Since the covid-19 pandemic started creating unstable market conditions around the world, investors have struggled to predict the future of the public market. While some investors are hesitant to invest, let’s remember that start-ups, such as Airbnb, Slack, Instagram and WhatsApp, among others, were founded just after the 2008 financial crisis. Now they are thriving success stories.
In the current crisis we all face, now is still a smart time to invest, as long as investors understand which sectors are doing well and which are set up for future expansion.
Let’s take a look at a few key sectors that we expect to shine as the pandemic continues and when we begin to emerge from it.
E-commerce and contactless shopping
Not surprisingly, e-commerce – already a fast-growing industry – is benefiting from an additional tailwind due to the pandemic. Such companies as Instacart, Postmates and Doordash excel at servicing homebound consumers. New protocols, including contactless delivery schemes, are expected to continue as social distancing measures remain enforced – further adding to their growth.
Start-ups Nuro and Starship Technologies have taken it one step further, creating fully autonomous vehicles that can deliver to your door without human involvement.
We expect such innovations to become more attractive to investors as covid-19 continues to modify global living standards.
Brick-and-mortar stores are also badly in need of makeovers. Businesses that can retrofit their existing stores to provide a “contactless checkout” experience will reap the benefits. We’ve already seen Standard Cognition, Zippin and Aifi convert regular stores to contactless checkout with the help of AI, computer vision and big data analytics technologies.
Online education and e-learning
While it’s hard for online education to replace the classroom environment completely, tools such as Zoom, Teams, WebEx and Skype have enabled the learning experience to become remote.
However, schools still struggle to combine multiple solutions, striving to replicate the traditional classroom experience and combine it with an interactive online system.
Today’s education market demands a complete platform that delivers educational content and facilitates interactions in the classroom. One start-up offering such a demanded platform, San Francisco-based Outschool, has seen major growth recently – alongside similar platforms in other countries such as Byju’s and Topper. Customers have new lifestyle and education expectations, so we expect that demand for such platforms will continue to grow now and even post-pandemic.
We have witnessed for the first time in modern history an environment in which professional leagues have paused their seasons. Some competitions have made an effort to continue offerings without a physical crowd presence, but the experience is simply not the same and audience churn is inevitable.
Due to the pandemic, e-sports start-ups are benefiting from a wave of increased interest as consumers look for sports entertainment even while stuck at home. Start-ups like Sleepr are adapting their product road maps to prioritize e-sports. Twitch, already an industry leader, surged early in 2020, breaking its own records for hours watched and average concurrent viewership.
Another interesting example is PlayVS. The company’s platform allows any high school to build and manage teams, maintain schedules and track stats. Pegasus Tech Ventures just invested in Mobile Premier League, India’s largest gaming app, which offers 50+ games online. As this trend continues, we expect that young people and adults may get even more involved in e-sports activities than they did in traditional organized sports.
Crisis creates uncertainty and it also creates opportunity. Start-ups should consider how to meet today’s demand, evolving their products and services now and in the future. Even when business returns to a relatively normal state, it will forever be impacted by the trends we are seeing in e-commerce, online education and e-sports.
Rather than retreat, now is the time for investors to capitalize on these trends and invest wisely. More so than ever, investors need to understand market trends, analyze deals carefully and invest in start-ups with visionary leadership. By doing so, they will seek a positive return and support ambitious entrepreneurs who are changing the world for the better.
Anis Uzzaman is general partner and CEO of Pegasus Tech Ventures, a venture firm that offers intellectual and financial capital to emerging technology start-ups. He is also the founder and chairman of the Startup World Cup, a start-up competition with a $1 million investment prize. He tweets at @anis_uzzaman.