October 25, 2021

The future is as bright as ever for investors allocating to venture growth equity. There will always be risks when investing in venture capital (VC) or any asset class, however, these risks are different than those faced 20 years ago, owing to the significantly expanding and evolving addressable market. This generation of disruptive companies is expected to continue growing in scale and importance, and we expect exits to similarly grow in number and value. These tailwinds have fueled investors’ interest and ability to fund tomorrow’s next leading startups.

Join us in exploring why we believe venture growth equity is one of the best-kept secrets in private markets.

Going Digital at Breakneck Speed

Covid-19 has accelerated the adoption of technology, causing businesses and industries as we once knew them to be transformed forever.

In some sectors, we saw up to five years of projected growth realized in just six to 12 months. It seems that a key attribution behind these unprecedented growth rates is the rapid adoption of technology by all industries, touching markets that once seemed technology agnostic, such as outdoor recreation, law, financial services, consumer apparel and beauty.

During the early days of the internet, the prevailing wisdom was that certain industries wouldn’t utilize technology. We know today that nothing could be further from the truth. We continue to see digital adoption accelerate and become a necessity of survival for sectors that have historically seen little disruption. We believe that the ability for technology to disrupt, innovate and drive efficiencies to these new sectors brings about a significant opportunity for the venture industry. As a result, it is now evident that technology is a key part of every business, no longer its own vertical, and instead spans horizontally across every single industry.

Previously, technology was synonymous with the back office, an enabler that supports a business in the background. Today, technology has become the heart and engine of how almost all businesses are run. It is no longer merely a support function; technology touches everything.

The figure below looks at the percentage of budget allocated to technology spend by vertical as of June 2021, highlighting that the wave of industries looking to adopt innovation and technology integration has only just begun. Despite the surge, technology spend is still in the early innings. It is only a matter of time until technology adoption becomes even more necessary for survival.

Covid-19 has also fueled a shift in human behavior, from how new businesses are built and existing businesses are scaled to how companies are financed and how basic consumers behave. We believe many of these shifts are here to stay.

Download the full paper here