The past 12 months were a blockbuster year for venture activity around the world, with 2021 breaking records in both fundraising, capital deployment, exit valuations and returns. For the global investment team at Beringea, 2021 exceeded expectations, with a record-breaking $82.6 million invested and exit valuations of more than $4.4 billion.
Now, our investors on both sides of the Atlantic look ahead to the sectors, trends and macroeconomic conditions that they’ll be monitoring closely for the rest of the year.
The “circular economy” goes mainstream
William Blake III, Vice President, Beringea U.S.
With a sustained emphasis on ESG issues, and global supply chains for new products stalled for a third year by the pandemic, look for an increased focus on platforms, systems and products that reuse, redesign, and repurpose existing materials for as long as possible. Innovative startups offering sharing, leasing, reusing, repairing, refurbishing and recycling can expect to attract significant venture investment dollars in 2022 as individual and entity-level adoption of the circular economy takes hold.
In the Beringea U.S. portfolio, Floyd has focused on sustainable design and production to combat the “disposable furniture” phenomenon and give its products longer and more useful lives.
Searching for connections: the rise of remote working and mental health concerns are creating the need for new approaches to community-building
Mark Shepherd, Investment Manager, Beringea U.K.
Despite the ability and attraction to work from anywhere in the world, there is one key thing missing from the excitement of spending a month in the Alps, or Portugal...For many people this is social connection and a community. A very famous study from Havard University over 79 years revealed “It turns out that people who are more socially connected to family, to friends, to community are happier, they’re physically healthier and they live longer than people who are less well connected”.
So, although it is exciting to go and work abroad from a beach, for many people the attraction sours quickly as soon as you realise you know very few people, you don’t have your friends or family around you and you miss that social connection. This is therefore where I see a huge opportunity ahead, as the ability to build communities, ‘office cultures’, and connections - while living the nomad lifestyle - helping to support the proven community benefits to people’s mental health. A new wave of community and connection is upon us and this community creation will be integral to ensuring the remote lifestyle is here to stay.
That is why I’ll be looking into the communities and platforms seeking to rebuild connection and help us to get back in touch with one another. Yon Living, a platform providing access to flexible stays in community workspaces around the world, is a great example of where I see us heading.
Continued advancement of automated workflows and AI supporting healthcare research
Michael Gross, Managing Director, Beringea U.S.
Legacy data sets hidden in file drawers contain a treasure trove of historic information that academic and healthcare institutions, research organizations and pharmaceutical companies can’t efficiently use to drive innovation. Coupled with an explosion of new data procured by genomic research advancements and machine learning, the market value of organizing and integrating healthcare data using technology can’t be underestimated. Venture investors will continue to be interested in platforms that consolidate and disseminate databases to researchers worldwide, supporting the development of more effective disease treatments and therapies.
Beringea U.S. portfolio company Flywheel accelerates collaboration, enables machine learning, and streamlines the massive task of data aggregation, curation and management for life sciences, clinical research, and academic research industries.
Waste, construction, supply chains: innovating in the unglamorous industries
Luke Edis, Investment Manager, Beringea U.K.
Some industries have long dominated the imagination of venture capitalists. Consumer, B2B SaaS, Fintech, and AI – there are plenty of sectors that have captured the attention of hotshot founders through the innate glitz and the glamour of what you’re building.
There are some industries, however, that may be less easy on the eye, but they’re certainly no less of an opportunity. In 2021, I led the investment of Beringea’s U.K. funds into Litta, a marketplace for managing waste collection and rubbish removal to help address the UK’s significant fly-tipping problem. The Litta founders had spotted an industry where the user experience was sorely lacking, the incumbents had come under little competition from start-ups and digital innovation was urgently needed for sustainability.
There are many adjacent sectors that suffer from similar dynamics, and there are businesses that have already begun to make significant headway in tackling these inefficiencies. Already in 2022, we’ve seen Flexport in the U.S. raise $935m to build a more efficient and digitally focused global supply chain, and RenoRun raise $142m from Tiger to provide an e-commerce/delivery platform for construction materials. I believe there are many further opportunities to come in difficult, knotty, and unglamorous sectors such as construction, logistics, and industrials, which will likely often be spurred on by sustainability tailwinds.
Democratizing expertise and access expands markets and increases efficiencies
John Bonhard, Vice President, Beringea U.S.
Democratizing highly-technical skills with software, including user-friendly experiences, simple interfaces and visualization of complex data, has dominated the SaaS/Cloud Software market in recent years. Companies like Canva, SquareSpace, Shopify and others have clearly shown value in these solutions for customers and investors; expect to see venture investment in platforms bridging the gaps in expertise and access – enabling more people to do more things – in 2022. I expect content creators, through new video editing and production software, and retail investors, through crowdfunding, DAOs, and other web3 applications, will be meaningful benefactors in this next wave of innovation. Low- and no-code platforms and tools will continue to emerge and drive value in the enterprise – robotic process automation, business processes and marketing communications are all ripe for exploitation in this market.
Beringea U.S. portfolio company dscout has distilled the complexities of high quality, highly technical research into a high-functioning tool for non-researchers to leverage across functional areas of an organization.
Sustainability: moving beyond batteries towards circular industry
Maria Wagner, Partner, Beringea U.K.
Investing in protecting the future of our planet is nothing new. Over recent years, investors in public and private markets have bought into the vision of companies tackling the energy transition, from Bulb through to Tesla. In 2021, Northvolt – the Swedish battery maker – raised a vast $2.75bn of investment from the likes of Goldman Sachs, Volkswagen, and OMERS to scale up production for what it calls “the world’s greenest batteries.” Although the first wave of climate investment has been in energy and transport which are easier to link to environmental impact, we must keep pushing ahead with greater sustainability throughout our industries to address the climate crisis.
I believe this can be driven by circular industry – taking what we’ve learnt from the impact of the circular economy in retail and groceries into heavier industries such as manufacturing and supply chains. We know a lot about this business model at Beringea, having backed the likes of Luxury Promise, MPB and Watchfinder. We now must think about how our manufacturing processes could re-think, re-use and re-cycle resources in a similar way, and I’ll be looking for companies embracing this approach to industrial production.
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