Tech’s best new ideas are not from California

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The 2019 CNBC Disruptor 50 list comes at a moment of change for Silicon Valley, highlighted by the fact that an agricultural technology company, Indigo Ag, with a focus on feeding the planet, is No. 1 on the list. And for the first time in the seven-year history of the Disruptor list, the majority of the companies come from outside California.

This year more than ever we’re seeing technology infiltrate and transform every sector of our society. Tech’s dramatic impact is spreading far beyond Silicon Valley, with the Internet of things allowing new companies to thrive by offering ways to make sense of all the data that’s constantly collected, and to use that data to make businesses more efficient and profitable.

Eight of last year’s Disruptor 50 companies have “graduated.” Two were purchased — GitHub by Microsoft and Auris Health by Johnson & Johnson. Six have gone public — though with some stumbles out of the starting gates — most notably Uber and Lyft.

As those past Disruptors, which are defined by their use of smartphones and the cloud, become public giants, we’re seeing a handful of new technologies drive change, led by machine learning and artificial intelligence, both leveraged by well over half of this year’s list.

As incumbents embrace technologies themselves, we’re seeing these start-ups adapt more quickly than ever to the quickly-shifting landscape and add new businesses to diversify their revenue streams.

Disruptor key technologies

We asked the companies that made the list to share which technologies are core to their business.

Machine Learning was the most popular, with 36 companies pointing to its crucial role. Artificial intelligence came in second, with 29 companies naming it as key to their business, followed by cloud computing with 14 companies.

Seven companies say the Internet of things is key, including The We Company and Opendoor.

Five companies point to deep neural networks, or deep learning, including DiDi Chuxing and Textio and five to robotics, including Rent the Runway and drone delivery company Zipline International.

Disruptor geographic diversity

For the first time, a majority of the 50 companies are located outside Silicon Valley.

Six are international, with three of the top 10 from China and Singapore.

Twenty-four of the companies are from California — 22 of those are from San Francisco/Silicon Valley area, the other two in southern California.

While eight of the companies are in New York and three are in Boston, we’re seeing a meaningful “Rise of the Rest,” as Steve Case has dubbed the wealth of start-up growth outside Silicon Valley. Atlanta (Kabbage), Cincinnati (LISNR) and Pittsburgh (Duolingo) are among the cities with one Disruptor 50 company each this year.

Disruptor gender gap

Seven of the 50 companies have female CEOs: 23andMe, Clear, Ellevest, Houzz, LanzaTech, Rent the Runway and Textio.

That’s down from last year when the list had a record nine female CEOs, but it is still up from three in 2017. Across all of the 1,200-plus nominated companies, 13% featured a female CEO, slightly below the percentage that made the top 50.

There are 11 companies on this year’s list with a female co-founder (23andMe, Apeel Sciences, Clear, Coursera, Ellevest, Ginkgo Bioworks, Houzz, Kabbage, Progyny, Rent the Runway and Xiaohongshu). That’s slightly higher than the 20% of the nominees with at least one.

Disruptor social impact

This year we took a look at the social conscience of the companies aspiring to make the list and the final 50. Of the over 1,200 nominees to this year’s list, more than a third have some sort of social mission, or environmental or societal benefit. Of the 50 companies that made this year’s list, at least 14 have a clear social benefit from their businesses model.

No. 1: Indigo Agriculture. The company’s mission is to improve the environmental sustainability of agriculture by improving the drought tolerance of key crops and growing yields, while minimizing the need for pesticides. The idea is to improve both agriculture’s impact on the environment and consumer health through the use of natural microbiology.

No. 5: Rent the Runway. RTR from the beginning has said its goal was to end wasteful and environmentally unsustainable “fast fashion” and to shift consumers to a model of access rather than ownership. They’re also focused on environmentally friendly packaging with shippable garment bags that don’t require a box. The company also has a female CEO currently out on maternity leave and who recently focused on extending paid leave benefits to its entire workforce.

No. 6: GoodRx. With a focus on lowering prescription drug costs and making health care more affordable, its CEO says he believes “Americans should have more ways to spend less for high-quality health care.”

No. 7: Airbnb. The company says its mission is to “create a world where you can belong anywhere. ” Employees receive four hours of paid time off every month to volunteer in their local communities. The company is active in disaster response and helps offer free or low-cost, short-term stays for individuals and families in times of need, by partnering with a number of nonprofits.

No. 11: Convoy. The trucking logistics company says it aims to build an economy where truck drivers transport around the world with endless capacity and zero waste. Of all the miles that truck drivers travel across the country, 40% of those trucks are empty, and Convoy uses software to specifically create smarter routes — in turn that saves nearly 400 million gallons of fuel from being consume.

No. 15: LanzaTech. The company aims to eliminate pollution by producing low-carbon fuels and chemicals from waste gases, while also driving a positive social impact on the communities in which it works.

No. 17: Phononic. With a mission to disrupt traditional cooling methods, which has earned Energy Star certification and created more efficient/precise refrigeration without relying on noisy compressors and toxic materials.

No. 19: Ginkgo Bioworks. The company’s process of engineering organisms to replace technology looks to replace toxic chemicals with biology.

No. 27: Impossible Foods. By providing a plant-based alternative to animal protein, the company aims to improve the environmental impact of the way people eat.

No. 32: Cohesity. The company’s strong commitment to diversity and an inclusive workplace culture won inclusion in the 2018 LinkedIn Top Startups List and Entrepreneur’s 2018 Top Company Cultures List.

No. 37: Lemonade. The insurance disruptor aims to make the safety of insurance widely acceptable with a clear, transparent model. The company also gives back, from what’s left after paying claims, to causes its customers care about.

No. 39: Zipline International. The drone company that started in Rwanda and has expanded to Ghana delivers lifesaving medical supplies, greatly expanding access to health care.

No. 45: Ellevest. This female-oriented investment business aims to help women invest for their future.

No. 48: Apeel Sciences. By protecting food without using harmful chemicals, Apeel reduces food, water and energy waste.