WIND Ventures 2021 Predictions

Author: Brian Walsh, WIND Ventures

2020 has been a whirlwind of a year, bringing many challenges and changes but also opportunities. At WIND Ventures, we significantly expanded our portfolio, making investments to back talented entrepreneurs across the globe, from the US to Spain to Colombia. While the COVID-19 pandemic forced the world into lockdown, our team buckled down and made investments to back exceptional entrepreneurs with visions to transform the energy, mobility and retail sectors including Chiper, a Bogota-based e-commerce platform for independent merchants; and Turntide, a San Francisco-based startup that developed a more efficient, cheaper, and greener technology for electric motors.

As we begin 2021, we are optimistic of what’s to come. Technology advancements, such as the acceleration of digitization across industries, have shown us the resilience of innovation through uncertain times, and we expect that to continue into 2021 and the future. Below are some predictions of what the next year, and beyond, has in store for the venture and technology ecosystem.

SPACs becoming the preferred choice for venture-backed entrepreneurs

In 2020, we saw a record number of listings from SPACS, or special purpose acquisitions companies, with an increase of over 350% in gross process YTD versus 2019. IPOs may still be the preferred path to public markets (273 IPOs vs 168 SPACs YTD), however venture-backed companies will raise as much capital, on average, via SPACs as IPOs in 2020.

Source: WIND Ventures; Spaceinsider; Factset

Moving to 2021, we believe that both entrepreneurs with venture backing and venture boards will continue to list in such manner given the benefits in time, simplicity and, now, the ability to raise as much capital as a traditional IPO. As a consequence, we predict SPACs will outpace traditional IPOs on a gross proceeds / transaction metric in 2021 and beyond.

Electric Vehicle adoption moving to the fast lane

In the past several years, electric vehicle (EV) sales have accelerated, with a 3.3% market share in 2020. This year, we’ve seen battery prices drop (down 89% over the past 10 years), OEMs making commitments to bring new EV models to market, and increased government support, with California banning traditional new car sales by 2035 and Europe investing $54B in EV and charging incentives.

As a result, we predict that EV adoption is going to continue its acceleration in 2021 and beyond, and EV sales will take over 5% of global new car sales in 2021.

Source: WIND Ventures; McKinsey&Company; BloombergNEF

Latin America to surpass long-standing venture capital hubs

Both Latin America, or LatAm, and the Middle East are up-and-coming startup regions. The Middle East, however, has long been positioned as a huge opportunity — from 2015–2019, invested capital in the region has grown 45% annually. On the other hand, LatAm has just recently entered the scene and its invested capital is growing almost 2x as fast at 84% annually from 2015–2019.

LatAm has all the fundamentals of a vibrant VC hub, including a large population, high smart phone adoption, a growing middle class and high levels or urbanization. These fundamentals will boost LatAm to surpass other, much longer standing VC hubs in 2021 as measured by total invested capital. First will be the Middle East, but we also predict this acceleration will continue with LatAm also surpassing other VC hubs including the UK.

Source: WIND Ventures; Pitchbook

2021 is the year for frictionless retail and wireless EV charging

The need for “frictionless” experiences has accelerated with the pandemic and we predict that 2021 will be the year for frictionless retail and wireless EV charging.

Frictionless retail, which is a mobile-centric user experience that does not require a typical cashier, will take big steps in 2021 as retail and convenience stores re-define what ‘convenience’ is today and as a consequence of COVID-19. Technology will enable new definitions and the technology is now ready for early economic use cases from many startups.

Wireless EV charging technology, especially for fleet vehicles such as buses and taxis, will also accelerate in 2021, in conjunction with the acceleration of EV adoption. As more consumers convert to EVs, better charging experiences will quickly be in focus.

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About Brian Walsh

Brian Walsh, is the head of WIND Ventures, the strategic venture capital group for COPEC which is a leading energy and retail corporation and one of the most valued brands throughout Latin America. Brian has two decades of venture capital experience in the San Francisco Bay area and, most recently, was a Senior Expert at McKinsey & Company where he led the Firm’s advisory efforts with Fortune 500 clients on how corporations can best engage startups for impact.

WIND Ventures is the corporate venture capital arm of COPEC, a leading energy company with dominant market share throughout Latin America.