onset of the global coronavirus pandemic, but by the end of the year, said Wingo, there was a more distributed set of investments and many $1-$2 million investments in early stage companies rather than mega deals.  In total, Wingo found that Tweeners raised about $200 million in 2020.

Yet those metrics aren’t what Wingo thinks to be most important in measuring the health of the Tweener economy—even during a pandemic year, the growth of early-stage companies across sectors that pulled them into Tweener status, was 29 percent year over year.

“We saw a record increase of Teeners this year,” said Wingo.  “To me that shows that this stage of the pipeline is growing really healthily—companies are coming up out of the startup primordial soup and getting into the Tweener stage.”

That bodes quite well for the future of the entrepreneurial economy of the Triangle, said Wingo, noting that it’s never been healthier than it is at this moment in time.

“We have tons of capital flowing into the category, we have lots of great new startups coming in the top of the funnel,” he said. “We’re setting up for an amazing 2021 and 2020s decade for Triangle Tweeners and our overall Triangle entrepreneurial ecosystem.”

 

Off-list: the exits and the closures

Six Tweeners exited in 2020, found Wingo, though financial details on the acquisitions were only released for one deal, making comparisons to prior years difficult.  The Tweeners who have exited off the Triangle Tweener list are:

  • Growers Holdings, a Triangle-born agtech company, was acquired by the Isreali-based company ICL in February.
  • icimo LLC was acquired by the accounting firm Cherry Bekaert in February
  • Academic Benchmarking Consortium was acquired by HelloCampus in September.
  • Mindsumo was acquired by MBO Partners in September.
  • RewardStock was acquired by Experian in October.
  • ShiftWizard was acquired by HealthStream for $32 million in October.

 

Two companies fell out of the Tweener list due to closures, or changes in their structure.  Carousel was folded into the startup’s parent company, Ignite Social Media, and Silbo, which provided a marketplace for referees, shuttered operations in 2020 due to the coronavirus pandemic’s impact on youth sports.

No companies “graduated” from the list due to surpassing sales or employee targets.