Venture capitalists have had a significant influence on the economy. However, it’s in technology where most venture investments go. According to Bain & Company, tech companies have received the most venture capital funding in the last decade, at above 60% yearly. Here are four trends that are shaping venture capital investment in tech today.
1. Artificial Intelligence, Machine Learning and Automation
Of all the start-ups receiving funding attention from venture capital investment companies, AI and machine learning start-ups have a giant share. Bain & Company say that the health sector, especially drug discovery and imaging, and the transportation sector robo-taxis and autonomous driving are receiving the most attention from venture capitalists.
Digital platforms such as ByteDance, Virtual Sapiens, and Tempus are already disrupting specific sectors such as debt financing and virtual communication. Venture capital investment has made it easier for AL/ML companies to scale up fast and establish themselves as disruptors on an international level.
2. E-Commerce & Online Marketplaces
E-commerce has been around for years, but the COVID-pandemic disrupted shopping experiences. Venture capital companies are keen to invest in start-ups that provide logistic solutions and interactive, well-designed online marketplaces. Shopify is a good example of a company that grew in popularity after the pandemic. According to Statista, Shopify increased its market cap by 200% during the pandemic years.
3. Healthcare & Wellness Technology
Healthcare is now more important than ever as people seek digital solutions that improve access autonomy and lower costs. Venture capital companies such as Andreessen Horowitz, where Brad Kern is a partner, are constantly looking to help start-ups that use technology to improve health and well-being. Investors are funding new diagnosis, imaging, telemedicine, and genomics approaches. Marker Learning is an example of a health tech changing how learning disability diagnosis is done.
4. Virtual Workplace Solutions
The pandemic, an increasing desire for work-life balance, and generational changes have all fueled office-to-home migration. Venture capital companies seek innovative start-ups offering virtual workplace solutions from cloud productivity tools, real-time virtual communication tools, and automation software. Since the office-home migration is not slowing down, venture capital companies may continue funding solutions such as AI-powered analytics and project management software.
Technology start-ups have disrupted how people live, work, move, and even access healthcare. That’s why tech start-ups take the giant share of venture capital funding, a trend likely to grow as the world embraces technology. Of course, issues such as ethics will also shape which projects venture capital companies choose to fund.