The best opportunities are born during and after hard times. Throughout history, we humans have been able to transform our reality and adapt to the challenges of each era. In 2020, we saw how during the pandemic new tech developments and business emerged, and existing ones evolved at a faster pace than expected all while consolidating in markets with new needs.
As 2021 is already in full swing, we want to share our thoughts on the predictions we are most excited about this year.
1. FinTech products with a focus on investing will be on the rise in 2021. The economic shut-downs and lockdowns of 2020 have meant higher saving rates for a lot of US Americans (nearly 33% mid-pandemic) and Europeans (22% household saving rate), leaving them with cash to burn in 2021. Products like Robinhood, Coinbase, Betterment and other investment-based platforms will be even more relevant and attract those that want to put those savings to good use. Micro-investing will also flourish, platforms like Paypal are going into it.
Sources: Next Advisor & DW
2. Travel and Experiences will be back in a big way. The travel-tech industry took a big hit in 2020 when all non-essential travel was suddenly paused. But, this has also meant the cabin fever caused by COVID-19 will bring a new boom to 2021 exploration and leisure travel. Companies like Explorest will lead the way in inspiring people to travel again. We are optimistic about the great potential of the Traveltech sector with investments in 5 different startups: Glamping Hub, Boatsetter, Daycation, Explorest, and Wefish. “Travelers are still afraid of cruise ships, hotel occupancy is around 50% and international travel is hard” says Ruben Martinez, founder of the American Glamping Association and co-founder of Glamping Hub, a booking site with more than 15,000 glamping destinations in the U.S. “Glamping provides an escape to the outdoors with running water, a nice bed, Wi-Fi and even good food” says Martinez.
Source: Wall Street Journal
3. Health-Tech will go beyond telemedicine, IoT and AI. 2020 saw an obvious rise in the use of telemedicine, like 1DOC3 startup during the pandemic. This is not something we see going away in 2021. However, we also see a growth in a more preventative approach to health with companies like Base, Paloma Health, and Woom, equipping consumers with data to make the right decisions about their health and lifestyle.
4. Petcare will grow as a result of an uptick in pet ownership in 2020. For some, a lonely pandemic created an opportunity to adopt or buy a furry companion. Shelters across the US alone reported doubling adoption rates in some cities and even waitlists created. There are now more pet-owning households than households with children in the US. Furthermore, the global pet-care industry is expected to reach $269B by 2025. The pet industry is often said to be recession proof since pet owners don’t see their pet spending as optional. For this reason, Pet health will be more important than ever for all the new pet owners with companies like Barkibu providing much-needed support.
Sources: Forbes & Global Market Insights
5. Personal Cyber Security/Online Protection will be as standard as virus protection software was in the past. 2020 saw us move most (if not all) of our lives fully online. This brought an increase in attacks such as the infamous “zoombombing”, but the attention for the need for personal online protection is clear. Cybercriminals have traditionally targeted corporate infrastructure, but with a huge chunk of the global population now online, the targets are shifting to individuals. Companies like 4iQ (now Constella Intelligence) look to fight that. The number of new identity records exposed is growing steadily while previously exposed information continuously recirculates within underground communities. 4iQ found 18.7 billion raw identity records circulating in underground communities – a 25.5 percent increase from 2018.
6. ESG (Environmental, social, and governance) investing is finally becoming a trend in the financial world. The sustainable investment strategy takes into close consideration whether a business initiative is socially, environmentally, and organizationally responsible. This is done with the mindset that managing these issues when investing can help generate stronger returns, while also improving a companies’ impact on society. ESG funds have even managed to post strong performance during 2020. Of 26 sustainable index funds analyzed by investment research company Morningstar in April, 24 outperformed comparable traditional funds in the first quarter of 2020 (and the beginning of the COVID-19 pandemic). At TheVentureCity we believe this is the most profitable and ethical way to invest.
7. Remote work and e-learning are here to stay. Not only has this allowed companies and employees to cut costs in office expenses, training, commuting, and even business trips, but many companies and organizations have streamlined their operations. They are realizing that many of these jobs can be performed from home. Only in training, IBM saved approximately $200 million after switching to e-learning. The pandemic has also caused a deep shift in the education landscape. The worldwide e-learning market is now projected to be worth $325 Billion in 2025. Higher level education on any subject is now only a few clicks away, and without the burdening expenses that come with actually attending a college. Our investments in edtech startups LessonBee and Smowltech show our optimism in this sector.
Source: Market Research.com
8. AI has now become an indispensable tool for companies to have. In the age of Data, with the sheer volume of information available, companies have to find a way to harness this information and be able to act upon it. Machine Learning and Artificial Intelligence are no longer novelties but necessities for companies to scale and succeed in today’s environment. Not acting upon this opportunity means risking missing out on crucial information that could allow startups to transform their businesses and stay ahead of the curve. Last year, corporate venture capital investments in AI startups rose 27% to 453 deals while funding climbed 72% to $10.6 billion, and we only expect that to increase in the coming years, especially in light of the pandemic.
Source: Investor’s Business Daily
Let’s see what 2021 has in store for us! 🚀🚀🚀