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12 VCs share their thoughts on enterprise startup trends and opportunities

Published May 21, 2020

Compared to other tech firms, enterprise companies have held up well during the pandemic.

If anything, the problems enterprises were facing prior to the economic downturn have become even more pronounced; if you were thinking about moving to the cloud or just dabbling in it, you’re probably accelerating that motion. If you were trying to move off of legacy systems, that has become even more imperative. And if you were attempting to modernize processes and workflows, whether engineer- and developer-related, or across other parts of the organization, chances are good that you are giving that a much closer look.

We won’t be locked down forever and employees will eventually return to offices, but it’s likely that many companies will take the lessons they learned during this era and put them to work inside their organizations. Startups are uniquely positioned to help companies solve these new modern kinds of problems, much more so than a legacy vendor (which could be itself trying to update its approach).

Venture capitalists certainly understand all of these dynamics and are always dutifully searching for startups that could help companies shift to a digital future more quickly.

We spoke to 12 of them to take their pulse and learn more about the trends that are exciting them, what they look for in an investment opportunity and which parts of the enterprise are ripe for startups to impact:

  • Max Gazor, CRV
  • Navin Chadda, Mayfield
  • Matt Murphy, Menlo Venture Capital
  • Soma Somasagar, Madrona Ventures
  • Jon Lehr, Work-Bench
  • Steve Herrod, General Catalyst
  • Jai Das, Sapphire Ventures
  • Max Gazor,  CRV
  • Ed Sim, Boldstart Ventures
  • Martin Cassado, Andreessen Horowitz
  • Vassant Natarajan, Accel
  • Dharmesh Thakker, Battery Ventures

Max Gazor, CRV

What trends are you most excited about in the enterprise from an investing perspective?

It’s abundantly clear that cloud software markets are bigger than most people anticipated. We continue to invest heavily there as we have been doing for the last decade.

Specifically, the most exciting trend right now in enterprise is low-code software development. I’m on the board of Airtable, where I led the Series A and co-led the Series B investments, so I see first hand how this will play out. We are heading toward a future where hundreds of millions of people will be empowered to compose software that fits their own needs. Imagine the productivity and transformation that will unlock in the world! It may be one of the largest market opportunities we have seen since cloud computing.

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VCs see opportunities for gaming infrastructure startups and incumbents

Published May 8, 2020

As the infrastructure for developing games becomes more advanced, studios have turned to buying best-in-class technology from others instead of building everything from scratch (often with inferior quality).

This shift underpinned Unity’s rise as the most popular game engine. The current focus on games as ever-evolving social hubs that can remain popular for a decade requires investment in “live ops” to keep updating the game with new features and experiences, only adding to a game studio’s responsibilities.

There are big movements in gaming right now to make games cross-platform (not just restricted to mobile or PC or one console), incorporate new types of chat (in-game or outside of it) and to automatically remove bullies and bots among other things. Optimizing games’ virtual economies is only getting more complex as trade of virtual goods becomes increasingly popular.

All this means more opportunity for startups (and large incumbents) that provide new tools and platforms to game developers and gamers. To gauge which opportunities are prime for entrepreneurs, I asked four leading early-stage investors who focus on the gaming sector to share their analysis:

  • Sam Englebardt, Galaxy Interactive
  • Gigi Levy Weiss, NFX
  • Amit Kumar, Accel
  • Anton Backman, Play Ventures

Sam Englebardt, Galaxy Interactive

Which areas within gaming infrastructure seem firmly dominated by large incumbents, versus open for new startups to rise up?

I’m always rooting for the startup, but some of the really big and expensive infrastructure challenges seem unlikely to be solved by a startup, especially where the incumbents have a lead in time, money and the personnel they’re throwing at the problem. I’m thinking here, for example, about something like cloud computing, storage solutions, etc.

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7 VCs talk about today’s esports opportunities

Published April 30, 2020

Even before the COVID-19 shutdown, venture funding rounds and total deal volume of VC funding for esports were down noticeably from the year prior. The space received a lot of attention in 2017 and 2018 as leagues formed, teams raised money and surging popularity fostered a whole ecosystem of new companies. Last year featured some big fundraises, but esports wasn’t the hot new thing in the tech world anymore.

This unexpected, compulsory work-from-home era may drive renewed interest in the space, however, as a larger market of consumers discover esports and more potential entrepreneurs identify pain points in their experience.

To track where new startups could arise this year, I asked seven VCs who pay close attention to the esports market where they see opportunities at the moment:

Their responses are below.

This is the second investor survey I’ve conducted to better understand VCs’ views on gaming startups amid the pandemic; they complement my broader gaming survey from October 2019 and an eight-article series on virtual worlds I wrote last month. If you missed it, read the previous survey, which investigated the trend of “games as the new social networks”.

Peter Levin, Griffin Gaming Partners

Which specific areas within esports are most interesting to you right now as a VC looking for deals? Which areas are the least interesting territory for new deals?

Everything around competitive gaming is of interest to us. With Twitch streaming north of two BILLION hours of game play thus far during the pandemic, this continues to be an area of great interest to us. Fantasy, real-time wagering, match-making, backend infrastructure and other areas of ‘picks and shovels’-like plays remain front burner for us relative to competitive gaming.

What challenges does the esports ecosystem now need solutions to that didn’t exist (or weren’t a focus) 2 years ago?

As competitive gaming is still so very new with respect to the greater competitive landscape of content, teams and events, the Industry should be nimble enough to better respond to dramatic market shifts relative to its analog, linear brethren. A native digital industry, getting back “online’”will be orders of magnitude more straightforward than in so many other areas.

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5 top gaming investors explain how the pandemic is reshaping MMOs and social games

Published April 28, 2020

Now that the COVID-19 pandemic has forced millions into isolation, video games are seeing a surge in usage as people seek entertainment and social interaction.

When we surveyed gaming-focused VCs in October, Andreessen Horowitz partner Jonathan Lai predicted that “next-generation games will be bigger than anything we’ve seen yet,” eventually reaching “Facebook scale.” This month, when we asked 17 VCs how this era would impact consumer startups, gaming was one of the top verticals they named.

We wanted to learn more about how the venture community thinks about the future of this sector, so we asked five experienced gaming investors about where they do — and don’t — see new opportunities within this trend:

Below are their responses, edited for space and clarity. We’ll follow up with surveys on other gaming categories in the next couple of weeks.

And if you’re interested in understanding the challenges for gaming companies aiming to become next-generation social platforms, be sure to read my eight-part series on virtual worlds.

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Top investors predict what’s ahead for Boston’s VC scene in Q1

Published April 17, 2020

Before the COVID-19 pandemic shook up the world and reshaped the economy, Boston was quietly setting records.

According to new venture data compiled by TechCrunch, the region set what was at least a local maximum in venture capital raised in the space of a single quarter in Q1 2020.

But while Boston’s startup market announced a number of huge rounds that bolstered its total venture dollars raised in the first quarter, there were signs of weakness: Deal volume was its best since Q2 2019, according to a set of data compiled and released by PwC and CB Insights, but was still a little under the pace set in 2018.

So Boston’s startups raised lots of money, but couldn’t match prior highs when it came to the number of checks written. And those results were largely recorded before COVID-19 shuttered the city. Since then, we’ve seen a number of area startups lay off staff, something we explored last week.

Now, with fresh data in hand, we can take a closer look at the city’s first quarter of 2020. To better understand what we’re unpacking, we asked a number of local venture capitalists to weigh in. Let’s look back at Boston’s Q1 as we stride into Q2 with the help of Venture Lane, .406 Ventures, Volition Capital and Flybridge Capital Partners.

The data

Starting with a programming note is counter-flow, but bear with us. TechCrunch is starting a regular, monthly series on Boston and its startup market. This is a second prelude of sorts. Normally we’d hold news and interviews for a later date so that we’d have plenty of material for a column. In the face of relentless change, however, we didn’t want to hold off on reporting and synthesizing new information. When things are more normal, our pace will follow.

Per PwC and CB Insights, here’s the last few quarters of data, along with a few yearly totals to draw you the picture we can now see:

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Investor survey results: Upcoming trends in social startups

Published April 7, 2020

Voice-based social networks and gaming as a new form of identity were among the top emerging trends in consumer social startups, according to an Extra Crunch survey of top social tech investors. Meanwhile, anonymity and dating apps with a superfluous twist were spaces where investors were most pessimistic.

Extra Crunch assembled a list of the most prolific and well-respected investors in social. Many have funded or worked for the breakout companies changing the way we interact with other people. We asked about the most exciting trends they’re seeing and which areas they expect will soon spawn blockbuster social apps.

Subscribe to Extra Crunch to read the full answers to our questionnaire from funds like Andreessen Horowitz, CRV and Initialized.

Here are the 16 leading social network VCs that participated in our survey:

Stay tuned next week for a follow-up article from these investors detailing their thoughts on social investing in the COVID-19 era.

Olivia Moore & Justine Moore, CRV

What trends are you most excited about in social from an investing perspective?

First, it’s worth noting that consumer social is very hard to predict. Unlike enterprise software, there’s no rational buyer, and the things that take off can seem “random” or dumb. Startups that see huge success in this space are often pioneering a new feature or way of communicating that hasn’t existed before. Any VC who claims to know what the “next big thing” in consumer social will look like should probably go build it themselves!

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Where top VCs are investing in remote events

Published March 17, 2020

The novel coronavirus pandemic has rapidly moved companies into a remote-first world.

Nearly all of the world’s largest events have been canceled, put on pause or pivoted to online-only. In the tech world, event cancellations thus far have included SXSW, GDC, Mobile World Congress, Google I/O, Facebook F8, E3 and others.

As more and more hosts consider staging fully remote events as possible alternatives, we decided to take a deeper look into the venture-backed startups focused on supporting large-scale virtual gatherings, like Hopin and Run The World. To further understand the impact of COVID-19, we asked five leading VCs who have invested in or have knowledge of startups focused on remote events to update us on the state of the market and to share where they see opportunity in the sector:

Sarah Cannon, Index Ventures

Which trends in remote events/conferencing excite you the most from an investing perspective?

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