These Four Tech Unicorns Could Reshape Their Industries

Are we in the midst of a tech bubble, one that's headed for a dot-bomb-type crash?

FORBES crunched the numbers and answered with an emphatic "no." Sure, some of the 140 unicorns globally -- the private tech companies valued at more than $1 billion -- may be overvalued. That's true in any portfolio. But most unicorns are backed by solid business models and healthy balance sheets. Many are poised to revolutionized their industries. Here are four that are disrupting digital commerce, human resources, business intelligence and customer experience.

Stripe

CEO Patrick Collison

Founded 2010

Value: $5 billion as of July 2015

Since Patrick Collison founded Stripe with his brother John in 2010, it has become one of the hottest destinations for tech talent in San Francisco. Despite a modest sales and marketing team of just 20 people, Stripe has a payments infrastructure that is already helping hundreds of thousands of businesses process billions in transactions every year. Its customers include fast-growing companies like Lyft, Kickstarter and  Twitter  and established giants like Salesforce and Rackspace. Stripe has also woven its technology into some of the ubiquitous digital commerce services like  Apple  Pay and Alipay. "The market is so large," says Collison. "There are very few businesses that don't move money around online in some capacity or another. It's not the valuation that's so surprising but that it's possible to build businesses of such scale so quickly."

Zenefits

CEO Parker Conrad

Founded 2013

Value: $4.5 billion as of May 2015

Zenefits came up with a clever "freemium" business model to hijack the sleepy h.r. management software business. Give companies a free online service for easily managing their employees and worker benefits, and take a commission any time an employee signs up for something that plugs into it. Health insurance commissions are currently generating the vast majority of Zenefits' revenue, but it gets a cut of payroll administration, commuter benefits, retirement plans, stock options and other ancillary services. The company is quickly reshaping the business of selling insurance and other h.r. services to small businesses, which employ roughly half of the U.S. workforce. Just as Expedia and Travelocity replaced travel agents, Zenefits is replacing thousands of small, fax-machine-powered insurance brokers with an automated service that saves its customers countless hours of administrative work. Well over 10,000 businesses with anywhere from 2 to 1,000 employees have signed up. It's a big number but a sliver of the millions of small and midsize businesses in the United States. "What we do is much broader than insurance," says Parker Conrad. "We are trying to be the system of record for employee information. It really becomes an operating system for the business."

Domo

CEO Josh James

Founded 2010

Value: $2 billion as of April 2015

Josh James knows plenty about running a business in a bubble. He started his first unicorn, Omniture, in 1996. At the height of the dot-com frenzy he received offers for the company simply based on the number of engineers it employed. James' refusal to sell proved prescient. He took Omniture public in 2006 and sold it to Adobe for $1.8 billion three years later. Investors in Domo, a Web-based business intelligence and analytics service, are more hard-nosed about scrutinizing its metrics but get the economics of software-as-a-service, James says. "People understand the model," he says. Since launching in 2012, Domo has been doubling every year, and it expects to pass $100 million in revenue in 2016. Most Domo customers, which include GE, Nissan and MasterCard, not only stay but increase their spending by 170% in the second year. The key to weathering any downturn, James says, is a healthy balance sheet. Domo has raised more than $450 million from investors. "If you don't have enough cash to get to break-even, you don't control your destiny," James says. "We have enough cash to get us to break-even."

Medallia

CEO Borge Hald, President Amy Pressman

Founded 2001

Value: $1.25 billion as of July 2015

Medallia survived two popped bubbles (dot-com and credit crisis) over its 14-year "overnight success." While there are plenty of companies battling it out in the customer relationship management (CRM) space, the Palo Alto company deals in "customer experience," providing a platform of surveys, text analytics and social media tools for businesses to track what their customers are really thinking and saying. That enables clients like Hilton to understand how a customer felt about that new mattress or Delta to see when fliers aren't enjoying their delays (and are angrily tweeting about it). In a world where all brands are focused on being "customer-centric," more than 500 companies swear by Medallia, whose average annual contract runs in the seven figures. Says President Amy Pressman, who cofounded the company with her husband, Borge Hald: "A lot of companies are afraid that they're going to be blindsided by something that's there in plain view, but they're so overwhelmed with data." Sequoia Capital partner Doug Leone cold-called the company in 2011 and was in its offices 24 hours later discussing deal terms. "In 2015 every single company says they're 'customer-centric.' " Medallia has raised more than $250 million to date, the majority of which comes from Sequoia. --Ryan Mac