Predictions For The Venture Capital Space For 2021

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Predictions For The Venture Capital Space For 2021
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As we approach the end of the year, below are some thoughts from the partners at Rocketship.vc, a Silicon Valley firm using data analytics to identify investments, on the predictions for the venture capital space for 2021.

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Q3 2020 hedge fund letters, conferences and more

Predictions For The Venture Capital Space

Investment strategies will become more globalized due to the force-function of remote fundraising efforts. As a result, hot markets will include Vietnam, and Indonesia for APAC, as well as Mexico, Colombia, Texas, Ohio, and Utah in the Americas.

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More time online means more data available for companies. Sectors poised to take immediate advantage of increased consumer data will see a massive upwind. That means we’ll see big wins for sectors like insurtech and fintech who thrive off of data and can take immediate action.

Personal data management is poised to become a new critical sector. There’s a major trend of companies accelerating their security efforts as well as a whole new wave of companies created to secure various aspects of our lives as more people embrace virtual living.

The shift to remote care will push healthtech to new heights in terms of VC investment, company creation and consumer adoption. Healthcare outcomes will begin improving as barriers to get services come down, and newfound willingness to share anonymized health data accelerates the possibility of large scale research.

The lines will blur between the hottest and most in-demand new sectors with partnerships, pivots and full-fledged new ventures. 

  • Significant crossover businesses are being made increasingly possible due to the new online nature of work. Potential crossovers to watch include:
    • Edtech + Fintech - from tuition assistance to new payment models for tutors and teachers
    • Healthtech + Fintech - pay-as-you-go healthcare models made possible via telemedicine

Fintech Market Will Be Focused On Lending And Payments

The continued bullish fintech market will be focused on lending and payments. Lending and buy-now-pay-later infrastructure will explode next year as fintech continues to heat up.

Even hobbies will move into the cloud as we socialize more behind screens. Once the norm of work productivity gets re-established while remote, we’ll see an explosion in creativity as people use this additional time for a variety of purposes. We already see this in trends like fitness, gardening, etc. This trend will also extrapolate to content and media production, collaboration and new social activities (think watch parties, cloud gaming, etc).

The Majority World will leapfrog in 2021 due to the need for solutions in crucial sectors. While most of the infrastructure in the US and Western counterparts is able to keep up with the rapid acceleration to virtual, the weak spots in sectors like energy, government services and rural healthcare will become more apparent. Analog to these sectors in the Majority World are critical ones such as food and money, which is allowing for leapfrog opportunities in select regions.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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