2020 was a unique year full of changes. These changes pushed us to rethink strategies, adjust agendas and prioritize next steps. This year’s events have affected all industries around the world. And now is the time to take stock of the year and headline trends, challenges and opportunities it has provided.
2020 has shifted VC investment trends – healthcare and business productivity have dominated the unicorn class due to the rise in demand for services in these sectors. Global VC investment continued to be strong in 2020. While the number of VC deals dropped, the level of investment remained high. Globally, in Q3’20 VC-backed companies raised $73.2B across 4861 deals. And European VC investments in Q3’20 reached a new record high of $12.1B, according to Venture Pulse Q3 2020 report by KPMG. Health and biotech, fintech, and the future of work remain the hottest areas for investors in the EU. Notably, 2020 is on track to be a record year for the amount of capital invested into European tech.
Stephane Pesch, CEO at Luxembourg Private Equity & Venture Capital Association, shared his opinion about the impact of 2020 on venture capital industry:
“2020 should be remembered as the year of resilience and exponential digitalisation of the business world. Despite the Covid-19 pandemic, which could have potentially impacted the strong growth of EU Venture Capital as experienced over the last years, the sector fared in the end quite well and has shown its robustness and resilience.
VCs, as best-in-class practitioners and usually pioneer users of new technologies, platforms and tools, should be extremely well equipped in 2021 in order to identify and select the next winners of this new and promising vintage in an even more digitalised, connected world. For example intelligent AI-based technologies could probably reduce the time injected in the analysis of new opportunities especially in a growing market (more volume, entrepreneurs, concepts, technologies) and so prove quite helpful in the future.
2020 has underlined the prominent rise of the biotech and healthcare activities next to the usually central ICT sectors (including communications, computer and electronics) which in C-19 circumstances were essential for the pursuit of business relations and the global economy. Such trends should certainly continue since the deployment of a vaccine will take time and require huge logistical efforts, which on the other hand could facilitate a comeback of the transportation industry. The FinTech, Enterprise software, food sectors which are usually capital magnets, despite a partial “shift” to other fields in 2020, could soon be back on the investors’ radar.”
2020’s challenging conditions forced investors to reconsider their investment strategies. This year has seen flows into ethical and ESG investments, acceleration of investments in omnichannel capabilities, technologies such as AI, healthcare, and growth of foreign direct investments into China. Notably, the interest of professional investors in digital assets has increased. 61.15% of professional investors in Europe have already bought or plan to buy digital assets, indicates the Cointelegraph and Crypto Research study.
“The pandemic, on the one hand, forced private investors to seriously consider capital preservation and succession planning, and on the other hand, it attracted close attention to innovative technologies, which have become the most important competitive advantage in many sectors of the economy. I believe 2021 will bring lots of new ideas and out-of-box solutions, capitalizing on the lessons learned in 2020.” – said Maria Tkachenko, Founder and General Manager of Ziffer Group.
The pandemic magnified existing problems and made modernization and digitalization more nascent than ever before. Now, at the end of 2020, we can see that the hype around blockchain is over, and the technology is recognised as a helpful tool instead of a curious novelty. More organizations in more sectors — such as finance, transportation and logistics, health care, and government — are expanding and diversifying their blockchain initiatives. And the fact that industrial giants like Amazon, PayPal and Alibaba have started exploring blockchain technologies in 2020 proves it.
“The large number of projects around the tokenization of assets, and on all types of products, and all projects around CBDCs will have marked this year “Blockchain”. This promises good prospects for the years to come.” – according to the Laurent Marochini, Co-Chairman of the ALFI Working Group Blockchain & Crypto Currencies – “ I firmly believe that 2021 will be a crucial year for the blockchain. I believe that asset tokenization will continue with more massive deliveries and adoptions, especially in investment funds. Tokenization of assets such as bonds and real estate will also increase. 2021 should see the arrival of “Digital Coin” if we rely on predictions (Diem or Digital Yuan). Europe will continue its work on this point. The real uncertainty will persist in the world of DeFi.”
2020 was an important year for cryptocurrencies. Due to the economic volatility, people started taking cryptocurrency more seriously than ever before. As a result, the crypto space has attracted both capital and attention: Bitcoin has held sustainable price levels close to $20k and has reached its all-time high in December; the DeFi has grown from $1B in ‘locked’ assets to over $14B in 2020 alone; major corporations have announced huge investments into cryptocurrencies; governments and central banks began explorative studies, trials and even launches of CBDCs.
“2020 will be remembered as the year of crypto institutionalization. Kraken and Avanti became US banks and JPMorgan, DBS and Paypal started to offer crypto related services. The buy-side ranging from large hedge funds to public companies started to publicly amass Bitcoin.” – says Junhaeng Lee, co-founder and CEO of Streami, the most innovative blockchain holding company in Asia-Pacific – “In 2021, the trend towards institutionalization will only strengthen. At the same time, mass adoption of Bitcoin as a store of value will occur around the globe where COVID-19 has hit hard”.
2020 brought not only challenges, but also opportunities. And we want to close this chapter with gratitude for the fact that in 2021 we will be more strong and modernized than ever before.
This year VNX have successfully completed the first VC deal in Europe utilizing blockchain technology. The deal sees the issue of 1.1 million Euro of asset-backed tokens linked to the investment into Streami Inc., one of the most innovative blockchain companies in South Korea.
“This year was very unpredictable. It showed us what is really important. It taught us to think broadly and creatively, brought agility and readiness to transform to the fore. Despite all difficulties VNX proved to be a pioneer in tokenization of traditional assets in Europe. We helped the real company attract significant investment. It makes me feel proud and I would like to say thank you to all who supported us. Going forward we have great plans for 2021! Next year we will accelerate our development and offer new products!” – said Alexander Tkachenko, CEO and founder of VNX.
We are grateful to each and every one of you for being with us! VNX wishes you all health, happiness, and a very happy new year to come.
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