(EDITOR’S NOTE: This is the seventh article in a 10-part series capturing the thoughts of Angel and Venture Capitalists who invest in East Tennessee as they look back on 2020 and ahead as we begin 2021.)
What sectors do you believe will attract the most attention from investors in 2021?
- David Belitz, Charlie Brock and Courtney Watson, Partners, Chattanooga Renaissance Fund. For logistics and transportation, as well as digital health, the additional focus and investment from the public and private sectors due to the pandemic will bring significant investment dollars in 2021. eCommerce platforms and products will continue to accelerate, and we will see growth in additional industries towards direct-to-consumer (D2C) – witness the recent “Disney Investor Day.” Businesses which more effectively and efficiently promote communications and commerce between co-workers and suppliers – who are spending much less time in the office, on airplanes and presenting in conference rooms – will continue to be front and center with investors.
- Eric Dobson, Chief Executive Officer, Sheltowee Angel Network. Cannabis is big. Artificial intelligence (AI) is big. Medical devices are big. COVID was the catalyst telemedicine has been looking for over a decade. Online collaboration tools are here to stay and will continue to evolve. I believe virtual reality (VR/XR) will finally go mainstream with some practical applications beyond gaming. And, I expect additive manufacturing to continue its growth in the wake of closed supply chains in 2020.
- Tony Lettich, Managing Director, The Angel Roundtable. Due to the current political uncertainty, this is difficult to assess. However, it is our opinion that sectors to watch closely include AI, business-to-business (B2B) tech, biotech/life sciences, clean energy, cloudtech, and medical technology.
- Kristina Montague, Managing Partner, The JumpFund. According to the ACA, the following industries are considered more desirable by early stage investors right now: (1) life sciences/digital health; (2) mobile; (3) robotics; (4) process automation; (5) security; (6) defense technology; (7) food and beverage; (8) delivery services; (9) hardware; (10) Edu-tech; (11) blockchain; (12) verticalized AI; and (13) collaboration and communications. Companies in industries such as advertising, hospitality, travel, sports, high-end fashion/retail, and leisure are much less attractive for obvious reasons. Also, those companies that have found ways to successfully navigate and even thrive during this period are more likely to be seen as resilient and potentially attractive investments, such as those that have shifted to online sales/service provision, navigated constrictive supply chains, or are addressing real pain points such as financial security, health and wellness, or new remote work environments.
- Grady Vanderhoofven, Founder, President and Chief Executive Officer, Three Roots Capital. In addition to biotech/life science, anything related to facilitating remote work, telemedicine, remote and virtual learning. I also anticipate activity around the ongoing and accelerating “Uberization” of everything – from food delivery to property management to space travel. I think information technology, AI, and cybersecurity will continue to attract a lot of attention. I think food production, food security, and agtech-related companies will attract attention.
- Ken Woody, President and Partner, Innova Memphis. Logistics, the shift to more online shopping/communications/education/everything, agtech which remains strong as investors see pressure on the farming sector in the midst of food safety focus, big data in almost all fields, and healthcare in specific sectors, not broadly.