Where will your angel capital go in 2021?

Without a doubt 2020 was a difficult year. Apart from healthcare, there was one clear industry which clearly thrived: digitalisation, e-commerce and anything related with remote working excelled beyond anyone’s expectations.

Even though most companies had already embarked or were on some sort of digital change, COVID-19 meant a rapid acceleration of this incredible transformation. With many of us confined to our homes, the world switched to a more virtual and delivery-style setup, with those companies unable to conform to this “new” standard losing out completely.

So for this new world, we look forward to what we think will be some of the interesting trends in the startup world, fueled by technology, entrepreneurial spirits and the relentless need to fight a worldwide enemy.

Low and/or no-code boom
Low or no code development platforms provide drag-and-drop tools that enable businesses to develop software quickly without coding or without the need to learn coding languages.

For those of us who studied anything other than coding or digital careers, companies offering the possibility to build digital products with low or no-code are truly attractive. These companies allow less digitally-savvy people to incorporate digital products in many traditional industries without the need of outsourcing or hiring costly resources. Companies such as Airtable, Appy Pie, Bubble, Webflow, Zapier or even Salesforce are expanding their offerings in this area and should continue to do so, and can really help the startup scene to develop MVP faster.

Automating marketing efforts, off-the-shelf algorithms, drag-and-drop images and art, databases and data crunching, and many more are just the start for no-code tools, enabling many companies to rise to the digital world without outrageous costs.

As an angel investor, it is good to understand low code as well as expect founders to use these types of solutions at early stages of development.

ESG and sustainable investing
Environmental, social, and governance (ESG) investing has been around for many years and its popularity has been increasing steadily. Never before has the environment or the ethically correct investments been more popular.

With trillions invested in 2020 in sustainable assets, there is no doubt that VCs and entrepreneurs will keep on investing in ESG. Even more so, the election of President Biden in the United States will put the US back on the forefront of impact policy and make the environment part of the government’s agenda. This will increase the likelihood of strong investments in this area. With advances in technology and data processing, ESG and clean tech are to dominate the space globally, including agtech, transport, manufacturing, fintech, and of course, energy.

Moreover, the concept of sustainable finance, where returns are not only measured in terms of percentage points, has become increasingly mainstream, with over $30 bn in assets. With VC funds now dedicated to ESG investments, and star companies such as Beyond Meat, ESG investing startups are on the right track to becoming very popular investments, providing good returns and positive impact.

As an angel investor, make sure to understand the startup’s ESG policies and what is their footprint on the environment.

Africa as the new Silicon Valley?
Africa is the world’s fastest growing market, estimated to account for one third of the global population by the end of the 21st century. But in terms of technological advances, Africa falls way behind other regions. This has given rise to a growing trend of ‘leapfrogging’ innovation as seen by a stark rise in tech hubs, accelerators, incubators and corporate-startup collaboration with unique tech adoption rates.

And there has historically been a huge gap between Seed to pre-Series A, making early-stage ventures a potentially untapped territory.

Investment has steadily doubled since 2016, and despite the early aftermath of COVID-19, African tech startups raised $2.4 billion in VC funding in 2020. With success stories such as Jumia, Twiga Foods, Flutterwave, Kudabank, and much still to build and do in Africa, coupled with over 250 investment firms now looking at African tech ventures, we believe Africa may be the next Silicon Valley for early-stage startups.

As an angel investor, a good way to enter this market is to use early-stage funds to diversify your risk and to learn the ropes of the complexities of the region.

Fintech maturing globally
Our hearts (and lives) are always somewhat linked to finance and fintech. And even if some may believe fintech has matured enough, we like to think there is still much to do in this space.

Within fintech, we see great potential in 2021 in the following:

Investment communities (of the likes of Tinkoff and Robinhood) as well as product bundling through APIs.
All-encompassing wallets allowing for multi-currency and crypto storage and investing.
IPO potential with firms such as Affirm, Coinbase, Instacart, Transferwise, Revolut, Ant Group and Robinhood stealing the limelight in 2021.

Non-bank competition against incumbent banks in areas such as credit, payments, wallets, etc.. We will certainly see the likes of Google, Amazon, Uber entering this space, as well as plenty of startups offering Banking-as-a-Service (BaaS) and additional services.
As an angel investor, look for opportunities that solve real financial problems, and look out for uses of crypto currencies in the region as the use cases are becoming more and more valuable.

Dark Kitchens
A dark kitchen is a professional kitchen that only produces food for delivery. It contains the kitchen equipment and facilities needed to prepare food but has no dining area for customers. Coming back to a conversation we had super angel Fabrice Grinda at the first edition of Angel Investor School Summit, we believe cloud or dark kitchens are prone to increase their footprint. With COVID-19 risks set to continue for a great deal of 2021, combined with platform capabilities and significantly less investment needed than a traditional restaurant, dark kitchens have a high potential for 2021. With people looking to stay home more, even if there are no lockdowns, the search for a culinary experience and high-quality affordable food will be sought after. Companies such as Cloud Kitchens from former Uber CEO, we believe that significant interest will emerge in the space.

If you are interested in this area, there are interesting and scalable models that you could decide to invest in. Research into dark kitchens, kitchens as a service, virtual kitchens and kitchen aggregators.

These are some of our thoughts for those seeking out startup trends. We will be following up with deeper insights and examples on all of them, so stay tuned! We believe 2021 will be an amazing year for startups, and even though we will still have Mr. Covid around, the entrepreneurial world is in great shape to be productive and improve our world.

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