Image for post
Image for post

The year fast coming to a close was unlike any other in our lifetimes. In prior posts, we shared our observations on the state of venture and tech as the market swooned; we foretold the waning influence of Silicon Valley as smaller ecosystems benefited from the exodus of tech talent (and now VCs) from the Bay Area; and, during the market’s March bottom we made our Bull Case for why LPs should stay the course and continue investing in the VC asset class, market gyrations be damned.

Now, in these closing days of 2020, the Dow flirts with 31,000; two highly effective vaccines are being deployed around the world; and, we’ve experienced a wave of highly successful technology company IPOs and M&A transactions that rival any vintage since the heady dot-com days of the late 1990s. …

Image for post
Image for post
Silicon Valley has become more a State of Mind than a geography as other tech hubs gain influence.

Earlier this month Stripe announced its $200mm acquisition of Paystack, a fintech startup from Lagos, Nigeria. For an African startup to exit at a meaningful figure at all is unusual enough, but that it had garnered a $200mm price tag would have been unfathomable by most observers a few short years ago — even by those long evangelizing Africa’s ‘emerging tech hub’ bona fides.

However, to certain observers and cross-border venture investors, such as us at Catapult, who’ve spent years shuttling between tech hubs outside Silicon Valley, stories like that of Paystack are becoming increasingly common. More to the point, they are a harbinger for things to come vis-à-vis Silicon Valley’s waning influence on the tech landscape; something that’s been underway for the better part of a decade and now accelerated by an order of magnitude by the impact of Covid-19. …

Image for post
Image for post
A “new normal” is taking shape as startups and investors find novel ways to continue to innovate and support transformational companies

In our last piece, 6 Emerging Tech Trends for a Post-Covid19 World, we discussed trends that we at Catapult were seeing emerge from the current crisis. The post focused on sectors and themes across the technology landscape that have been enjoying a Covid19 ‘bounce’ or, at the very least, renewed interest from tech investors who feel, as we do, that companies focusing in these areas are well positioned to benefit from the changes in consumer behavior and commerce provoked by the pandemic.

In this post, we’ll offer 4 brief insights into what we’re currently seeing in the funding environment. Hopefully, this will provide some clarity to startup teams, fellow venture investors, and limited partners (LP) who are seeking to best navigate the current market uncertainty and position themselves for the road ahead. …

Image for post
Image for post
WFH technologies have been an obvious early winner emerging from the current pandemic, but there will be many others.

On January 30, the WHO declared COVID-19 (C19) a global health emergency. In the 9 weeks since, the lives of most everyone in the developed world has been radically altered.

Beyond the destabilizing personal and social impact of C19, the pace and breadth of these changes across the business world have been profound. …

Image for post
Image for post
Don’t fear the bear. History suggests we might be entering a superb time for tech investing

COVID-19 has now circumnavigated the globe, infecting more than 100k (as of this writing) and killing thousands. Public market equities shed trillions in value as investors ponder the long-term impact of the pandemic. Global travel has ground to a halt. Conferences, film premieres and sporting events are cancelled. Virtually everywhere the public convenes sits eerily empty.

Tech has not been spared either. According to CB Insights, the biggest tech companies in the US have seen more than $500B wiped off their collective market cap since January 30, when the WHO announced a public health emergency.

So, as the 11-year bull market comes to an end and we likely head into the kind of counter cyclical environment many have long anticipated, what does that mean for tech founders, venture investors and Limited Partners?

Image for post
Image for post

Venture capital is experiencing a sea change. Consider just a few of the things we’ve witnessed in recent years:

  1. A 20x increase in the number of seed funds deploying capital in and around Silicon Valley since 2009. (I credit Ahoy Capital’s Chris Douvos for this stat.)
  2. Most legacy firms raising larger and larger funds with every fund cycle, with a few notable exceptions. This upward migration has caused many of these same Ivy League venture names to largely move away from Seed stage investing and, in some cases, even move away from what was traditionally considered “early stage venture investing.”
  3. The rise of fast-emerging ‘Tier 2’ tech ecosystems outside Silicon Valley that are catching up quickly with Silicon Valley and now challenging the Valley’s once-indisputable hegemony as the dominant ecosystem for tech innovation; and…

About

Jonathan Tower

Jonathan (@jonathan_tower) is Founder and Managing Partner at Catapult, a global early stage venture firm with assets in multiple geographies.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store