Venture Capital

5 sectors gaining ground in Venture Capital

The Venture Capital industry is always looking for innovative and high growth potential sectors.. El 2021 fue uno de sus mejores años al romper récords de inversión en los distintos sectores. Sin embargo, durante este año, los inversionistas han mantenido cautela, enfocando su atención en sectores clave.

The current scenario in the different markets makes venture capital investors to consciously evaluate the business models, profitability and sustainability of companies that seek for capital injection. Also, they focus their attention in specific and growth potential sectors. 

5 sectors that attract the venture capital industry

The global uncertainty landscape hit consumer-focused sectors. Currently, investors question the changes in consumer behavior, which has caused more business models to question how to approach the consumer, according to Q3’22 Venture Pulse Report, Global trends of KPMG report.

Based on investment results and market prospects, report highlights 5 sectors gaining ground in the venture capital industry:

Alternative Energy

The energy sector is one of the winners in attracting private capital globally. The increase in prices of energy in different parts of the world promotes investors' interest in alternative energy development. 

Globally, U.S. energy developer TerraPower raised US $750 million, while China-based Gokin Solar raised US $369 million. 

Las empresas enfocadas en el desarrollo de energías alternativas y con bases en los criterios ESG, también mantuvieron su atractivo dentro de la industria del venture capital. La  compañía Xpansiv, que ofrece infraestructura para el desarrollo de productos ambientales que impulsen la agricultura, la energía y  materiales, lideró con el aumento de 500 millones de dólares.

Health and Biotechnology

Healthcare and biotechnology have always been sectors of great interest for Venture Capital. During the third quarter of 2022 investors remained interested in modernizing the sector, as well as encouraging the study of areas such as the inclusion of Artificial Intelligence (AI) in biotechnology. As well as medical care from home and the search for solutions for mental health. 

During the third quarter of 2022 Bioformis, an American virtual healthcare and home therapies company, raised US $320 million in the venture capital industry. Also, the company Cera Healthcare Technology Systems, based in the United Kingdom, raised US $312 million. While the firm Sironax in China, raised US $200 million. 

Foodtech

Consumer habits along with the implementation of new technologies are changing all industries, one of them is food. Food Tech redesign feeding hand in hand with the use of technologies such as Artificial Intelligence (AI), big data or the Internet of Things (IoT).

According to Dealroom, investors remain optimistic about this industry and during the first quarter of 2022 food tech obtained an investment of US $9,200 million in private capital. Investments were concentrated in sectors such as delivery, online supermarkets and alternative proteins, to name a few. 

Artificial Intelligence and machine learning

During the last few years, artificial intelligence and machine learning obtained great attention from investors around the world. The KPMG report, supports that el sector ha madurado lo suficiente como para que las startups descubran distintos  nichos en los que se puedan utilizar estas tecnologías y así impulsar la innovación en las diferentes industrias. 

With the demand of today's market, emerging companies can obtain the value and sustainability from the use of artificial intelligence and machine learning. What is predicted as a great attraction for investors in the Venture Capital industry. 

Cybersecurity

Cybersecurity showed resilience during the last quarter and private capital investors remained interested in the sector. In Europe, they focused primarily on companies that help corporations build their ability to identify, address and manage cyber threats. 

Talon Companies raised US $100 million, while Cymulate raised US $70 million, both companies based in Israel. 

According to KPMG report, for the last period of 2022, Venture Capital investors are expected to remain cautious. However, they will concentrate efforts on those companies that are part of resilient economic sectors and that show their ability to achieve profitability.

An example is the edtech sector, which experienced exponential growth during pandemic. During 2021, it reached an investment in venture capital close to $500 million dollars in Latin America, according to dato from the BID Lab.

With this, it is expected that in the coming months the industry will consolidate its presence in the market. In addition, investment funds promote their development as a fundamental element to reduce educational inequality. 

On the other hand, robotics is another industry that will remain attractive to Venture Capital investors. Since it is positioned as one of the main alternatives for the optimization of industrial processes.

WORTEV CAPITAL invests in these sectors to encourage innovation in the entrepreneurial ecosystem of the country. Its investment in emerging companies hand in hand with a startup accelerator that supports the operation of ventures in different strategic areas, ensuring their success.

In this way, an ecosystem of investors and entrepreneurs is generated that positively impacts everyone.