Sifted readers predict what’s in store for 2021

As Featured in Sifted

Earlier this week Sifted made some predictions for what will be happening in the world of European tech startups in 2021. 

We said 25 startups will become “unicorns” worth more than $1bn; startups will raise $50bn in VC money; 90% of funding will go to all-male teams and Klarna will claim to be the next Amazon.

Then we asked our readers to supply some of their own predictions. And this is what they came up with. Thanks to everyone who sent in replies!

Telemedicine’s boom will face troubles

If telemedicine companies wish to continue to grow and survive longer-term, they’ll need to ensure a high-quality user experience and find ways to make their services effective for everyone. The ‘digitally excluded’ or most vulnerable in society are likely to be more isolated than usual, even as the arrival of vaccines hastens a return to some sort of normality, and must not be forgotten by these service providers. The high-quality telemedicine services will need to find ways to stand out in a crowd of many that some may say set a low bar for standards. 

Michael Niddam, Managing Partner at Kamet Ventures

Fintechs will see big opportunities to raise less equity and more debt

With all bonds at their lows and still a lot of cash available, institutional investors and family offices are looking more and more to alternative investments and many fintechs are basing their business model on this. Klarna, ScalaPay, Afterpay and all the other Buy Now Pay Later platforms need debt to finance their models.

Luca Ascani

The year the fintech ecosystem embraces ‘DeFi’

2021 will see an influx of users and capital into the decentralised finance (DeFi) ecosystem, accelerating growth in the user base over and above the 11x seen in 2020. Current positive crypto price trends, the growing universe of DeFi applications and ongoing low-interest rate environments in the traditional finance world will support this momentum with both new and more-seasoned crypto investors engaging with DeFi to discover more value from their assets. In 2021, the fintech community will spend time learning more about DeFi and further recognise its disruptive potential in relation to traditional finance. With a foundational understanding built in 2021, enterprise and institutional use cases (along with greater VC investment) will follow in years to come.

Tim Levene, CEO of Augmentum Fintech

No remote working means no employee retention

With continued economic challenges, many startups won’t be in full-on hiring mode, which means they may well overlook the impact of offering remote working in keeping their best people. 

Almost all the candidates I talk to, particularly at the senior end, won’t entertain going back into the office full time. Whenever coronavirus makes office working more acceptable, those startups that have failed to keep up with the long-term demand for flexible working will find they have unplanned hiring needs because their best people are moving on, rather than being told to be back in London five days a week.

Alan Furley, Director of ISL

Invisible founders will struggle to hire

A lot of the startups I saw hire well in 2020 did so because their founders had a strong digital presence, typically on LinkedIn or Twitter. Candidates looking to join a startup regularly cite the power of attraction from the founders. Despite there being a lot of people on the market, many of the best people won’t be applying through job boards. They will talk to the companies where they understand what’s it’s like to work for the founder, and the best way they can make that judgment is by reading their posts, seeing their videos, understanding the journey they and their startup is on.

Historically founders could show their personality at interview, but the buying journey for a new job is increasingly mirroring how consumer goods are bought – a lot of the research and decision making is being done online. Those founders that need great talent but make it hard for people to get to know them digitally will find they never get to see the best talent.

Alan Furley, Director of ISL (again)

We’ll see a rise in low code platforms

One arguably under-reported trend of the last half-decade has been the emergence of low code development kits. First-time founders who have little technological expertise can now access tools which allow them to plan, develop, and create their own applications and websites. 2020 saw a record number of new businesses being founded and these tools will only become more popular in 2021. 

Ritam Gandhi, founder and director, Studio Graphene

The year of big thinking on cybersecurity

Without question, COVID has accelerated the pace of digitalisation – and this presents an unprecedented cybersecurity challenge. The reality is that cybersecurity companies cannot scale or cope with the exponentially rising demand for testing and interrogating new and ever-changing digital assets. And this new challenge offers significant opportunities for cybercrime actors and hackers.

One answer – crowd security platforms, often referred to as Bug Bounty Platforms, which invite and qualify thousands of ethical hackers to continuously test and check for vulnerabilities in their customers’ IT and cloud assets. This crowd is rewarded by so-called bounties via a new “no cure, no pay” approach. Leveraging the crowd of ethical hackers is the only way to properly scale cybersecurity defence in response to the ever-increasing threat of cybercrime.

Remy de Tonnac, Partner, ETF Partners

We’ll see more and more startups

A lot of people have unfortunately been made redundant and we can expect that many of them will have to take their future in their hands by becoming self-employed and by starting businesses — many great companies have been started in down turns after all. 

Angelika Burawska, COO, SFC Capital 

The pandemic will trigger long-term shifts for VCs

The coronavirus pandemic will lead to several long-term shifts in VCs’ investment strategies in the new year. Firstly, after a widespread slowdown in investment activity during the first four to six months of the pandemic, VCs are sitting on record amounts of dry powder, or committed, but unallocated capital. This will lead to heightened pressure to invest in 2021 — with one key focus including startups that empower distributed work, collaboration and meet-ups. We’ve seen this with startups such as London-based online events software company Hopin and Berlin-based video conferencing startup Wonder both raising funds this year. 

Iskender Dirik, MD and GM, Samsung Next Europe

We’ll see an increase in exits

Initially big corporates will be reluctant to invest and spend millions to acquire startups. But companies will realise that acquisitions are the fastest way to spark innovation and grow again so there will be a wave of exits in the second half of the year. Startups that have products that are well suited for a post-coronavirus world will be in high demand and will drive high prices.

Joseph Zipfel, Chief Investment Officer at SFC Capital 

Coronavirus will change attitudes towards big tech

The coronavirus crisis exposed more than ever the personal data dilemma. While China moved towards a total control of personal data and reportedly showed the most effective way to fight against coronavirus, Europeans were ready to sacrifice economic growth and keep a more protected approach. It is not a question of technological advantage, it is a question of culture and a choice of the further development of society. The pandemic will have a significant impact on the further approach of EU institutions towards big tech as well as how the digital Euro will shape up in comparison to other digital currencies, including Yuan. 

Guzel Gumerova, Investor

The rise of the venture studio

The “venture studio” combines the benefits of an Accelerator, with a program that has a mentor and advisor network available to the founders and more hands on investors (using entrepreneurs in residence).

If the John Lennon of startups brings an exciting SaaS idea to a Venture Studio, we supplement his core team with Paul, Ringo and George. We have a recording studio and money to make that first album – and even supplement services (radio station) that could play the first single.

We also allow John and the gang to focus all their time and efforts on building a great product instead of learning the art of the pitch and chasing investors for the pre-seed and seed rounds. It’s still early days for the venture/ startup studios but this is a trend that will continue to grow and replace the current early-stage programs out there. I’m banking my money on it.

Kári Thor Runarsson, CEO and founder

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