Looking Into the Future: 2021 Predictions from Piva Capital

2020 was a monumental year that came with many changes and new opportunities. At Piva, we entered the year having just launched our firm and hit the ground running determined to discover and back the people, companies and breakthrough technologies needed to usher in a new era of industry and energy. When faced with lockdown orders brought on by the pandemic just a few months later, our team buckled down to discover this next generation of startups no matter the circumstance.

As the world began to grapple with the COVID-19 pandemic, many times in the beginning it was uncertain what lay ahead in the startup ecosystem and if there would be an acceleration of technology to address new demands. However, more than ever, we saw the world lean on technology innovation to address the pandemic’s labor and food shortages, rising climate change concerns, and a greater push to go green.

2020 saw remarkable advancements across the energy, materials, and industrial sectors doing just this. New developments in alternative food materials were created to provide a more sustainable and nutritious solution to consumers, Artificial Intelligence (AI) technologies digitized industries such as farming, industrials, and manufacturing, and advancements in renewable energy bubbled to the surface to increase climate resiliency.

As we look ahead to a new year, it’s undoubtedly true that we will be faced with yet another year of change. Our new normal looks entirely different from life just one year ago, but we are certain that more change will bring new opportunities for continued growth and even more digitization in these sectors. Below I’ve rounded up the team’s top predictions for next year on where we think the future of materials, industrials, energy and food & agriculture may be headed.

The Future of Materials:

Bennett Cohen, Partner, Piva Capital

The Plant-Based Lifestyle Will Expand from Food into Fashion

The ever-growing plant-based lifestyle that’s already shaking up the dairy and meat industries will expand from food to fashion. As consumers continue to embrace a more sustainable lifestyle, they will become more aware of the detrimental impact that “fast fashion”, animal-derived (leather, wool, silk, down, silk) and petroleum-derived (pleather, polyester, etc.) fibres have on the environment. Because of this, the fashion industry will experience a reckoning and will need to reinvent itself on many levels. In 2021, we will start to see more products made with plant-based alternatives replacing animal and petroleum-based textiles. Similar to food nutrition labels, the fashion industry will also start including clothing labels that disclose more information on the environmental impact of the products consumers purchase.

Alternative Seafood Swims to the Food-Tech Surface

Due to continued traction in plant-based meat alternatives for pork, chicken and beef, it will become increasingly hard for start-ups to differentiate from an already packed shelf and stand out of a crowded market. However, there is still white space for new food tech entrants in the seafood sector, where startups have more opportunities to own a product category, such as shrimp, salmon, or crab. Alternative seafood will be the next wave in the clean meat movement, which will attract increasing investment in 2021 and years to come.

The Future of Industry

Adzmel Adznan, Partner & Operating Manager, Piva Capital

The Rise of Industrial Robots

The public health crisis of COVID-19 has created a dire urgency for worker safety in the industrial and manufacturing sectors and on many operations across the assembly line. In order to reduce human exposure, ensure factory workers remain healthy and COVID-free across the globe, and continue to increase productivity, the appetite to find viable AI and robotics solutions will soar to new heights. In 2021, more companies will be open to adopting these types of technologies to optimize their assembly lines, protect their employees, and operate in a leaner, cleaner and greener manner.

Industry 4.0 and COVID-19 Leads to More GloCalization

With COVID-19 shutting down international borders and business travel, expect to see a continued rise in “gloCalization” as more countries understand the implications of the Fourth Industrial Revolution and take proactive steps in ensuring they keep an advantage over their neighbors. Due to this, there will be a renewed focus on discovering the technology solutions that can improve the resiliency and efficiency of critical supply chains in localized regions. Optimizing and strengthening these supply chains will present viable opportunities for emerging countries to advance their economies and obtain a competitive edge.

The Future of Energy:

Maria Buitron, Investor, Piva Capital

A Greater Push to Decarbonize Everything

To date, there have been decades of effort put into building more renewable generation capacity and decarbonizing some initial sectors, such as buildings or transportation. However, addressing the decarbonization of industrial sectors, like cement and concrete, steel, aluminum, and chemicals will increase in importance in 2021. We’ll see new companies rise to the surface offering new ways to lower the carbon footprint in these complex areas, and a surge in customers demanding cleaner materials for their products and their supply chain. While most think hydrogen is the holy grail to decarbonizing, electricity will rise as a closer contender for creating metals and alloys in a more sustainable way.

A Rise in Electric Vehicles Creates a New Emphasis on Sustainable Battery Supply Chains

A greater push for a green energy economy driven by the new administration and a growing consciousness amongst consumers will lead to an increase in sales of electric vehicles across the US and the world. While these cars are a climate-friendly alternative to gas vehicles, the batteries that power them are expensive and are hard to source, reuse and recycle. In 2021, there will be more work done across every part of the supply chain to improve on the batteries we now use: how to make them cheaper, recharge faster and last longer, while building a more sustainable supply chain around them.

The Future of Agriculture and Farming:

Julia Reichelstein, Investor, Piva Capital

Farmers Will Turn to Robotics to Fill Labor Gaps

As more U.S. farmers continue to battle devastating labor shortages, a problem exacerbated by COVID-19, expect to see a rise of autonomous robots in agriculture augmenting human effectiveness and driving efficiency in farming. While the technology is nascent, advanced computer vision and new prototypes will soon drive robots through farming fields amidst tough weather, treacherous mud and even pesky bugs. With these advancements, robots will be able to perform a number of once-manual tasks, from weeding to harvesting, especially taking a first hold in high-value speciality crops. Driven by AI technology gains and customer urgency, we’ll start to see a rise in VC funding in this area.

Agtech Key to Unlocking Net Zero Goals

Companies, governments, and even individuals will continue to make bold Net-Zero emissions goals in 2021. Achieving them will require a carbon sequestration strategy — not just cutting down emissions, but actively contributing to negative emissions as well. One of the most efficient ways to sequester carbon today includes tree-planting and regenerative agriculture, where more carbon is sequestered in the soil. Carbon (sequestration) credits will continue to be a hot button issue if they are actually helping to lower overall emissions or just trading it around, but demand for these credits will continue to rise as more companies incorporate them into their Net-Zero strategies. Given this, large corporates will join forces with voluntary carbon market platforms, and agtech startups will work directly with farmers to measure and sell carbon offsets. Measurement technologies will be increasingly relevant as a new Biden administration potentially pushes regulation on heightened carbon disclosures. Investments here will provide farmers with incentives to implement sustainable practices as they get paid for their part in capturing carbon.

Ultimately, whether it’s a rise in autonomous robots in factories and farms to increase efficiency, a new found focus on addressing the decarbonization of industrial sectors, such as cement, steel, aluminum, and chemicals, or advancements in alternative seafood, 2021 is setting out to be another year of promising innovation. As our world continues to digitize, the opportunities and the impact the digital revolution will have on our lives are endless. As investors in the future of industry and energy to the future of materials and production — we look forward to another year of discovering more disruptive technologies that will help shape our world for decades to come.

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