Are you in Mozambique? Is Cyclone Kenneth bearing down on your neighbourhood? Of are you simply searching for answers for the questions you have…
This year promises to be an exciting one ahead for SA startups and those in the startup scene — with lots expected from sectors like fintech, healthtech, Internet of Things (IoT) and South Africa’s VC market.
Here then are my top nine forecasts for 2019:
Fintech at a fast pace: Fintech has spread across the globe, and I predict that it will continue to grow rapidly, with a larger focus on API-driven tech solutions. Flexibility and adaptability of tech across sectors will be an important factor in penetrating new markets.
Data, data, data: Data is going to continue to be at the crossroads of all decisions for early-stage investors. Startups with the ability to take data-driven solutions to market – while executing the smartest of these solutions – will be some of the early, big winners.
Digitalising healthcare: The health-care sector is a huge market for young tech startups. Digitalising the sector should be at the top of everyone’s minds, as this arena in South Africa and globally is still quite behind, in some ways — generally speaking. As the industry begins to catch up with available tech solutions, there exists plenty of opportunity for startups to bridge the divide.
Insurtech will gather momentum: There will be strong growth in insurtech, and specifically lifestyle tech solutions which are more consumer-centric. It’s a hungry space for the large insurers so I’d expect increased corporate venturing from some of the big names!
The VC market needs more wins: A few corporate venture arms have been introduced recently in South Africa, and this trend is likely to continue as venture capital (VC) becomes more mainstream in the corporate world. Just don’t hold your breath on some of the pension funds. The reality is that venture capital needs more wins – and proper exits for investors – before institutional investors will really take a keen interest. That being said, there are already a few institutional-type investors with an appetite for venture capital.
The SA SME Fund: The SA SME Fund, under its new leadership, is going to make some good headway this year in getting behind venture firms and backing the SME ecosystem. Early worries were that this was going to be the new beat to the same old private equity tune, but the new CEO has made it clear what he’s backing (see here and here). And that’s good news for venture capital and the SME market.
Smart Cities and IoT devices: A common theme that will continue into 2019 is the generation of smart cities and the connectivity of Internet of Things (IoT) devices. But will this really light up? It will be up to innovation teams within corporates, or startups backed by deep pocket investors, that are prepared to weather the long lead cycles required to penetrate the market. Or perhaps these startups are best suited to other regions where there is a more open market, and where the best product at the best price wins the bid. Only time will tell.
Crypto on or crypto off?: Crypto had a rather tumultuous 2018 and many are questioning the sustainability of this asset class. While there have been some big losses, the disappearance of crypto is unlikely. Crypto will find a home as soon as there are some more valid use cases that support wide-scale circulation. I believe that we’ll find other use cases for crypto as blockchain heats up and gathers momentum, and when we do, it will be like the re-invention of the internet.
Everyone has a role to play: The startup ecosystem isn’t built on one subset of stakeholders. From startups to accelerators, angels and VC’s, corporate and institutional investors; every person is needed to play their role in scaling the startup ecosystem. I foresee greater collaboration this year across the board, and an increasing number of syndicated co-investors to support this scaling.
Gavin Reardon is the founder of Kingson Capital, a registered Section 12J Venture Capital Company (VCC) founded in 2015.
Featured image: mohamed hassan via Pixabay