VC predictions for 2013

VCs weigh in on e-commerce, mobile, health, personal finance, adtech, and more

The world didn’t end last week, and there are a loooot of angry doomsday preppers out there who are finding out there are no refunds on underground bunkers. So it’s officially safe to start thinking about 2013 and what’s going to be the big thing next year. Looking back on 2012, it was definitely the year of tablets, which saw a 150% increase in tablet ownership this year, thanks in large part to Amazon. But there were also some major gains in other sectors as well, including e-commerce, health, and more. So what can we expect for 2013? Here are a few predictions from VCs.

E-commerce

 “Every year more and more consumers decide to do most or all their shopping online. Online merchants are also getting better at fulfilling orders late into December. One advantage of ordering products online rather than offline is the ability to access a multitude of small suppliers who provide more unique and often personalized products which have much greater appeal than mass produced products sold through retail channels. Over 2013 I expect many of these online marketplaces which connect consumers to small artisanal producers to thrive, while more and more offline retailers will go under.” --Ben Holmes, partner, Index Ventures

"There will continue to be disruption in the supply chain, with multiple software providers providing e-commerce in a box that enables designers and great products to go direct-to-consumer." –Rick Heitzmann, Founder and Managing Director of FirstMark Capital

 “The Rise of Personalized Products – from shoes (check out www.milkandhoney.com and NikeID) to photo gifts (www.snapfish.com) – they will come of age enabled by easier custom manufacturing/flexible supply chains, and online interfaces – allowing consumers to easily create their own version of popular products as a form of self-expression.” –Raj Kapoor, Managing Director, Mayfield Fund

Healthcare IT (HCIT)

“In 2009 when we started looking at HCIT and invested in Practice Fusion, we were one of the few VCs investing in the space.  Since then, 12 HCIT incubators have popped up across the country, and investment in the category has picked up. In 2012, venture investment  in HCIT increased 43% from 2011. As we see the impact of healthcare reform kick in, we will see more and more startups emerge to fill the voids in healthcare.  Interesting areas of opportunity will be companies focused on reducing re-admissions, patient feedback and surveys, insurance exchanges, and predictive analytics.” –Rebecca Lynn, Partner, Morgenthaler Ventures

Mobile:

“Mobile really came into its own in 2012 with many content and commerce sites seeing over a third of their traffic and transactions coming from mobile devices. In 2013, we will continue to see a shift to mobile with both adtech and commerce solutions optimized for mobile.” –Rick Heitzmann, Founder and Managing Director of FirstMark Capital

“Time spent on mobile browsing and particularly in mobile applications is enormous and still advertising spend hasn't adjusted for this shift. Many new formats using location, notification channels and other mobile specific ad formats will start to become mainstream in 2013.” –Ben Holmes, partner, Index Ventures

Adtech

“Adtech companies will consolidate further as publishers and advertisers seek simpler solutions across screens (tablets, PCs, phones, TVs) – unifying their view on the audience and effectiveness across the spectrum. Also, traditional enterprise software companies (e.g. Oracle buying Eloqua, Adobe buying efficient frontier) will look at expanding into ad tech as advertising/marketing become important categories for a wider segment of enterprise customers.  Google, Microsoft and Yahoo are no longer the only buyers in this space.” –Raj Kapoor, Managing Director, Mayfield Fund

Personal Finance

“Finance as a whole has really heated up. We are very excited about opportunities in financial services both for the consumer and business. In personal finance, crowd funding has been very hot since the JOBS Act. The SEC will establish rules to govern crowdfunding in 2013, and when they do, these companies will likely have to jump through quite a few regulatory hoops. On the business side, I am very excited about new ways in which to underwrite and provide credit to small and medium sized businesses using sources of data that were not available just a few years ago. We continue to explore our ‘disintermediation of banking thesis,’ which guided our investment in Lending Club. Banks are inherently inefficient, and this continues to provide opportunities for startups to exploit.” –Rebecca Lynn, Partner, Morgenthaler Ventures

3D Printing

“The press and media have really latched onto 3D printing in 2012, yet still relatively few consumers have experienced 3D printed products in their hands. Whether through online 3D printing services or home 3D printers, this will change particularly in homewares and jewelry which may be the beachhead categories for 3D printing technologies.” –Ben Holmes, partner, Index Ventures

In General:

“Consumers will begin to be more thoughtful about their data and data privacy: what is shared, who has access to the data and for what purpose they are using it.” –Rick Heitzmann, Founder and Managing Director of FirstMark Capital 

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