Virtualization Technology News and Information
Scrum Ventures 2020 Predictions: New Decade Brings the 5G Era Personalized Healthcare and a Reinvented VC Approach

VMblog Predictions 2020 

Industry executives and experts share their predictions for 2020.  Read them in this 12th annual series exclusive.

By Team Members from Scrum Ventures

New Decade Brings the 5G Era Personalized Healthcare and a Reinvented VC Approach

From vast changes across the sports tech realm and failed IPOs to the increasing demand of personalized healthcare and the continuing rise of 5G and connected tech, this last year brought many emerging tech trends and investment challenges within across industries to light. In the post below, Scrum Ventures' Mike Proman, Ryan Mendoza and Yohei Nakajima share their predictions for the new year, including new approaches to the startup funding process, acceleration in the use of 5G and robotics, evolved business and product standards, and overall a new competitive landscape.

Michael Proman, Managing Director, Scrum Ventures

Mike Proman 

Public vs Private -- Sports Tech Startups to Explore Alternative Exits

2019 was not kind to sports-related IPOs with share prices of companies such as Wanda Sports Group (WSG), Super League Gaming (SLGG), and Peloton (PTON) all falling in public market debuts - not to mention the highly anticipated Endeavor offering never making it out of the gate. With public markets souring on sports, look for alternative exit strategies -- namely PE -- from late stage startups to dominate the conversation in 2020. Additionally, get ready for quite a bit of M&A activity in high-growth categories like home/connected fitness with names like Tonal, Mirror and Zwift being likely acquisition targets -- especially on the heels of Google's $2 billion purchase of Fitbit. 

VC 2020: Regional Diversity in Venture Investments

While the majority of venture investments have historically come out of Massachusetts, New York and California, there will be a greater emphasis from top-tier VCs on secondary startup markets (especially the Midwest -- i.e., Chicago, Minneapolis, Kansas City, Madison, Detroit, Indianapolis, Nashville, etc) as operational (SG&A) costs within coastal markets continue to skyrocket.

Ryan Mendoza, Principal, Scrum Ventures

Ryan Mendoza 

The 5G Era Begins - Smart Factories, Cities, Cars and More

With the imminent 2020 launch of 5G, we will see marked improvement in new products and services for consumers and businesses alike while enabling a brand new startup and business landscape. While media and gaming are obvious use cases, 5G stands to spur significant advances in smart factories, smart cities, autonomous vehicles, edge computing and healthcare. However, cybersecurity will be of the utmost importance as we connect more and devices and move towards improved and prolonged connectivity. 

Personalization Standardized & Healthcare on Demand

Products and services are becoming hyper personalized driven by consumers demanding better products and services with faster delivery and infrastructure innovation like 5G. In 2020, personalization will become the standard for many businesses to stay competitive. Specifically, we'll see this materialize with more on demand healthcare services -  including specialized care types, treatments, and medications. This will be supplemented by new service and delivery models, such as subscriptions and SaaS. For example, we are already starting to see more telemedicine services being commercialized such as Hims' now offering prescription anxiety medication obtained through telemedicine. 

VC 2020: Decrease in Mega Rounds & Re-Focus on Viable Business Models

Given the recent public scrutiny over highly valued startup IPOs falling flat, huge late stage rounds and pre-IPO rounds will decrease starting in 2020 and beyond. We will start to move towards focusing on revenue generation, and not bloating pre-IPO valuations. We've already started to notice that recent IPO companies are continuing to post losses, without viable business models that support revenue generation, which will drive change to this new behavior. 

Larger Seed Rounds to Spur Increase in Pre-Seed Funds

We will start to see an increase in pre-seed funds to support companies between inception and seed rounds. Over the last few years, seed rounds have become larger - leaving a gap which institutional investors, and angels turning institutional, can fill. This will increase the need for knowledgable pre-seed funds that can get involved in building companies from the ground up and supporting startups beyond just providing capital.

Yohei Nakajima, Venture Partner, Scrum Ventures

Yohei Nakajima 

New Regulations to Spur the Rise of Robots in Everyday Life

In recent years, we've seen early tests of delivery robots, drones, micromobility, autonomous vehicles and food industry applications. With countries and local governments now passing regulation and approving pilots programs, there's no doubt we'll see more everyday robots hitting the market in 2020.  Driving this trend is the launch of 5G, increased consumer adoption, and overall lower costs. However, this won't come without major concerns and setbacks including privacy, governance and what role these technologies will play in society. While there is much yet to be solved, we expect to see a significant increase in consumer robots being implemented throughout 2020.

VC 2020: Early Round Valuations to Rise & an Olympic Airbnb IPO

While high-profile IPO disappointments will likely lead to a decrease in late-stage mega rounds, we don't foresee this trend pulling back at the early stage due to the large amount of new funds and managers on the market who are fundraising today. This will only continue to fuel the rise in early-stage valuation rounds we've seen in recent years. On the IPO front, there have been several rumors surrounding Airbnb's public debut in 2020. With the company's $500 million sponsorship of the 2020 Olympics, it's likely the much anticipated IPO will be timed around or closely after this worldwide event as an opportunity to solidify their brand on a global level.



Scrum Ventures is an early-stage venture firm investing across a range of industries in the U.S. and Asia. Based in San Francisco with extensive experience and networks in both Silicon Valley and Japan, Scrum Ventures accelerates portfolio companies with global opportunities and helps corporations innovate. Scrum Ventures recently announced Scrum Studios, a platform that connects global corporations with startups.

Published Tuesday, January 14, 2020 7:32 AM by David Marshall
There are no comments for this post.
To post a comment, you must be a registered user. Registration is free and easy! Sign up now!
<January 2020>