$1 Billion In Under 5 Years: 12 Hot Tech Startups

[CORRECTED: Results have been re-ordered to reflect a corrected valuation for Nutanix.]

For a select group of innovative tech startups, 2014 was a very good year. Venture capitalists were lining up to pour money into companies with buzzed-about technology.

In its recently released 2015 Tech IPO Pipeline report, research firm CB Insights found 42 privately held companies considered possibilities for a 2015 IPO had raised venture financing this year at an estimated valuation of at least $1 billion. That compares to just 25 startups that hit the $1 billion mark in 2013.

What's even more interesting is the tender age of many of the startups that made it into the $1 billion club in 2014. Where it once took decades to build a company that's worth $1 billion, a dozen of this year's crop of 42 accomplished the feat in 5 years or less. One made it to $1 billion valuation in under two years.

What do these red-hot tech companies have that the rest of the tech-startup wannabes don't? In many cases, it's a founding team with a solid-gold track record, or executive experience at the biggest names in online tech. If you’re looking to get into this club, the path looks similar to the famed road to Carnegie Hall: practice. In this case, in online business and entrepreneurship.

Here's a look at the 12 youngest startups that joined the $1 billion club in 2014, ranked by estimated or actual valuation (fundraising data via Crunchbase):

1. Über ($40B) -- There's nothing like completely upending an industry -- in this case, taxis -- to get investors excited. With smartphone technology that potentially turns every car owner into a cabbie, 5-year-old Über now operates in over 200 cities, far outstripping its rivals Lyft and Sidecar. The all-star lineup of investors, who've put in $3.3 billion to date, include Chinese website Baidu , which put in $600 million this month. Earlier investors include Amazon's Jeff Bezos, Google Ventures, Kleiner Perkins Caufield & Byers, and Goldman Sachs, to name just a few. Co-founder Travis Kalanick previously sold his startup Red Swoosh to Akamai Technologies in 2007.
2. Square ($6B) -- There's no doubt that the previous Twitter success of co-founder Jack Dorsey helped Square attract investors' attention. An early mover in enabling smartphone payments, Square has raised over $590 million in its 5-year history. Investors who came on board this year include GGV Capital and the government of Singapore's investment arm. Morgan Stanley, Goldman Sachs, and JP Morgan Chase & Co., Barclays Capital, and Silicon Valley Bank teamed up to offer Square a $100 million debt facility in April.
3. Pinterest ($5B) -- Famed for raising most of its $762 million in venture capital before it made any money, Pinterest finally rolled out a revenue model -- Promoted Pins -- in May, 4 years after the visual social-media platform launched. True believers in the future potential of monetizing the heavily female Pinterest audience include Andreesen Horowitz, Bessemer Venture Partners, FirstMark Capital, and Fidelity Investments. Co-founders Ben Silberman and Evan Sharp did time at Google and Facebook, respectively.
4. Stripe ($3.5B) -- An online payment-enabler for Apple and others, Stripe is a Y-Combinator incubator grad. It's raised $190 million in its four years of existence -- a paltry amount compared to the others above, but at an impressive valuation. Investors in its most recent funding round earlier this month include Khosla Ventures and Sequoia Capital. Co-founder-brothers John and Patrick Collison sold previous startup Auctomatic to Live Current Media in 2008.
5. Pure Storage ($3B) -- Keeping the world's growing array of data centers humming affordably is big business for enterprise-storage startup Pure, which has raised nearly $475 million. One of the dominant “Flash Only Array” purveyors, Pure boasts former Veritas Software engineer John Colgrove and former Yahoo! chief technologist John Hayes as co-founders. Founded in 2009, Pure most recently raised $60 million in private equity this summer, from T. Rowe Price, Wellington Management, and Tiger Global Management. Last week, Pure had tech-watchers buzzing about the potential of its new Flashstack CI system, which integrates with VMware and Cisco products.
6. Houzz ($2.3B) -- This 5-year-old, home-improvement design and hiring platform has raised over $213 million. The bulk of the money came in a series D round this past October that included GGV, Kleiner Perkins, T. Rowe Price, Sequoia, and many others. Co-founder Alon Cohen is a former eBay engineer.
7. Nutanix ($2B) — With over $312 million raised, 5-year-old Nutanix is a mover in the virtualized datacenter space. Top investors include Lightspeed Venture Partners and Khosla. Co-founders Dheeraj Pandey and Ajeet Singh are former Oracle execs, and Mohit Aron was a Google developer.
8. Tango ($1.5B) — With nearly $370 million raised in all, 5-year-old Skype challenger Tango most recently got $280 million from Alibaba in March. Co-founder Uri Raz previously founded Appstream, which sold to Symantec in 2006, among others. Along with Tango co-founder Eric Setton, Raz also co-founded video-streaming firm Dyyno.
9. Slack ($1.12B) — The company formerly known as Tiny Speck shot to its $1B+ valuation in under two years. Impressive for a simple, real-time tool for messaging, archiving, and search — but not entirely shocking, since one of the co-founders, Stewart Butterfield, previously co-founded Flickr. The $180 million Slack’s raised to date comes from investors including Andreessen, Google, Kleiner Perkins, Accel Partners, Slow Ventures, and The Social+Capital Partnership. The company is courting controversy with its new feature that lets employers spy on workers’ messages via the app, while others wonder if Slack could be the app that kills email.
10. Actifio ($1.1B) -- There's already IPO buzz about advanced data-management firm Actifio, which earlier this month beefed up its management by hiring former LogMeIn CFO Jim Kelliher as chief financial officer. The 5-year-old startup has raised over $207 million, fueled by the perception that it is eating archival EMC’s lunch. Actifio raised $100 million of its funding in March, when early investors Andreessen Horowitz, Greylock Partners Israel, Advanced Technology Ventures, and Technology Crossover Ventures all re-upped. Founder Ash Ashutosh previously started AppIQ, which HP bought in 2005, among others.
11. CloudFlare ($1B) — A star in the booming security and Web-performance niche, 5-year-old CloudFlare has raised over $72 million, and recently announced its expansion into China. Co-founder Michelle Zatlyn is a former Google and Toshiba exec who also founded two startups. Investors include Venrock, Pelion Venture Partners, and New Enterprise Associates.
12. Justfab ($1B) — The 4-year-old, fast-fashion website has raised $254 million for its membership-based shopping model. Co-founders Don Ressler and Adam Goldenberg have a ton of entrepreneurial experience, beginning when Goldenberg sold his startup Gamers Alliance to Intermix Media at age 18. The pair met when Ressler sold his company FitnessHeaven to Intermix in 2001. Justfab investors include Technology Crossover Ventures and Matrix Partners. It’s clearly a creative team, beyond the founders, too — president and creative director Kimora Lee Simmons just launched her own fashion line.

Venture-capital firms are high on these companies -- but do the startups have what it takes to fulfill that potential? Time will tell which of these truly deserve a $1 billion valuation or more, and which will prove a bust.

For instance, fast-changing social media fans could always drift away from Pinterest and on to the next hot thing, such as Tsu, which pays participants for sharing. And Uber could implode, as soon as one fare turns up murdered (there’s already been more than one rape). It’s already seen pushback to its model in Asia, and has growing tax and insurance problems.

All these startups operate in tech areas with a ton of competition, and anything can -- and frequently, does -- happen in the fast-moving world of startups. Square was dropped by Starbucks this week, for instance. We’ll see if the early mover can keep its advantage, or if it’ll be outstripped by PayPal's competing PayPal Here offering, or other mobile-pay competitors.

Which of these $1 billion startups will be around five years from now? Leave a comment and tell us your prediction.