Six venture capitalist opportunities for 2021

As the end of 2020 approaches, experts share their views on venture capitalist investment opportunities for 2021.

Social distancing

“The trend right now is that remnants of social distancing will be around for a long time, maybe permanently. The airlines will need to find new ways of sanitisation, making passengers comfortable about flying again. Restaurants will no longer serve food in traditional ways; any and all large venues will struggle to balance safety and contagion fears with practicality and entertainment. And governments at all levels will likely leverage the new powers they’ve assumed in deciding what is essential and what is not, whether in business or our personal lives.”
– Gary Griffiths, co-founder and managing director of Wisdom

Diversity

“Almost every good venture capitalist has specific targets about the amount of money and the investments they want to make in diverse teams, and I mean all different types of diversity. Also, targets about board representation, which we made huge progress on this year, with having female boards. And, actually, then putting in diversity riders which say the team you are going to build as a startup needs to be diverse. You’re seeing an explosion in female-founded VC funds, female-backed VC funds, diversity VC funds. The fact that these are now becoming mandated terms and active pots of money being allocated is something that’s never happened before.”
– Ali Mitchell, partner at EQT Ventures

Mobile gaming

“There’s no doubt that the gaming industry is growing rapidly and although this trend, like so many others, has been accelerated by COVID-19, it is by no means exclusively attributable to it. The world’s 2.7 billion gamers will spend around $159.3 billion on games in 2020 and the market will surpass $200 billion by 2023. The fastest-growing aspect of gaming is that of mobile gaming, with an estimated $77.2 billion of revenues generated this year. This represents a 13.3 per cent year-on-year growth and a highly desirable market for venture capitalists.”
– Michael Johnson, group head of fund services at Crestbridge

Sustainability and sustaintech

“The thing we see that represents what’s on everyone’s minds in terms of climate change is sustainability. Now, people call it ‘sustaintech’. It encompasses a lot of things; there’s some renewable energy in there as well. In the past, I think it has been sometimes challenging to find a commercially strong returns type of business that also has clear sustainability, but I think that is changing. There is great demand from investors, the public and venture funds. I think that’s going to be very popular because it’s on everyone’s minds. Yes, we are living through COVID-19, but climate change is not going away and we need to remember it is also a big threat.”
– Matus Maar, co-founder and managing partner of Talis Capital

Instagram brands

“I do think the changing landscape will have an impact on direct-to-consumer startups. The biggest trend we are seeing is what we call ‘late-night Instagram brands’ which rely on the impulsive purchases people make when scrolling through their feed late at night. These kinds of brands will see a lot of pressure as government funding for consumers ends in the United States and European Union, and consumers pull back on their discretionary spending. These firms should be looking now for ways to adapt with little time to play it safe.”
– Rakesh Narayana, global director of RB Ventures

Tech ‘gold rush’

“Tech is the huge winner out of the pandemic. Every part of our lives has been digitalised and the knock-on effects of that is what all the tech investment is going into. Industries that were laggards had to digitalise quickly. That’s what the gold rush is now – and it is a gold rush. I haven’t seen valuations and growth in parts of the market like this since 1999. It’s a dichotomy: parts of the economy are having a really tough time, while tech is absolutely exploding. It’s the hottest and most exciting and active market I’ve seen in 20 years.”
– Ali Mitchell, EQT Ventures 

Excerpt from Raconteur Business Growth & Recovery special report published in The TIMES.

Download the full report for free.