The last 12 months have been incredible—a long-term bull market in all asset classes, including business capital. Rather than the mini-boom in later-stage investment projected a year ago, it has become a maxi-boom at almost all stages of raising capital.
In 2022, the market will continue to provide new data. Here are two recent happenings to keep an eye on:
Interest rates / Inflation
Bull runs always look to be unstoppable until they aren’t. Enterprise capital has benefited greatly from ultra-loose financial coverage, which has increased the amount of money available. Inflation seems to be picking up speed, which may signal the end of more than a decade of exceptionally low-cost money if matched by higher interest rates. Because funds contain significant dry powder, the impact on businesses seeking finance is unlikely to be realized immediately. Control the time it takes to close fresh funds and their eventual size, though, to receive a health check on the trade’s long-term trend.
The Squeezed Center is a small, cramped space in the heart of
Usually used to describe low-income families trying to make ends meet, this term may also apply to the heart of the capital structure, where Collection A funds operate. With more money than ever racing after companies with early revenues and strong evidence of product-market fit, the upward price pressure this year looks to be poised to continue. This might be uncomfortable for traders, but it continues to be a fantastic market for business owners.
Because the impact of the pandemic is still being felt, traders should pay close attention to the top six industries that seem to be on track for a strong 2022.
Work’s Path Forward
The pandemic-enforced hybrid work is only the beginning of the basic alterations in this industry. The emergence of globally scattered organizations and the knowledge necessary to support them will be a major driver of growth in this sector in the next year. The transition from traditional full-time employment to the freelancing model, which allows people to control their work-life, would also be beneficial. The freelancer market looks to be on track to grow at a double-digit CAGR for at least the next five years, opening up many opportunities to build up the best infrastructure for the freelancer economy and auxiliary services.
EdTech has been a sector that many entrepreneurs and traders have battled with over the years despite a few big triumphs. The issue has always been resolving the question of who pays. Most universities and academic institutions should not afford many technological solutions. Nonetheless, amid the most intense struggle for expertise in many years, training is making a comeback. Entrepreneurs are exploring new ways to make training pay off, whether via possibilities for upskilling and keeping existing employees or by continuing to teach freelancers.
Weather in the area
The COP26 conference in Glasgow demonstrated that politicians are somewhat prepared but not quite ready. Step on the world’s climate tech entrepreneurs to build businesses that can make a real difference and help us achieve the world’s aspirational ‘internet zero’ goals. When you combine this with the financing community’s increased scrutiny of ESG rules, you’ve got the perfect recipe for more capital funds going to ClimateTech firms in the next year. This year, the Climate 50, a dedicated assessment of investors in the sustainable energy transition, was launched, adding to the growing momentum.
Take care of your health.
The pandemic has had a constant influence on the best method health care providers are provided, just as it has on the job market. As national health providers continue to cope with pandemic prevention and treatment, the supporting changes triggered by the pandemic for health IT entrepreneurs are expected to continue beyond 2022. Startups that focus on areas like remote patient management for severe diseases or striving to eliminate frictions in research and drug development are particularly well-positioned to benefit from more investment and less inertia from their prospective investors.
The use of technology to reduce dependency on humans or completely replace them continues to benefit from two tailwinds. First, we’ve reached a point where technology can consistently reproduce a wide range of human activities. Although we are still a long way from AGI (Artificial General Intelligence), machines may now reliably carry out business and industrial procedures. Second, labor shortages that emerged this year as the global economy recovered from the epidemic are expected to endure. There were formerly concerns that automation would result in job losses. Today, businesses need technological solutions just to keep their operations running.
Chain of Supply
The post-pandemic recovery has shown us how vulnerable the world’s supply systems are. This throws up enormous opportunities for entrepreneurs, who can use cutting-edge knowledge to solve problems that larger, slower-moving corporations struggle with. Whether it’s the adoption of cutting-edge transportation technologies or the actionable insights derived from real-time big data analysis, there are crucial funds available for businesses that can keep the world’s goods moving once again.