What VCs Mistook For a False Trend And What to Expect In 2021

Konstantin Sinushin, the co-founder of the Untitled Ventures, about venture capital and technology trends to watch in 2021

This problematic year on a global scale turned out to be a turning point for the venture capital business since one critical problem of the pandemic has now been superimposed on another urgent problem — a change in the way we see technological progress.

But suppose the first result of the year is fully realized and gives rise to an increase in investment demand for the development of online services to the detriment of any offline — the second is only just beginning to be understood by investors and technology entrepreneurs.

For example, the latest growth of investment interest in biotechnology or online education only due to a pandemic which also acted as a catalyst here. However, the profound reason here lies precisely in the saturation of the consumer market with solutions that were actively developing within the existing framework.

At a time when it was mistaken in a strategic sense, it seemed that the future of venture lies within information technologies and numerous consumer solutions based on them.

We at the Untitled Ventures are confident that now more and more focus in information technology is shifting to B2B solutions, which provide familiar industries with new opportunities to improve their efficiency. And now there are entirely different drivers of growth in the efficiency of corporate business, which are no longer in the field of information technology. These are the already mentioned biotechnologies, new energy, space solutions.

The only ongoing trend in information technology itself is online entertainment. But there is also a crucial territorial aspect of an investment, which is remarkably increasing in the world. It seems that there is no more global peace, and we are talking about the fact that several essential segments of the world market are planned such as Europe, the British Commonwealth, China and North America. The rest of the countries will gradually join some specific segments. But there is no good news for Russia here.

The internal market for any technology is too small and too susceptible to government influence with all its shortcomings for a venture development model. Today it is geopolitically impossible to work from Russia to the foreign market, with the exception of some countries. In this regard, we are now collecting our new European fund with a focus on high technologies born in Russia and ready for their monetization in the world market with landing in Europe and or Britain. Many managers of the Russian capital are also prepared to invest, who do not expect to return their investments purely on the domestic market except for insider deals.

We have a great innovative power that has all the potential to create breakthrough technologies all over the world in very different areas of scientific knowledge. Still, it is, unfortunately, unable to provide its domestic market with a return on such investments.

What shall we do? We have the answer — invest in our tech expats. And this seems to be the main trend in the Russian market. If we talk about our current portfolio, then the best current projects that have successfully tried themselves already abroad and will be the first to receive regular rounds from us from a new fund, which already has an excellent funnel of many third-party projects working at the intersection of technologies, industry problems, and the industrial economy.

There will be robotics, unmanned technologies, additive technologies, new energy, and biotechnology. We will not forget about artificial intelligence and the Internet of Things, but we will look at it somewhat with the aim of embedding software into electronics.