To Understand Business Trends, Look at What’s Been Funded
Over the past few months, investments have slowed – largely due to COVID’s impact on the economy.
However, the first week of June was the busiest week yet for 2020. Scheduled IPOs, investments, and acquisitions surged, and it made us think: As the economy continues to rev back up, what industries are seeing the most activity? And do the trends point to a bigger economic shift happening before our eyes?
We decided to follow the money over the past few months and publish our team’s insights.
Below are the industries that have been funded handsomely, along with some must-watch companies. All funding numbers have been pulled from Crunchbase.
Innovation in Healthcare Costs & Treatments
Unsurprisingly, healthcare startups have been booming for years, and COVID only accelerated this trend. Because there are so many problems and opportunities around health and wellness around the world, we believe money will continue to flow to startups disrupting these healthcare networks.
Some of the more obvious problems in healthcare (at least in the US) are cost and access to care. Startups that are aiming to solve these problems include:
PlushCare: This virtual primary care platform recently received $23 million Series B funding which will allow them to double their team and market to the public.
OmadaHealth: Another digital platform, OmadaHealth is trying to solve the problem of costs associated with chronic diseases. In May 2020, they raised about 57 million dollars to expand operations and acquire Physera.
Besides affordability and accessibility, there are exciting advances in the treatment of disease. Some recently-funded startups in this space include:
Rallybio: Rallybio is a biopharmaceutical company that is developing “life-transforming therapies for patients with severe and rare disorders.” In April, they received 145 million dollars in series B funding.
MGI – MGI, located in China, focuses on DNA sequencing products that support a number of industries, including healthcare. They’ve received 200 million dollars in funding over the past two years, with their most recent round in April 2020.
Bigfoot Biomedical – Bigfoot Biomedical specializes in diabetes management, administering insulin based on personal health data and algorithms. Earlier in 2020, they received 45 million dollars in funding.
NodThera – Their mission is to treat inflammation, a massive problem among chronic disease patients. On June 3rd, 2020, they raised 55 million.
TAE Life Sciences – TAE is leveraging Boron Neutron Capture Therapy to treat hard-to-treat cancers. They got 30 million in early June 2020.
The Affordability Crisis
Other companies that have been consistently funded over the past year are startups looking to address the affordability crisis. The “Great Affordability Crisis” was coined earlier this year by The Atlantic (although it has been around for years), but it’s based on the fact that 1 in 5 adults can’t pay their bills in full each month. What’s considered necessary to modern life has been growing despite wages essentially shrinking, which leaves less money circulating in the economy.
To address this, there are a number of startups innovating to make things affordable or increase the opportunity to make money.
United Dwelling – United Dwelling is a startup trying to reduce living costs by allowing homeowners to build accessory dwelling units on their properties. They’re starting in Los Angeles, CA but will likely expand if successful. They raised 10 million dollars at the end of May 2020.
Smarterly– Smarterly is empowering businesses to give their employees workplace savings accounts. Employees can better save for life events like marriage, homeownership, or healthcare costs. They raised about 7 million at the end of May 2020.
Neobanks – There are a number of new, digital banking platforms looking to attract low-income users. They promise things like no fees, early paycheck deposits, and savings buckets.
Divvy Homes – Divvyhomes is trying to help renters become homeowners by turning monthly rent payments into a down payment. In late 2019, they received 43 million in series B funding.
Diversity in Business
As the #BlackLivesMatter movement gains additional support, mega-corporations have committed to helping minority-owned businesses. The biggest announcement in this arena was SoftBank, who announced a $100 million Opportunity Growth Fund that will invest in companies founded by people of color.
Historically, 77% of funded startups have white founders, which perpetuates systemic racism and opportunity cost. A forward-thinking program like this could actually make a difference in minority-owned businesses.
Taking Action on Climate Change
Finally, there were two noteworthy investments in carbon capture this past year. While this industry has a long road ahead of itself (costs, anti-science, inaction), we hope that these investments show general support of the technology required to keep our planet healthy.
Climeworks – Climeworks allows users to subscribe or make a one-time purchase to offset their personal carbon footprint. On June 2, 2020, Climeworks got CHF 73 million in series unknown.
LanzaTech – LanzaTech is working to capture carbon from the atmosphere and then recycle it into everyday items. They received 72 million dollars in 2019.
Whether you’re looking to invest, start a business, or simply adapt to market demands, this list is a good place to start. We can clearly see that some of the biggest problems worth solving are financial stress, health and wellness, minority representation, and environmental impact.
Understanding these trends can give you a leg up on competitors, especially as 2020 continues to shock and surprise us in our personal and professional lives.