State of Startups 2020 Through The Lens of LETA Capital
Last year we analyzed our pipeline for the first time. This year we are doing the same—we show the percentage of incoming projects by industry, investments and valuations which founders requested. We visualized the results of the past year and compared them to the results of 2019. Here’s what we got. I hope this transparency will help to understand the VC trends and tendencies better.
Industries
As you can see, the leader has changed: instead of Search / Classifiedes / Aggregators industry, there are E-commerce / Marketplaces (e-commerce projects), which took the first place in 2020. Surprisingly, the share of hardware companies in the pipeline has increased. Perhaps this is due to an investment increase in Battery companies. A whole new segment has also appeared in comparison with 2019: FoodTech. I think there are simple reasons for that: lockdown and pandemic. VR/AR startups also started to appear more often in our pipeline, I think that had happened because the founders noticed Devar and Cerevrum in our portfolio. Professional and Corporate Software sectors hold leading positions for two years in a row, but this doesn’t surprise at all—we specialize in these areas and are ready to look through dozens of projects in these industries.
Investments and valuations
We also try to track and analyze valuations across all pitching startups. Frankly speaking, founders in their decks show the required funding amount more often than the valuation, so the data here is not directly comparable.
There was not much change in valuations. Founders still do not want to value their companies below $1M. However, they don’t want to overestimate them as well.
Raising capital in 2020
The graph shows that a lot of companies need less than $1 million.
Usually, these are companies at the Pre-Seed stage. In general, we are ready to communicate with early-stage companies to track the dynamics of development and the potential of the team, but in terms of investments, our focus is still on the larger companies.
Do you run an innovative tech startup? We are investing in early-stage revenue-generating software startups across the world and would love to hear from you! You can reach us at leta.vc.
