Last year and during the early part of this year, many VCs and others in the community I spoke with talked about how an economic slowdown is imminent.
The covid-19 pandemic not only triggered that outcome but exacerbated it, bringing with it a lot of uncertainty as to what venture will look like at the end of the year.
As such, we’ve kept our eyes on certain sectors to see how they fair in the coronavirus-fueled slowdown.
Take for example cybersecurity. It’s easy to see why this sector is poised to boom. When shelter-in-place orders went into effect, entire work forces overnight shifted to their new work-from-home lifestyles, meaning that a lot of employees are now working on unprotected home WiFi networks and their conversations and notes could be compromised.
I contributed to a story we posted earlier this week on how the covid-19 lockdown is making many reevaluate their security needs.
Not surprisingly, as many continue WFH, cybersecurity is one of six sectors currently booming, with first-quarter funding reaching a near record of $1.5 billion, an increase from the previous two quarters. That’s according to the Opportunity Index Report put out by Crunchbase. The organization said that nearly 80 percent of the Q1 deals were seed or in early-stage companies, meaning we can expect to see an increase in later-stage deals down the road.
Joining cybersecurity in the six hot sectors in Q1 were telehealth, remote meeting/collaboration software, med/biotech, payments and edtech.
Last week, I spoke with Robert R Ackerman Jr, founder and managing director of AllegisCyber, who told me that he held a summit earlier this month with three chief information security officers to hear how they were coping with changes at their companies brought on by covid-19.
“What was intriguing to me was one unanimous reaction: the covid-19 pandemic has forced a massive experiment in the work environment due to the work-from-home challenge,” according to Ackerman, who added that the CISOs predict at least 50 percent of all corporate workforces will eventually WFH, though in most cases not every day but on a staggered schedule.
That tells me that cybersecurity and the remote meeting/collaboration software sectors are poised to continue to see increased funding.
Let me know what you think. What are your thoughts on interesting sectors to watch? If you have news or views you’d like to share with me, I’d love to hear from you. You can reach me at firstname.lastname@example.org and I’m open to voice and video calls.