Entrepreneur

Dear VC, What Trends Are You Betting Your $$ On In 2019?

We’re only in the second week of 2019 and things are already in full swing. As entrepreneurs and their businesses prepare to take on new and exciting challenges, the exact same goes for the funding game, where businesses both small and large vie for the necessary capital to take their ideas to new heights.

With so many expectations and predictions for tech and entrepreneurship in the coming months, we thought it would be interesting to see how all of this could end up playing out in the venture capital game. We asked a few VCs from reputable firms their opinions about which trends will be big in 2019, and which ones they intend to focus their investment dollars on.

Damian Tan, Managing Director at Vickers Ventures Partners

Image Credit: Vickers Ventures Partners

Q: Damian, what trends or sectors do you think will be hot in 2019, and which of these will your firm be keen on?

Taking a broad look, health is a great sector with huge amount of discoveries and disruptive opportunities. The integration of AI, nanotech, IT, and biotech has provided ways of keeping human life spans longer and more productive.

Humanity needs to live healthy and wants to live healthy, so the demand will always be there.

Areas in which we have reached the human bottleneck in terms of solving a problem, example is a call center which today is not responsive enough and throwing more bodies into it doesn’t work. AI and virtual reality solutions with deep expertise will eventually become smart and human-like to augment human labor, so deep tech AI in specific domains will be very promising.

These two sectors alone can cover an extremely wide range of opportunities and inventions.

In a broad sense, we (Vickers Ventures Partners) are not country specific. We look for disruptive innovation with disruptive scalability in general and with a focus on deeper technology that provides a big barrier to entry. What we prefer not to get into are business models that compete on price and a war chest of capital.

Visit the official Vickers Ventures Partners website here.

Rachel Lau, Managing Partner at RHL Ventures

Image Credit: Bloomberg

Q: Rachel, please tell us about the sectors you feel are going to do well this year.

I really think Fintech—with online wallets and the ability to process real-time transactions—will be all the rage in 2019. These newcomers—and others aspiring to follow in their footsteps—will threaten the rule of financial incumbents, as they may continue to offer better financial products to consumers, empower more efficient payment channels and cultivate a more open financial system.

There will also be an increase in cross-industry collaborations to better understand the consumers and cater them a more personalised product or services. This is because personalisation is inspiring new product features and shaping preferences for services that are otherwise one-size-fits-all.

Globally, we also expect much the following trends.

Internet of Things—this may include wearable devices akin to FitBits and Apple Watches that can gather data from users and monitor them in real-time.

Urban farming and socially-responsible food production are two others. Think burger patties made from nuts and plants, as well as innovative tools to grow plants and fruit locally.

You also think about healthy snacks—with ongoing health concerns and demand for clean socially responsible products, snacks made from insects will be fun and interesting, as they are already staples in countries such as Thailand.

Of course there’s also artificial intelligence. AI companies are raising significant capital. With a race in autonomous driving still on-going, developments in AI-powered chips, architecture and software will mostly likely continue booming in 2019.

Finally you have energy storage and efficient electrical systems or components. With the growing renewable energy sector, the demand for better and cheaper methodology to store energy will increase. There will be more start-ups looking to develop breakthroughs in battery systems, for example solid-state batteries.

Q: What is RHL planning to focus on for 2019?

RHL will be focusing on both tech and non-tech (brick-and-mortar) startups. It would be good to maintain a balanced and synergised portfolio to see and understand every aspect of a startup.

Southeast Asia and Malaysia has been relatively behind when it comes to tech and are always playing catch-up. So, places we’re looking into are:

Logistics and fulfillment services: with the rise of e-commerce, there will be more demand for better and more efficient fulfilment and logistics systems. This will create opportunities in terms of last-mile delivery, warehousing support, cross-border deliveries and/or software-as-a-service solutions.

Fintech and e-payments: In Malaysia, the Fintech race is still ongoing with the likes of Boost, GrabPay, Maybank QRPay and the Touch ‘n’ Go E-Wallet. A lot of start-ups in this space are springing into action and it will definitely be an area to venture into for both front-end and back-end startups.

Esports: Malaysia’s new Youths and Sports Minister, Syed Saddiq, is bringing esports into the limelight, especially after the hosting a Dota 2 Major tournament in Kuala Lumpur. Hence, there will be a boon to the adoption of esports and games in this country. Interesting places to look at include live-streaming and professional gaming teams.

Renewable energy and biodegradable products: With Malaysia’s new Minister of Energy, Science, Technology, Environment and Climate Change, Yeo Bee Yin, focusing on renewables—particularly on solar projects and the recent ban of plastic straws in our country—there will be growing opportunities for start-ups to enter into this space.

Visit the official RHL Ventures website here.

Justin Hall, Partner at Golden Gate Ventures

Image Credit: Golden Gate Ventures

Q: Justin, what trends do you think will take flight in 2019, and which of these will VCs be particularly drawn to?

An increase in logistics and supply-chain focused startups will be one of many defining trends for 2019 (and likely beyond). We are really only scratching the surface of scalable, efficient, inter-country logistics and supply-chain platforms.

There’s also logistics and supply-chain technologies; micro and alternative financing will become more numerous and complex; micro-insurance will emerge as a serious trend; and products and services catering to and exploiting gig economy platforms. This list is not exhaustive.

Q: What will Golden Gate Ventures be focusing on in 2019?

We’re looking at all the startups and entrepreneurs in those categories. As Southeast Asia becomes richer, consumption will increase, placing a greater strain on existing logistics and supply chains.

Moreover, the financing requirements of consumers will consequently need to become more flexible and customised: indeed, consumers will eventually learn to expect that level of granularity in their products and services.

Visit the official Golden Gate Ventures website here.

ST Chua, Principal at SunSEA Capital

Image Credit: SunSEA Capital

Q: ST, can you tell us which sectors will be extra prominent in 2019 from a VC’s perspective? What particularly excites you?

I think there are the five areas to pay attention to!

The first is urban mobility and logistics—developing countries need sustainable solutions to tackle congestion, people movement and also inefficient flow of goods. We expect to see more innovation, be it from e-scooters to drones to participants in the gig economy who delivers anything.

Next is healthcare—with rising consciousness for healthy living coupled with the huge growth of smart watches and monitoring devices, we expect to see more innovation in this space, which will use data and personalization from medical insurance to telemedicine to other innovations such as promoting healthy food intake.

Third is artificial intelligence—with the rise of chatbots in the service industry to smart voice control devices to adoption of Robotic Process Automation, we see a high potential in this space as business cases are generally quite clear cut in terms of costs efficiencies and productivity.

Then you have the disruption to old economy. These include further improvements from the old way of doing things by using technology, for example buying a new car or house entirely online. Imagine you can just click and the new car arrives at your door.

And then finally you have financial inclusion—growing alternative methods of loans and proliferation of e-money allows for financial services to reach segments that have not been the focus of traditional financial institutions.

Besides the above mentioned, Sun SEA Capital will also look for sustainability-focused startups in view of the challenging market conditions and those which can contribute to solving urbanisation challenges, and accelerate the development of smart cities, such as Sunway’s.

Visit the official SunSEA Capital website here.

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  • Dear VC is a series where we get experienced venture capitalists to answer startup, funding, and venture capital-related questions from our readers. If you have a question you’d like to ask, please fill out our questionnaire here.
  • You can also find more investor insights by reading our previous Dear VC segments here.

 

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