The 5 Hottest Industries for Venture Deal in 2015
I recently moderated a panel on IP and the Art of Successful Deal Making in San Francisco. Panelists from large and reputable technology companies like Twitter and Google shared what kinds of deals were made in 2015, what challenges they presented, and where new opportunities lie. Below is a list of five innovation and deal areas that have been hot in 2015, which will likely continue in the future.
In decades past, technology companies focused on increasing user adoption of desktop computers. But in the modern era, computing - and the Internet - has gone mobile.
In fact, outside of the United States, many first-time online users skip the computer stage altogether and jump straight into mobile, often through apps. Many of today’s deals are focused on compelling mobile users to use their phones more often, and for more parts of their lives, from banking to logistics. Given the amount of money in the mobile space worldwide, it is expected that mobile deals will continue to grow.
The eCommerce pie is growing worldwide and at a faster rate outside of the United States. For example, the Singles’ Day or Guanggun Jie (光棍节, literally: “bare sticks holiday”) has become one of the largest online shopping days in the world. Sales on Alibaba’s sites Tmall and Taobao were at US$5.8 billion in 2013, US$9.3 billion in 2014, and over US$14.3 billion in 2015. Many companies are eager to have a piece of this expanding eCommerce pie both inside and outside of the United States.
SaaS & Cloud
SaaS or cloud-based deals remain popular. Among many other reasons, the SaaS solutions are often cheaper than other alternatives, require no major infrastructure investments or technology, are designed to be scalable across both large and small organizations and teams, encourage collaboration for global teams, are generally easy to use and don’t require a lot of technical knowledge and experience. Thus, we have seen a proliferation of SaaS tools, which is unlikely to slow down any time soon.
Internet of Things (IoT)
The IoT is increasingly attracting attention because companies are now seriously considering devices beyond just computers and smartphones. Many deals are focusing on the increased use cases and implications of the Internet of Things.
We have seen this growth despite the challenges of data infrastructure from the vast proliferation of sensors and devices. According to an International Data Corporation (IDC) report, the worldwide IoT market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020 with a compound annual growth rate (CAGR) of 16.9%. Given the infancy of this industry, it is almost certain that we will see more IoT deals for many years to come.
Data and Analytics
Given the proliferation of mobile, eCommerce, SaaS/cloud, and IoT deals, naturally the data and analytics deals generated from these and other deals have created a booming deal flow in data and analytics.
According to the panelists, these deals generate many challenging discussions. For example, safety and privacy of the data is a common concern. The ownership of data and analytics is often another difficult issue to sort out.
Originally published on Startup Grind, the global startup community.