Last year saw a record number of startups join the league of so-called unicorn companies, or privately held companies valued at more than $1 billion. (Venture capitalist Aileen Lee coined the term.) While the pace of new additions to that club slowed in the fourth quarter, you can still expect to see some strivers get horned in 2016, so to speak.

Venture capital research firm CB Insights, in partnership with The New York Times, created a list of 50 potential future unicorns back in August. Six members of the list have already become unicorns, including local services marketplace Thumbtack and cybersecurity company Okta.

As for companies expected to follow next in the footsteps of those six, CB Insights analyst Matt Wong has a handful of candidates in mind based on factors like revenue and money raised. Here's a breakdown of seven startups to watch as the new year gets under way.

Sonos

Field: Hardware

What it does: Makes wireless music systems that can be controlled by smartphone or tablet

Funding: $220 million raised

Investors: Index Ventures, e.ventures, Elevation Partners

What makes it competitive: Sonos has been around for a decade and is recognized as a leader in wireless sound systems. Its home audio system has given Samsung a run for its money. The startup recently projected $1 billion in run rate annual revenue, according to Wong.

Flatiron Health

Field: Health care

What it does: Flatiron's OncologyCloud platform aims to provide doctors, biosciences companies, and others with more and better organized data on cancer patients by aggregating and organizing data that might otherwise not be easily accessible

Funding: $313 million raised

Investors: First Round Capital, Google Ventures, SV Angel

What makes it competitive: Flatiron has jumped on what Forrester Research senior analyst Skip Snow once described to Fortune as a "seismic shift" toward medicine that's based on evidence and data. Doctors need tools to keep up with all the information that's out there, especially with diseases as complex as cancer. At least one pharmaceutical giant has taken notice of Flatiron, notes Wong. Roche recently led a $175 million investment round in the startup and is contracted to buy several of the growing company's software products.

Zuora

Field: Internet software and services

What it does: Provides subscription commerce and billing services

Funding: $243 million raised

Investors: Benchmark Capital, Northgate Capital, Tenaya Capital

What makes it competitive: Subscriptions aren't just for magazines anymore. You can subscribe to movie streaming, food, clothing, razors, even  toilet paper. If you can buy it, and you might want to buy it more than one time, you can probably get it delivered regularly or otherwise subscribe to it. Zuora helps companies convert their products and services to a subscription model.

Mixpanel

Field: Internet software and services

What it does: Real-time user activity analytics with a focus on mobile applications

Funding:  $77 million raised

Investors: Andreessen Horowitz, Sequoia Capital, Y Combinator

What makes it competitive: Mixpanel had an $865 million valuation back in December 2014, a detail Wong cites as a reason he thinks the company could soon become a unicorn. CEO Suhail Doshi told TechCrunch at the time of that valuation that what gave Mixpanel an edge was its early focus on mobile analytics over websites.

Cyanogen

Field: Mobile software and services

What it does: It's building a mobile operating system

Funding: $110 million raised

Investors: Twitter Ventures, Qualcomm Ventures, Benchmark Capital

What makes it competitive: One indicator that Cyanogen is worth watching, says Wong,  is that Google tried to acquire the startup a little over a year ago. Not everyone agrees that Cyanogen's CyanogenMod can compete as an alternative to Google's Android operating system, but apparently it's formidable enough that Google thought so. In recent news, Cyanogen announced it was embedding Microsoft's virtual personal assistant Cortana into CyanogenMod.

DigitalOcean

Field: Internet software and services

What it does: Provides cloud infrastructure for developers

Funding: $183 million raised

Investors: Andreessen Horowitz, IA Ventures, CrunchFund

What makes it competitive: DigitalOcean may be a lot smaller than other cloud infrastructure providers like Amazon and Google, but the startup still views itself as a competitor to those giants. According to sources like the Journal of Cloud Computing, the company more than holds its own. The larger providers "focus on the technical features, and what we focus on is--this is why were highly differentiated--is we're focused on people, and in this specific case, we're focused on developers," CEO Ben Uretsky told VentureBeat in late 2014.

3D Robotics

Field: Drones and satellites

What it does: Builds affordable unmanned aerial vehicles, i.e. drones

Funding: $99 million raised

Investors: Foundry Group, Maveron, Mayfield Fund

What makes it competitive: China's DJI is generally considered the leading consumer drone company, but Berkeley, California-based 3D Robotics, with its many former DJI employees, poses hot competition. Former Wired magazine editor and co-founder of the company Chris Anderson has said his company played a key role in kickstarting the increasingly widespread use of drones among domestic users. As the FDA warms up to the idea of these flying devices whirring around in the skies, 3D could be poised to become the face of American drone manufacturing. 

Published on: Jan 21, 2016