Disrupters bring destruction and opportunity

FT Series: Who has been wreaking havoc on traditional business models in 2014

As buzz words go, it is an ugly one. But, in 2014, “disrupters” have been wreaking havoc on traditional business models everywhere, writes Sarah Gordon, Business editor.

As technology puts new tools into innovators’ hands, the old boundaries between sectors are breaking down. Amazon has transformed bookselling, branched out into general retail and is now experimenting with delivery by drones. Apple shook up both the music and telecoms industries, and now has designs on our wrists. Six years after it came into existence, Airbnb has more rooms available than IHG or Hilton, the world’s top hotel groups.

Innovation, of course, is as old as time. And there is nothing new about disruptive companies or about the imagination of the people who create them. “If I’d asked customers what they wanted, they would have said a faster horse,” Henry Ford reportedly said before turning the transport industry on its head with mass production of the motor car.

The Disrupters — day two

The Disrupters — day three

But what feels different about today is the range and number of individuals and companies that are upending business models around the world. Whether it is the plethora of social media that are challenging journalism to reinvent itself; or the advances in technology that have transformed the way we order clothes, the latest film or a taxi; or the increased price efficiency that allows retailers to sell us cheaper goods, the disrupters are everywhere.

Disruption is typically destructive, forcing companies out of business and, often, people out of jobs. But disruption also presents huge opportunities — for consumers, for the disrupters themselves, and for other companies as new techniques such as crowdfunding or big data mining become available to all.

Starting today, and continuing over the next two days, FT reporters have assessed the impact of disrupters in different industries across the globe.

1. Uber — Tim Bradshaw, San Francisco and Murad Ahmed, London
After a year of multibillion-dollar fundraisings, bans in cities around the world and massive expansion, Uber, the ride-hailing app provider, has become Silicon Valley’s poster child for disruption.

The five-year-old company has revolutionised the taxi market in more than 230 cities in 51 countries without owning a single car. Its marketplace connects drivers of regular cars and taxis with passengers through its smartphone app, backed by a “big data” team that tries to ensure a ride is never more than five minutes away.

Led by co-founder Travis Kalanick, Uber has crushed competition from other ride-sharing start-ups and taxi unions alike, delivering a valuation of $40bn as it raised $1.2bn in new funding in December.

This war chest allows it to slash fares as part of its attritional battle to win market share from rival apps and incumbent cab services. Its success has seen San Francisco taxi rides fall by two-thirds in less than two years and caused Hailo, a London-based taxi app, to exit North America complaining it was impossible to compete with Uber’s pricing tactics.

Some of Uber’s drivers have also complained they are forced to work longer hours to make the same amount of money.

A backlash has begun. Regulators, particularly in Europe, have launched probes into the company’s operations, while sometimes Uber disrupts itself. In November, one of its senior executives said Uber should hire investigators to dig up information about the “personal lives” of critical journalists. The comments created a firestorm of criticism.

The incident led many to ask whether the company’s corporate culture, embodied by the man at the helm, would prove to be its Achilles heel.

Mr Kalanick has spoken of Uber fighting political campaigns to expand into cities against taxi drivers’ resistance. To this end, he hired David Plouffe, a former adviser to President Barack Obama, as his head of policy in August.

“I don’t subscribe to the idea that the company has an image problem,” Mr Plouffe told Vanity Fair. “I actually think when you are a disrupter you are going to have a lot of people throwing arrows.”

And as it races towards a $10bn revenue target next year, Uber is not satisfied with taking on taxis alone. From burgers in Beirut and cycle couriers in New York to kittens in Seattle, it is already experimenting with moving more than just people.

2. Alibaba — Charles Clover, Beijing
Having claimed nearly $300bn-worth of online sales via its eBay-style marketplace in the year to June 30, ecommerce group Alibaba has already transformed retail in China.

But now the company, and its rivals, are making inroads into everything from taxi hailing to financial services — snapping up the low-hanging fruit in overly state regulated markets.

Alibaba’s part-owned taxi app Kuadi Dache has made hailing a ride more efficient, while the Yu’E Bao money market fund, which acts like a bank deposit and offers higher interest than the state regulated rate, had attracted Rmb534bn in funds as of the end of September.

Joe Tsai, executive vice-chairman of Alibaba and right hand man to founder Jack Ma, told the Financial Times in November that financial services and healthcare were “very large industries where technology can roll out to reform the current system because some of these industries are very antiquated”.

But Mr Tsai admitted that moves into cosy state-owned industries providing services, such as finance, have not gone as smoothly as they would have liked.

He admitted that plans for expanding into financial services, such as online money market fund Yu’E Bao, had been dealt “a setback” by the central bank’s decision to block plans for a virtual credit card last spring. It felt the introduction of internet competition would have hurt Union Pay, the state credit card monopoly.

“The central bank obviously said ‘let’s slow things down a bit. Let’s understand what these innovations are really about, and let’s bring reform rather than disruption’,” said Mr Tsai.

3. Bob Diamond in Africa — Javier Blas, London
Bob Diamond may not have disrupted a market or an industry, but he has challenged the traditional view that money cannot be made by investing in sub-Saharan Africa.

Since quitting Barclays after it was fined for manipulating the Libor interest rate benchmark in 2012, Mr Diamond has since raised more than $600m on the London Stock Exchange to invest in African banks through his Atlas Mara venture.

Although the American banker is not alone among a new wave of investors in the continent, which includes private equity firms such as KKR and Carlyle and state-owned funds including Investment Corporation of Dubai and Temasek of Singapore, Mr Diamond has become one of the most recognisable faces, competitors say.

“Wall Street investors would put money in Africa just because of him,” says an Africa-focused investment banker. “He has name recognition.”

Mr Diamond initially raised $325m through an initial public offering in London in December 2013, and tapped the market again this year, although he missed a target of $400m. The American banker has partnered with Ashish Thakkar, head of Mara Group, a $1bn conglomerate with business in 19 African countries.

Atlas Mara has already sealed three deals in Africa, building operations in countries including Botswana, Mozambique, and Tanzania. And Mr Diamond anticipates more. “Global banks not in Africa are not looking at it all. It is fantastic — the heart of the reason we are doing this for,” he told the Financial Times in November.

4. Aldi and Lidl — Andrea Felsted, London
German discounters Aldi and Lidl are disrupting the grocery market around the world — from their heartlands of continental Europe to the UK, US and Australia. Aldi is even exploring a move into China.

In the UK, they have almost doubled their market share over the past four years. At the same time, all of the big four supermarkets — Tesco, Asda, J Sainsbury and Wm Morrison, have lost market share.

Aldi has opened 1,350 stores in the US, and plans to take this to almost 2,000 by 2018. Lidl is also preparing to enter the US market, creating further headaches for the market’s big players, such as Walmart, which are already grappling with the threat from the dollar stores.

Mike Paglia, a director of Kantar Retail, says the arrival of Lidl will increase the pressure on established retailers, particularly as it sells more branded goods than Aldi.

“When Lidl comes in … I think that is where it gets scary for the Dollar Generals and Walmart,” he says.

According to consultancy Planet Retail, Schwarz Group, which owns Lidl, is already Europe’s biggest food retailer with sales including VAT of €81.7bn in 2013. Aldi had global gross sales of €67.4bn in 2013.

But incumbent retailers are fighting back. In the UK, the big four supermarkets have pledged to spend billions of pounds cutting prices, while in the US chains such as Walmart are opening swaths of smaller stores.

There are tentative signs that the growth of the discounters is beginning to slow in the UK, but Aldi and Lidl have become such mighty forces in global grocery that they are unlikely to ever revert to the niche positions they once occupied.

5. Ford — Robert Wright, New York
When the first redesigned version of the US’s bestselling pick-up truck rolled off the production line in November, it was not obvious how revolutionary it could be.

But, under the paint on Ford’s new F-150, the body was made of aluminium — a metal that had never before been used on a vehicle produced in such high volumes.

This switch in materials trimmed 700lbs — 13 per cent — from the vehicle’s weight, slashing fuel consumption by between 5 and 22 per cent compared with previous F-150s depending on the model type.

A visit to Ford’s bodyshop complex in Dearborn, Michigan, shows how much of a gamble the company has taken: it has had to replace its arc welding equipment with machines to screw, rivet, glue and laser-weld panels together.

All of this represents a significant risk, given that some analysts say the Ford 150 provides 90 per cent of the group’s operating profits.

“It’s a huge change,” Michelle Krebs, an analyst at autotrader.com, says. “Aluminium has been used in cars before, but on a much more limited basis than Ford is using it.”

Ford — whose history of bold innovation goes back to the invention of modern manufacturing by founder Henry Ford a century ago — hopes it is taking a decisive step to win an advantage over rivals.

The company believes that General Motors and Chrysler will also have to redesign their vehicles to meet strict new fuel-efficiency standards. The first manufacturer to make the transition successfully may be able to cement a long-term dominant position.

6. Just Eat — Kadhim Shubber, London
David Buttress, chief executive of Just Eat, describes himself as an “anti-cooking activist”, an apt label for a man who wants to tempt time-poor consumers out of the kitchen and on to its takeaway delivery app and website.

The UK’s largest takeaway group, which was founded in Denmark in 2001 but moved to Britain five years later, has changed the way takeaways are ordered. It acts as a middleman, connecting thousands of restaurants with consumers who want to be able to shop around on one platform.

In 2013, Just Eat processed more than 40m orders, charging about 10 per cent commission on each and generating £96.8m in sales.

After years growing on investor capital, the group went public in April in a float that valued the business at about £1.5bn.

The company soon joined the ranks of 2014’s disappointing initial public offerings as its shares languished beneath its float price of 260p for months. But the shares are now trading at more than 300p and its debut half-year results in August showed revenues up 60 per cent to £69.8m for the six months to June 30.

Just Eat operates in 13 countries, including Brazil, India and Canada, but the UK’s £5bn takeaway market is its most lucrative, accounting for almost all of its profits. Globally, it has more than 40,000 restaurants on its app and website, all of whom it charges a signing on fee to be listed.

Some analysts are sceptical, arguing that the business model is easily replicated. With Amazon now trialing a takeaway delivery service in Seattle, it is possible Just Eat could see their lunch eaten by a big US tech company.

7. Aereo — Shannon Bond, New York
Aereo was the little disrupter that could not disrupt. Launched in 2012, the New York-based start-up had an audacious pitch: for $8-$12 a month, viewers could stream high-definition, broadcast TV signals to their smartphones, tablets, laptops and web-connected televisions. It raised nearly $100m, largely from Barry Diller’s IAC, and set about challenging TV’s economics.

“We know there’s demand for this,” Chet Kanojia, Aereo’s chief executive, told the FT. “We don’t know if it’s 30 per cent of the market or 5 per cent or 2 per cent, but even at 5 per cent this could be a massive business.”

But Aereo’s dime-sized antennas sparked opposition from powerful broadcasters including ABC, NBC, CBS and Fox, which have seen their businesses transformed in recent years by the ability to charge pay-TV providers growing fees to carry their free-to-air channels. Aereo threatened those “retransmission” fees, which SNL Kagan estimates at $4bn a year.

The networks sued to shut Aereo down on claims the service violated their copyrights by rebroadcasting signals without consent. Aereo countered that it was offering a more convenient form of rabbit ear antennas.

In June, the Supreme Court sided with the broadcasters and ordered the service to shut down. IAC took a $66.6m writedown on its investment and by November, Aereo had filed for bankruptcy protection.

Mr Kanojia wrote in a note to customers that the legal and regulatory challenges “have proven too difficult to overcome” but said his company had “push[ed] the conversation forward, helping force positive change in the industry for consumers”.

Aereo never disclosed revenue, but filings revealed it had just over 77,000 subscribers in 2013. In the end, said CBS chief executive Les Moonves, it was “a lot of attention for a service that virtually nobody was using”.

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The Disrupters — day two

8. Lending Club – Tracy Alloway, New York
Renaud Laplanche, founder and chief executive of Lending Club, taps at the glass case containing a model of a yacht at the “peer-to-peer” lender’s offices in San Francisco.

Lending Club’s 73-foot trimaran came first in last year’s Transpacific Yacht Race and Mr Laplanche is understandably proud of his team’s performance.

He captained the vessel over the five-and-a-half day trip — ultimately setting the second-fastest time recorded since the race was established in 1997. Had it not been for damage caused by floating debris, the team might have set a record.

A former competitive sailor and lawyer, Mr Laplanche stands out from the hoodie-clad crowd of technophiles that populates the Bay Area’s entrepreneurial scene. Aside from a start-up he sold to Oracle back in 2005, the 44-year-old Frenchman lacks much of the geeky tech experience that marks many of his peers.

He founded Lending Club in 2006 after observing the discrepancy between the interest rate on his credit card and the money being paid on his bank account. The idea was simple; use an online platform to match borrowers with lenders directly and cut out the banks to extend cheaper loans that nevertheless generate higher returns for lenders.

It was good timing. The financial crisis of 2008 sparked a wave of anti-bank sentiment that fed into Lending Club’s disruptive message. Years of ultra-low interest rates then helped attract the interest of professional investors keen to put their money to work by buying higher-yielding loans off the platform.

Seven years later and Lending Club has grown to extend more than $6bn worth of loans through its platform – sealing its reputation as the biggest “peer-to-peer” or marketplace lender, and listing on the New York Stock Exchange this month.

At his office in San Francisco, Mr Laplanche is looking at the model yacht again. It is a gift from one of the many investors that helped spur Lending Club’s rapid growth.

The yacht is fast, Mr Laplanche says. “Everything here is fast.”

9. Tesla – Andy Sharman, London
Not for the first time, Elon Musk scored a public relations coup in June when his electric car company, Tesla, vowed to open up its patent book to rivals. It was, said Mr Musk, “in the spirit of the open source movement, for the advancement of electric vehicle technology”.

The apparently magnanimous gesture was also defensive. Tesla needs the bigger carmakers to adopt its technology and propel the market for electric vehicles — still expected to account for only 1 per cent of car sales by 2020. Rival formats, such as hybrid and hydrogen fuel-cell options, are gathering momentum.

But the move could also be seen as an attempt by Tesla to pitch itself less as a rarefied carmaker, and more as an industry-wide platform for electric vehicle technology.

Tesla has for several years been acknowledged as the disrupter of choice in the motor industry. Its upmarket Model S has shown that electric cars can be desirable and profitable. Future iterations will incorporate the latest in autonomous driving technology.

Even the way the company sells cars is shaking up the established retail model by shunning the franchise system and keeping sales and service centres in-house.

But Tesla has moved beyond simply demonstrating an alternative way of doing business. It is keen to bring the incumbents round to its way of thinking. It says a new “gigafactory” in Nevada will probably bring down battery pricing by around 30 per cent. Its global supercharger network could help ease so-called range anxiety — the worry that electric vehicles may have insufficient range to reach their destinations.

“There is a superior business model to the conventional way of making and selling combustion engine cars, and this is electric,” says Arndt Ellinghorst, head of automotive research at Evercore ISI.

But in recent months early investors Daimler and Toyota have pulled back from Tesla and BMW has apparently scotched rumours of a tie-up, suggesting the electric pioneer still faces a fight to win round the wider industry.

10. Lazada.com – Jeremy Grant, Singapore
Ecommerce is growing fast in most parts of the world, but arguably it has risen at a brisker clip in Southeast Asia than anywhere else, thanks to a large population of under-25s in countries such as Indonesia.

That, combined with high penetration rates for mobile ecommerce, has played into the hands of Lazada.com, a company that is expanding so fast in the region it is hard to keep up.

The online retail portal sells goods from motorbikes to mobile phones and kitchen appliances across most of the main countries in the Association of Southeast Asian Nations (Asean), a 10-member bloc which includes not only Indonesia but Malaysia, Thailand, Vietnam and the Philippines.

With a population of 620m and a gross domestic product greater than that of India, Asean’s economies — driven heavily by domestic demand — are where Lazada.com’s parent, Germany’s Rocket Internet, aims eventually to be nothing less than the region’s version of Amazon.com.

Lazada.com has sidestepped still relatively low credit card usage in Asean by offering purchases with cash on delivery, even to fairly remote locations, with delivery by motorbike.

Since its launch in 2012, the online retailer has expanded to have operations in six countries — Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam — as well as a sourcing centre in Hong Kong. Sales on its websites and mobile applications have about doubled since June, with much of that driven by a platform for third-party merchants.

Headed by former McKinsey consultant Maximilian Bittner, Lazada.com operates from a regional headquarters in Singapore with a workforce of about 3,000. It has an online footprint of more than 2m daily visits to its websites, and the largest Facebook following in Southeast Asia, with more than 9m fans.

Tesco, the UK retailer, was an early investor in the business last year. This month Lazada secured €200m in investment from Temasek, Singapore’s state investment company, and three other investors including its German parent.

11. SoundCloud – Jeevan Vasagar, Berlin
SoundCloud’s stated goal is to become the definitive place to “hear the world’s sounds” and some investors believe the Berlin start-up could eventually replicate the disruptive impact of YouTube on video content.

They argue that SoundCloud could be the dominant delivery platform for audio and, like YouTube, become a leading search platform.

Founded in 2007 by Alexander Ljung and Eric Wahlforss, SoundCloud has more than 175m unique listeners monthly. It has raised $60m this year in a funding round that valued the business at $700m. Its investors include Kleiner Perkins Caufield & Byers, GGV Capital, Index Ventures, IVP, the Chernin Group and Union Square Ventures.

But doubts remain about the company’s ability to make money. Heavy investment in technology and marketing — and a revenue stream limited to more active users who pay a subscription fee — meant that it made a loss of £12.4m on a turnover of £8m in 2012, the most recent year for which accounts are available

Striking a deal with the major record labels may be critical for SoundCloud’s future.

Under pressure from both investors and record labels to start generating revenue, in August SoundCloud announced the introduction of advertising and payment for some of its more popular artists — a move aimed at answering questions about profitability. Three months later it signed a licensing deal with Warner Music, though the other two major labels, Universal and Sony Music, are still holding out.

The labels have an interest in working with SoundCloud, a place where fans can discover new music. They also have the power to severely restrict the content hosted on the platform, by pushing SoundCloud to take down copyrighted content uploaded by users.

SoundCloud’s founders say these negotiations are not vital to the company’s viability. Mr Wahlforss recently told the FT that the audio streaming service was not as dependent on a “full catalogue” of established musicians as some other streaming competitors, because of the large number of creators using the site to upload their own mixes.

12. Three – Dan Thomas, London
Three, Hutchison Whampoa’s mobile group, is classed as a “maverick” in the parlance of Brussels regulators – which means it is an officially recognised annoyance in the European telecoms sector as the challenger to traditional business models.

This is particularly true in the UK, where its relatively small size compared to rivals such as EE, O2 and Vodafone has not diminished its ability to make a loud noise among regulators.

The group has successfully campaigned to cut mobile termination rates — the fees that mobile operators are allowed to charge rivals to connect calls — which has been one of the contributing factors to a terrible few years of losses across the European telecoms sector.

Similarly, Three has gone against the industry in campaigning to cut roaming costs — another traditional telecoms cash cow — even to the extent of launching its own “roam at home” packages that have already done away with charges in many countries.

The fact that the group has been lossmaking for most of its existence has not hampered its desire to bring down prices. Most recently the company challenged the notion that next generation superfast 4G networks should come at a premium price by giving it away to its customers in their data tariffs. Three now says that 3.1m customers use its 4G just 10 months on from its commercial launch – more than a third of its 8m total.

Three has not given up on efforts to chip away at prevailing business practices, with plans for a fresh attack on the difficulties that customers have in switching between operators. And, if market rumour is to be believed, it could even be preparing a bid for one of its larger rivals.

The only question then will be whether, as a bigger group, Three can remain such a challenger to the prevailing market wisdom.

13. Appear Here – Sally Davies, London
Cars, powerdrills, other people’s bedrooms: everything seems to be available on tap these days, at least if you have a smartphone and some disposable income. So why not short-term shop space?

Until now, the retail property market has been run like an “old boy’s club”, says Ross Bailey, 22, citing the five-year leases and multiple middlemen that make the rental process cumbersome and costly for tenants. But like an Airbnb for pop-up-shops, Appear Here, Mr Bailey’s London-based start-up, has crafted a digital platform that lets people sign a lease in under two weeks and then pay-as-you-go.

In its 18 months of existence, Appear Here has lured eight of the UK’s 10 biggest retail landlords on board and offers more than 700 spots for hire across the country. An agreement with Transport for London has transformed Old Street tube station into a cornucopia of coffee shops and juice bars, while a hip restaurant is due to open in a former toilet there in January.

Mr Bailey’s original pitch to property managers was to generate income in fallow times between long-term tenants. But increasingly, he says, they see the benefit of catering to the tastes of fickle and fast-moving young consumers, or millennials, who shun the high street experience for the temporary, “artisanal” one. At Old Street, Mr Bailey says that since April he has more than doubled the rent that TfL took in during the same period last year.

Appear Here has earned single-digit millions of pounds in rental income over the past 12 months, and plans to expand into more European cities next year. To compensate for higher overheads than typical holiday rental platforms — including a built-in concierge service for tenants — it takes a transaction fee of around 15 per cent.

Renters range from one-woman doughnut-sellers to brands such as Net-a-Porter. Addressing the issue of whether his mainstay small business tenants “graduate” off the platform, Mr Bailey says that some have been in for more than a year, and they typically prefer the flexibility to being locked into a long-term lease.

14. Mario Costeja González – Murad Ahmed, London
Mario Costeja González just wanted a small slice of his past to be ignored, lost, left behind.

But he found that the internet operates by hoovering up all information, regardless of context and the passage of time. This means every slither of a person’s life can be recorded and then dredged up by a single Google search. It was this problem that led the Spanish lawyer to fight the internet’s dominant company.

In May, Mr González won a landmark case in the European Court of Justice which enshrined a new “right to be forgotten” online. This allows the continent’s citizens to ask Google to request that sensitive information be removed from search queries. Google has reluctantly accepted the ruling and is going through a tortuous process of implementing the decision.

The judgment means that Mr González has for the foreseeable future changed the way Google’s dominant search engine operates, and subtly changed the expectations of millions of web users on how their data should be handled by Silicon Valley companies.

Perhaps Google, the web’s Goliath, underestimated the man it was up against. Mr González, 59, lived through Franco’s dictatorship and describes himself as a freedom fighter. He says he does not defend censorship, but wanted the opportunity to remove data that “violates the honour, dignity and reputation of individuals”.

He started his case in 2010, after finding that a Google search of his name brought up a two-decades old article that detailed the auction of a house he was forced to sell to settle his debts. In the process of winning the right to have the link deleted from Google’s results, he ensured the incident will never be forgotten. But this was a price worth paying if, in his view, the search engine would go from being simply good to becoming “perfect”.

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The Disrupters — day three

15. Netflix — Shannon Bond in New York

2011 was not a good year for Netflix. The company raised its prices 60 per cent and announced plans to divide into two services — one sending DVDs through the mail, its original business, and the other streaming movies online, an increasingly popular choice among its 24m subscribers.

The split was scotched, but the price hike remained. Nearly 1m customers cancelled their service and Netflix’s market capitalisation shrivelled from $16bn to $4bn in just three months.

Three years later, the upstart’s bet that people want to watch content when and where they want has turned it into the biggest force in internet television. Its success, and the speed with which consumers are embracing streaming media, has prompted established TV networks to announce plans to stream their shows online — threatening to disrupt long-established television models.

“While hugely popular, the linear TV channel model is ripe for replacement,” says chief executive Reid Hastings.

Netflix counts more than 50m subscribers in 50 countries. It is on track to top 2013’s results, with revenue already at $4bn in the first nine months of this year and net income of $183m. It is producing well-received original shows, from House of Cards and Orange is the New Black to Oscar-nominated documentaries. It is moving into the movie business as well, with deals to premiere the sequel to Crouching Tiger, Hidden Dragon online the same day it appears in cinemas and to be the exclusive home of four new Adam Sandler films.

But the company’s path to growth is still facing speed bumps. Shares in Netflix fell 26 per cent in October after poor US subscriber growth, which it blamed on another price increase. Competition is set to become even fiercer next year with the debut of HBO’s streaming service. And Netflix’s global ambitions come at a price: content costs rose more than a third to $8.9bn in the third quarter, fuelled by deals for its launches in Europe. Shannon Bond

16. Tinder — Hannah Kuchler, San Francisco

For generations, dating was boy meets girl, dinner and a movie, marriage and a baby carriage. But in the mobile app era, Tinder has quickly transformed millennial’s dating into a matter of swiping left and swiping right.

Tinder has developed a new dating vocabulary, where users of the mobile app swipe right if a profile takes their fancy and left if they are not interested. When two people like each other, a chat window opens and hook-up arrangements can begin.

The Hollywood-based app has shaken up relationships between young single people. While Match.com and eHarmony pull in detailed information about users so algorithms can play old-fashioned matchmaker, Tinder’s profiles make clear it is all about image, restricting profiles to a photo and a line of text. It is strictly location-based, using GPS to determine which potential matches are nearby, encouraging dating on the fly.

Tinder has risen to the third most used dating app after Match.com and Plenty of Fish, with 3.6m visitors, up 1,400 per cent over the past year, according to figures released by ComScore in September. It is in the top 10 lifestyle apps in almost 70 countries, according to App Annie. And it has spawned many copycats, including Caliber (Tinder for meeting professionals), JSwipe (Tinder for Jewish people) and BarkBuddy (Tinder for adopting dogs).

The app is owned by Match.com’s proprietors IAC, which have tried to allow it to operate as an independent start-up. But Sean Rad, co-founder and chief executive, was recently demoted to president as IAC searches for a replacement, and Justin Mateen, chief marketing officer, was pushed out after a sexual harassment lawsuit, which has been settled out of court.

Next year, Tinder to plans to explore making money with a premium service “Tinder Plus”. Users will be able to pay a subscription fee to “undo” when they accidentally swiped left on someone they found attractive and to use “passport”, a feature that will enable people to browse matches in other regions, for example, to set up hook ups for a holiday.

17. Xiaomi — Tim Bradshaw, San Francisco

Named after “little rice”, Xiaomi has big plans for 2015. A fundraising earlier this year of $1.1bn gave the fast rising Chinese smartphone maker a price tag of $45bn, making it one of the most valuable private tech companies in the world, just three years after it launched its first smartphone.

Xiaomi overtook Samsung to become the top smartphone vendor by volume in China earlier this year and was briefly the world’s third largest overall, behind Apple — a title it lost to Lenovo after its rival completed its acquisition of Motorola in October. As well as expanding into new markets such as India and Malaysia, Xiaomi is broadening its portfolio to include fitness-tracking wristbands, TV set-top boxes, online video and perhaps, soon, a smartwatch to rival Apple’s. Critics may say that Xiaomi’s flagship Mi devices are a little too similar to Apple’s iPhone but much of its growth is being driven by its cheaper RedMi range.

It is not just the volume Xiaomi is selling that makes it disruptive; it is also how it is shifting all those devices. Its online flash-sales model builds up hype through social media around each new product release, which often sell out in minutes. Selling through its own website — now one of China’s largest ecommerce portals after Alibaba — allows it to keep prices low. With such strong momentum, its biggest risk is whether it can make enough devices to keep up with demand.

18. Indian e-commerce — James Crabtree, Mumbai

2014 was the year Indian ecommerce finally grew up. For years, Bangalore’s tech entrepreneurs looked on forlornly as scrappy Chinese start-ups such as Alibaba and Ten Cent grew suddenly into internet giants, with prodigious valuations to match. But over the past 12 months they have begun to enjoy that same journey — and one that is likely to have an even more disruptive effect on their own country’s economy.

Flipkart led the charge, raising $1bn in July, an infusion that valued the online retailer at $7bn, with rumours of a similarly-sized funding round soon. New Delhi-based online marketplace Snapdeal, which is modelled on Alibaba and backed by eBay, then won investment of $627m from SoftBank of Japan. And over the year a host of Silicon Valley-based venture funds ploughed money into start-ups covering everything from housing rentals to restaurant reviews, all hunting for a slice of an e-commerce market that is set to expand from $2bn this year to $19bn by 2019, according to analysts Technopak.

Taken together, India now boasts more than half a dozen groups with valuations above $1bn, including mobile advertising group Inmobi, analytics specialist Mu Sigma and travel site MakeMyTrip. True, many of these follow models pioneered elsewhere.

Flipkart looks a lot like Amazon, for instance, which is why its American competitor upped its investment in India by $2bn this year. But despite that occasional copycat feel, e-commerce in India is likely to shake up its home market in ways that outstrip even other emerging economies. India’s bricks and mortar retail sector remains disorganised, fragmented and hamstrung by land and regulatory problems, hobbling its ability to expand in the face of rising demand from a new generation of middle-class consumers.

As a result, most analysts think India’s e-commerce start-ups will quickly race past their offline equivalents in revenue terms. And soon after that, their investors hope the country’s first blockbuster Alibaba-style international flotation will follow.

19. Embraer — Joe Leahy in São Paulo

Through a cloud of dry ice, the prototype of Brazil’s KC-390 emerges from its hangar before a select audience of journalists and aviation and military officials in the interior of the state of São Paulo. The newest offering from Brazil’s Embraer, the world’s third largest commercial aircraft manufacturer, the transport jet has a mission — to steal market share from that steadiest of workhorses, the Hercules C-130.

If the KC-390 even goes part way to fulfilling this promise, it will be a true disrupter in its industry. Lockheed Martin’s C-130 has few real international competitors after more than 50 years in service with the US military.

With the first flight due by the end of this month, Embraer has already signed a R$7.2bn ($2.7bn) contract to supply 28 of the aircraft to the Brazilian air force and letters of intent to purchase another 32 have been agreed with five countries, Argentina, Chile, Colombia, Czech Republic and Portugal.

Described by Embraer as the “only new multi-mission medium airlift in the market”, the KC-390 has many of the capabilities of the C-130. It can carry 80 soldiers or 66 paratroopers, three Humvee jeeps or one Blackhawk helicopter and land on dirt airfields. It can undertake medical rescue and evacuation missions, forest firefighting and in-flight refuelling of other aircraft. But with a cruise speed of 470 knots, it is faster than a more recent version of the Hercules, the C-130J, at 362 knots.

Frederico Curado, Embraer’s chief executive, said with the C-130 the “only aeroplane out there”, the upstart Embraer would be very happy with a 15-20 per cent share of this grand old man of the skies’ market.

20. IMatchative — Harriet Agnew, London

Data analytics company iMatchative claims to be disrupting the way that institutional investors decide which hedge funds to invest in. On one level, its platform AltX is a match.com for hedge fund managers to meet investors. On another, it is a place where investors in hedge funds can store details of their portfolios, benchmark and monitor them, and adjust them.

The brainchild of Sam Hocking, who formerly co-ran global prime brokerage at BNP Paribas, iMatchative is the brainchild of marries the concepts of big data analytics, crowd sourcing, and behavioural finance to support a more efficient capital introduction process for hedge funds and potential investors.

AltX has a screenable universe of more than 16,000 hedge funds. Investors can search through the universe of funds with criteria that they are looking for. Initially this might be a particular strategy, fund size or annualised return and the first selection can be refined by 50 filtering factors, ranging from women-only funds to more sophisticated metrics such as kurtosis or annualised standard deviation.

The data which feeds into the algorithms comes from third-party providers such as Barclay Hedge, Lipper, Eureka and HFR, as well as the publicly available data collected by regulators. Once investors have constructed their portfolio of hedge funds, they can run a range of different simulations on it.

The social network component of AltX allows investors to perform due diligence on managers by finding out a range of information, including who they were at school or university with, whether they are divorced, previous jobs and board experience.

Investors pay $30,000 to license the technology while hedge fund managers pay $15,000. iMatchative will also receive a fee if an investor uses it to find a fund that results in an investment. It raised $20m in its latest round of funding, where investors included Wells Fargo & Co and Mexican businessman Carlos Slim.

21. Emoov — Kate Allen, London

When Essex estate agent Russell Quirk set up home-selling website eMoov. co.uk in 2010, he aimed to shake up his former colleagues on the high street.

Seeing the inroads internet-based firms were making into traditional businesses in other sectors, Mr Quirk realised that the business of buying and selling houses was overdue a transformation. By abandoning the mainstream model of having an office on every high street, eMoov could make cost savings that could be passed on to home sellers.

High street agents charge between 1 and 2 per cent of a property’s sale price, meaning their fees can amount to tens of thousands of pounds. By contrast, online agents charge hundreds of pounds and usually allow sellers to pick and choose what they want to pay for, from photography to booking viewings.

Although Mr Quirk was not Britain’s first online estate agent — Hatched launched in 2006, while TV celebrity Sarah Beeny launched Tepilo in 2009 — eMoov has grown to become the biggest, having sold £650m-worth of homes in the past four years.

Now competitors are piling into the market. EasyJet founder Stelios Haji-Ioannou launched easyProperty this autumn, while veteran investor Neil Woodford backed PurpleBricks this summer.

The online estate agency sector is still relatively small, with around a 5 per cent share of Britain’s home-selling market, but it is doubling in size each year, Mr Quirk said. “Our belief is that the online estate agency sector will grab around 30 per cent of the residential property market by 2018. Traditionally estate agency has been high-cost and low service, but we want to change that.”

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