Show me the Seed Money!

Show me the Seed Money!

Even amidst a global pandemic, venture capitalist investors (“VCs”) remain relatively aggressive with their investment theses and are looking to find and fund the next big company. But, despite the continuation of their normal activities, VCs know well that these are not normal times. Some sectors that were booming pre-lockdown, like travel and tourism, are now in deep trouble and won’t fully recover for years. Meanwhile, sectors like tech and healthcare are experiencing even greater success than they did before the pandemic began.

The team at BlueFoot was curious: out of the industries that are doing particularly well now, which ones also experienced rapid growth in the years preceding 2020? Understanding the answer to this question is crucial -- the economic landscape is not so simple that we would be justified in blaming it all on the coronavirus. Any experienced financial analyst would warn you against investing in an industry without looking at its long-term historical trends beforehand.

In order to analyze these trends, we used the same extensive data from BlueFoot’s back end software that are utilized and responsible for the successes of our SaaS platform, BlueSize, and foreign filing reports. Here are five sub-industries we found to have shown strong growth before and despite the pandemic. For context, the average VC funding per sub-industry is $803 million.

    1. Productivity Tools. Productivity tools are computer software programs that facilitate office functions and increase efficiency. Some popular ones are Zoom (video chat), Google Drive (file synchronization), Slack (company-wide messaging), and Clockify (time-tracking).

    - By the numbers: Total funding was $975 million (annualized) in 2020, up from almost no funding in 2015 and $731 million in 2019.

    - Why this industry? In an article written before the pandemic, TechRadar confirmed increased demand for tools like these as an attempt by companies to globalize and streamline collaboration. You can imagine how worldwide lockdowns have rendered this industry even more valuable.

    2. EdTech. Education technology, or “EdTech,” uses interactive software to enable and enhance learning whether that be free online college courses at Coursera or early online education with Age of Learning’s ABCmouse.com.

    - By the numbers: Total funding was $3.49 billion (annualized) in 2020, up from $1.36 billion in 2015 and $1.41 billion in 2019.

    - Why this industry? By increasing collaboration and offering 24/7 access to learning to students who have grown up surrounded by technology, EdTech’s expanding influence has become ever more prevalent in recent years and has blown through the roof since COVID.

    3. Insurance. According to McKinsey, life and P&C (“property & casualty”) insurance are the global [leaders] of the insurance market, with health insurance following close behind. The industry is led by companies like Prudential, State Farm, and AccuQuote.

    - By the numbers: Total funding was $3.07 billion (annualized) in 2020, up from $250 million in 2015 and $834 million in 2019.

    - Why this industry? Insurance spending has been falling for years, but the pandemic has supercharged demand for life and health insurance, as per CNBC. Online insurance marketplaces have recently been popularized as well.

    4. AgTech. Agricultural technology (“AgTech”) is used to improve and develop farming techniques and products. Notable companies include Concentric for its bacteria research, Soft Robotics for its automation of crop-handling, and Indigo for its optimal microbe database.

    - By the numbers: Total funding was $2.86 billion (annualized) in 2020, up from $360 million in 2015 and) $285 million in 2019.

    - Why this industry? Forbes cites labor shortages, trade wars, and lack of data exposure as leading causes for the rise in AgTech’s popularity in recent years.

    5. Cloud. Cloud computing – software, storage, databases, and analytics – is the only thing on this list that you definitely use; you’re doing it right now as you’re on the internet reading this article. Maybe that’s why you’ll recognize these companies: Microsoft, Amazon, Google, and IBM.

    - By the numbers: Total funding was $1.91 billion (annualized) in 2020, up from $1 billion in 2015 and $1.11 billion in 2019.

    - Why this industry? The need to enable remote work intensified the already high need for cloud computing resources. It’s obvious that this industry, while thriving far before the outbreak of COVID, was bound to escalate like never before.

Notice any overarching trends? Technology is continuing to take over venture capital, even in unexpected areas like agriculture and insurance. BlueFoot can help you monitor the innovation landscape in the industries you care about. Like venture capitalists, BlueFoot stays on top of how the market is changing and wants to help you do the same.

It’s time to find a new Strategy.
It’s time for BlueFoot.

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