Venture capital determines how certain markets and technology segments will develop. We have studied the preferences of investors globally and in specific regions and are presenting data on this.
Having analysed venture capital deals over the past decade, our analysts have concluded that the largest amount of money from venture capitalists is being raised in the Internet, software and mobile applications. Over the past few years, industries such as artificial intelligence, blockchain, biotechnology and space exploration have begun to attract attention.
Segments with maximum and volume
Internet technology and e-commerce.
The segment continues to grow rapidly every year with more people buying and selling goods and services online. This growth is partly due to improvements in payment, logistics and delivery technology. The development of these segments has a direct impact on e-commerce, making online shopping more convenient and accessible for consumers.
E-commerce will maintain its current rate of growth at least until the end of this decade: regions of many millions (e.g., South Sudan) are still in the nascent stages of market development and could see multiples of this growth in a short period of time.
Software is used everywhere from computer games and mobile applications to enterprise applications and automation technology. Because more and more data needs to be processed and stored every year, the demand for software will continue to grow.
With the development of mobile devices and high-speed internet connections, the number of people using mobile apps for various purposes continues to increase. Mobile apps can be useful in industries ranging from medicine to finance.
Artificial intelligence and machine learning.
AI and machine learning are used in many fields, including banking, healthcare, transportation, manufacturing, retail and others. The development of AI can significantly improve the efficiency and accuracy of many tasks.
The release of GPT technology in November last year gave a new boost to the segment and increased, manifold, interest in artificial intelligence. The number of people interested in the technology has increased 4.16 times in five years.
The development of new financial products and services continues to attract investment and popularity among consumers. Fintech can offer new ways to pay, invest and manage finances.
Since 2017, Singapore, Hong Kong, China and South Korea have been the undisputed leaders. But this year, 2023, African countries Nigeria, Kenya and Ghana are actively entering the market.
Blockchain and cryptocurrencies.
Blockchain can be applied in a variety of areas, from banking and finance to government and the judicial system. Cryptocurrencies, such as bitcoin, could become a more convenient and secure way to pay and invest, which could lead to further development of the industry.
In light of climate change and sustainable development, energy technologies such as wind and solar farms, energy-saving technologies and energy-efficient devices will play an important role in the future.
Most Eurozone countries, for example, are planning to phase out fossil fuels by 2050 and are actively investing billions of euros to support startups and businesses that accelerate the transition.
Biotechnology is used in medicine, agriculture, industry and other fields and can have a major impact on human health, the environment and food security.
This segment is interesting for investors on its own and as a basis for the development of other technologies. For example, cultured meat - a technology that can reduce hunger on the planet and has more than quadrupled since 2015.
Robotics can be used to automate production, maintain and repair machines and other technical devices, as well as to perform complex and dangerous tasks in various fields.
Combined with AI, this technology will increase the efficiency of production companies and provide investors with a high return on investment.
Space technologies are used in a variety of fields, from scientific research to commercial applications, and could have great implications for the future of humanity.
An example of practical applications is the technology for resource extraction on asteroids. Space objects can provide vast resources that are available in limited quantities on earth.
Overall, all of the above technologies have enormous potential for further growth and development in the coming years and venture capitalists will continue to invest in them to realise this potential.
The preferences of venture capitalists in different regions
nvestment preferences in each region will vary depending on the level of economic development, internet penetration, political environment and many other factors. Panoptic Insights analysts have identified the segments with the highest levels of investment in each region.
North America is one of the most developed venture capital markets in the world. It is on this continent that the tradition of venture capitalism has developed and is worth 40% of the world's total. In 2023, the value of investment deals exceeded $25 billion. The average check on an investment deal exceeded $50 million this year.
Investors in this region typically invest in technology companies from the artificial intelligence, biotech, fintech and cryptocurrency segments. In addition, they often invest in startups with high growth and scaling potential.
South America has a smaller, smaller venture capital market than North America, but the region actively attracts investors in start-ups from the healthcare, energy and fintech segments. In addition, some countries, like Brazil, have seen a rise in venture capital investment activity in recent years.
Investors in Europe have a wider range of interests, including healthcare, energy, manufacturing and other sectors. In addition, Europe has seen an increase in investment in start-ups related to the environment, sustainable development and social issues.
The size of the venture capital market is much smaller than in North America and in 2023 was $592 million with an average check of $2.17 million per deal. Which is significantly less than the average deal in North America.
Asia is one of the fastest-growing venture capital markets in the world. Investors in this region tend to invest in technology companies, especially in China, South Korea and Japan. In China, for example, there is strong interest in investing in start-ups related to artificial intelligence and e-commerce.
Venture capital is at an early stage of development on the African continent, but some countries, such as South Africa, Kenya and Nigeria, have picked up the growth of venture capital investment activity in recent years. Investors in this region are typically focused on investments in the healthcare, fintech, e-commerce and agri-tech sectors.
Venture capital is an international phenomenon, but its characteristics may differ significantly from region to region. However, it is worth bearing in mind that each region may have different approaches due to cultural and legal considerations. In some Asian countries, for example, investors prefer to invest in companies that already have significant revenues, while in the US venture capital is often used to support start-ups in the early stages of development.
If your startup or business is planning to attract investments from venture capitalists in the near future - contact us and we will help you to prepare an investment presentation and increase the company's turnover to improve its investment attractiveness. Choose a convenient time to contact our analyst to educate how our company can help you in this.
Read more about venture capitalism in our article to understand how the investment market works.