10 July 2016

Hot markets for Venture Capital



Venture Capital investment within particular industries is always a good indicator when trying to determine which markets are hot or not.

Using this metric, two such industries, attracting significant VC dollars and competition between VC funds, are:


DISRUPTIVE TRANSPORTATION

Sometimes referred to as ride-sharing or more appropriately car-sharing, the form of transportation popularised by Uber - where anybody with a car can become a taxi - is primed for growth, with VC interest not slowing down despite legal challenges and otherwise.

In June, Uber - the pioneer and market leader in the United States and most of the rest of the world - raised $3.5 billion from Saudi Arabia's leading investment fund, which valued the company at a whopping $62.5 billion. This followed a July refinancing, involving banks such as Morgan Stanley and Barclays, which provided a further cash injection of $1.15 billion.

In December last year, Uber's main U.S. competitor, Lyft raised $1 billion from General Motors among others, valuing it at $5.5 billion.

Now a competitor in China has entered the fold. In June, Didi Chuxing raised $7.3 billion from companies including Apple, which valued the company, which hoping to make an Asian dent into Uber's potential dominance, at $28 billion.


SELF-DRIVING CARS

It seems this phenomenon, trialled by the likes of Google and Tesla, is moving away from the experimental phase.

Interest is massive in companies innovating in this space, as evidenced by a recent $200 million investment into Zoox by prominent VC funds including Lux and DFJ, which valued the company at $1 billion.

This follows GM's recent acquisition of Cruise Automation, a company also in the self-driving space, for an undisclosed sum.


These are too my hot to handle technology industries right now.

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