- Agtech: Field robotics will receive a record level of VC investment in 2021 The pandemic has exacerbated labor shortages in the agriculture industry and field robotics and smart field equipment could meet this need by helping farmers automate manual functions and reduce their reliance on human labor.
- Artificial intelligence & machine learning: Within the horizontal platform segment of AI & ML, natural language technology (NLT) will receive the highest VC funding NLT has experienced technical breakthroughs in 2020 that position the technology to become a building block for startups and enterprises alike going forward.
- Cloudtech & DevOps: Remote work technology represents a long-term megatrend with significant exit opportunities likely in 2021 The COVID-19 pandemic catalyzed the need for remote work as a means to ensure business continuity and startups selling into this opportunity benefit from step-function growth as the customer base expands and demand increases.
- Enterprise health & wellness tech: E-pharmacy incumbents will expand their reach across the drug distribution ecosystem via partnerships, along with increased M&A of startups that can deepen product offerings The avoidance of in-person pharmacies amid COVID-19 has expedited consumer conversion from traditional brick-and-mortar pharmacies to e-pharmacies which will likely drive expansion of the e-pharmacy industry and lead to increased M&A.
- Fintech: Consumer fintech companies will fuel a record year of VC exits via public markets On the heels of numerous fintech IPOs in 2020, the fintech industry is currently top heavy with consumer fintech companies. Seven of the top 10 fintech unicorns in the US provide consumer fintech services.
- Foodtech: Plant-based, alternative protein, and cultivated meat startups will see elevated M&A activity in 2021 The venture funding of plant-based food startups has surged over the past two years, leading to a crowded, competitive environment on track to foster increased M&A as this industry consolidates around winners.
- Information security: Five infosec unicorns will go public in 2021 Despite there being only two IPOs of VC-backed companies in North America and Europe in 2020, numerous private companies have achieved the scale and institutional funding required to pursue listings.
- Insurtech: Insurtech VC investment will revert to higher levels driven by insurance distribution marketplaces and intermediaries in 2021 Although the pandemic caused VC investment into insurtech companies to slow in 2020, it also spurred the acceleration of digital transformation within the industry, as insurers increasingly relied on online and digital services to engage and sell to customers, underwrite and service policies and settle claims.
- Internet of things: Industrial automation incumbents will return to internet of things (IoT) M&A The COVID-19 pandemic has caused manufacturing & supply chain customer preferences to change and going forward, there will be significant spending snapbacks in manufacturing, construction, and supply chain IoT in 2021, which will enhance the revenue synergies of startup acquisitions.
- Mobility tech: A second wave of SPAC mergers focused on self-driving technology will mark 2021 investment in mobility tech Reverse mergers with special purpose acquisition companies (SPACs) present an attractive go-to-market strategy for autonomous vehicle companies given their ability to quickly go to market at high valuations with lower levels of scrutiny relative to traditional IPOs.
- Retail health & wellness tech: Digital therapeutics (DTx) startups will receive a record level of VC investment in 2021 VC funding activity in the DTx space is starting to rise and startups in this industry have the potential to help close the gap in care with traditional therapeutics by providing scalable, easy-to-manage, data-driven treatments.
- Supply chain tech: Last-mile delivery platforms are primed for major IPOs in 2021 Last-mile delivery businesses represent an opportunity for investors to gain exposure to a fast-growing consumer subsector with secular tailwinds and a rapidly expanding addressable market.
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