Ever since small and medium tech-oriented companies started to appear a few years ago, the startup business model has been the way most new ventures are established. With more startups now keeping the market saturated, we’re seeing some very fierce competition.
The market is expanding and we’re seeing healthy growth from the economy, but there are more startups today than there were when the trend started, which means your startup needs to be extra competitive to have the edge.
As we get closer to 2017, experts are anticipating another shift in trends among startups and new ventures. What are the top startup trends we should anticipate for 2017?
No More Burning Through Capital
Gone are the days of choosing a fancy office near the city center and going for a brand new Tesla P100D as a company car. This type of spending is what made a lot of startups fail in recent years. The newer breed of businesses and business owners are focusing on staying lean and efficient; this is a shift in the right direction.
A lot of business experts like Sam Ovens predicted this shift early. We’re seeing startups with extremely low expenses and overhead costs. Efficiencies are being made throughout all sectors and startups are pushing hard to limit their expenses in order to be better than their competitors. Lower overhead costs give these new businesses the ability to be more aggressive with pricing.
IoT and Smart Homes
Startups are no longer focusing on apps and services. There are plenty of new businesses based around building hardware and gadgets. Interestingly, these businesses are taking the same approach of app development and implementing that approach in product design and development.
Every new product is designed to answer a question or provide a solution. It doesn’t have to be a big problem or an important question either. A product can offer convenience and still be popular on the market.
The two product categories that will be big in 2017 are Internet of Things and Smart Home Appliances. These two categories are very close to each other, but while IoT includes all gadgets and focuses on the idea of interconnecting them, smart home appliances are designed to make a home, well, smarter.
There are some interesting new products being released in 2017. Vue’s new glasses are gaining a lot of traction on Kickstarter. The smart glasses work well with both Google Assistant and Siri, which make them even more interesting.
Crowdfunding and Crowdsourcing
Both crowdfunding and crowdsourcing are going to continue being popular in 2017. Startups are no longer aiming for extravagant valuation and a lot of investors. The focus of new businesses in 2017 should be the products and the stories behind them, which makes both crowdfunding and crowdsourcing the best approaches to take.
Through crowdfunding, a new business can bring their concept to life with the support of their customers. It is very similar to promoting a pre-order product, but instead of taking a lot of risks with the production, the company can get more support and take a safer route.
Crowdsourcing, on the other hand, enables startups to let customers – or potential customers – be involved in the development of a product. The design, programming and even the manufacturing process can be crowdsourced. The industry is much more prepared for global, multi-party collaboration, which has led to crowdsourcing being as powerful as it is today.
Ready for the Changes?
To succeed in today’s – and 2017’s – competitive market, your business must be able to keep up with new trends. While these three only offer small glimpses of what to expect in 2017, they should give a pretty good overview of how exciting the market will be. Are you ready for these new trends?
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This Is a $103 Billion Profit Opportunity
Investors in private startups pocketed a fortune last quarter…
According to a report released last week, they took home $103.9 billion.
That’s a record high — and as you’re about to learn, those profits are expected to keep flowing.
So today, I’ll show you why this is happening…
And then I’ll share two easy ways to get in on the action yourself.
How Private Investors Make Profits
Before I tell you how to take advantage of this profit window, let me back up for a moment…
Let me explain how investors in private startups make money.
Startup investors make money when a company they invested in has an “exit.” These exits happen in two main ways:
- When a startup gets acquired by a bigger company in an M&A transaction, or
- When the startup goes public in an IPO.
And as it turns out, Q3 of 2020 was a record-setting quarter for these exits…
A Record-Setting Quarter for Private Investors
The first half of the year was a disaster…
The coronavirus put a halt to everything, including exits.
But Q3 brought a massive uptick in activity.
For example, as you can see in the chart below (courtesy of PitchBook-NVCA Venture Monitor), exit value increased 292.5% versus Q3 2019.
That was the 2nd-highest quarterly total in PitchBook’s historical dataset, just behind Q2 2019.
What do all these exits mean for their investors?
They mean huge windfalls of profits!
(FYI, even when you factor in the winners and the losers, over the past 20 years, these exits have returned an average of 55% per year. At 55% per year, in 20 years, you could turn a tiny $500 investment into more than $3.2 million.)
Just six months ago, this sort of exit activity seemed impossible.
So what happened?
The 3 Reasons Behind These Profits
This burst of exit activity is due to three main reasons.
New Sectors Soaring: Covid-19 has given a boost not just to biotech, but to industries like Fintech, Edtech, and Telemedicine. The way we work, learn, and receive healthcare are changing — and innovative startups leading the charge are becoming valuable very quickly.
Macro Environment: Low interest rates and a booming stock market are giving investors confidence that innovative startups will command high prices as public companies.
SPACs: As noted earlier, M&A and IPOs are the two main ways that startups exit. But recently, a third way has gained in popularity: a “special purpose acquisition company,” or SPAC.
In Q3, public listings drove the spike in exits — IPOs like Snowflake (NYSE: SNOW), Asana (NYSE: ASAN), and Unity (NYSE: U).
The things is, as PitchBook explained, the strong performance of these stocks in the public markets will “likely drive more IPO” activity…
And for startup investors, it’ll drive more profits.
So — are you in?
Two Easy Ways to Get Started
Crowdability offers a multitude of free resources to make sure you see current startup deals that are available for investment…
And to make sure you know what to do once you find a deal you’re interested in.
For starters, look at our weekly “Deals” email. We send this out every Monday at 11am EST, and it contains a handful of new startup deals for you to explore.
Second, check out our free white papers like “Tips from the Pros.” These easy-to-read reports will teach you how to separate the good deals from the bad.
The profit window is now open — take advantage of it!
UK Fintech Modulr Reveals that its Dublin based Entity Is Now Licensed as EMI by Central Bank of Ireland
UK-based Modulr, a Payments as a Service API Platform for digital businesses, has revealed that its Dublin-based entity is now licensed as an electronic money institution (EMI) by the Central Bank of Ireland.
The Modulr team noted:
“This is an important step in enabling our European arm to provide efficient, scalable and reliable payment services to customers across the European Union.
As explained in a release, the European division of Modulr has been established to offer services to customers based in the European Union (EU). Modulr is focused on driving instant payments “expertise” into the Eurozone, in order to improve how wholesale and commercial payments are processed.
The Fintech firm provides payments infrastructure that’s used by established companies such as Sage, Revolut, Mode and Iwoca.
As stated in the announcement:
“Following strong business growth in the UK over the past four years, the newly granted EMI license will enable [Modulr] to offer [various] payments products, including its award-winning payments platform, through its powerful API to EU markets.”
Modulr also brings its expertise of real-time payments to SEPA Instant, which is the Euro’s instant payments scheme. As noted in the release, Modulr’s experience with Faster Payments will help it “unlock the potential” of the new scheme by offering convenient access for European software firms, merchants, and specialist banks.
The announcement also mentioned that the “true” potential of a digital API-based alternative to commercial payments will “rely upon an agile and efficient ‘behind the scenes’ payments process, which has historically been inaccessible and unaffordable to SMEs and enterprise alike.” As explained by the Modulr team, this information “comes from soon to be published research commissioned by Modulr, which reveals contemporary insight … into the hard cost of payment processes [and] the hidden impact on customer experience as well.”
Myles Stephenson, CEO at Modulr, stated:
“The opportunity for a digital alternative to commercial and wholesale transaction banking is significant as software businesses across multiple industry sectors are identifying the need to deliver new functionality and efficiencies to their customers by embedding payments in customer journeys. We plan to build a truly digital, frictionless payments infrastructure for software platform partners to provide new payment experiences to more than 500m people.”
Stephenson believes that his team has the experience and expertise in digital payments and API integration needed to offer key services to European businesses that are interested in streamlining how they make, receive and manage payments.
John Irwin, General Manager, Modulr Europe, remarked:
“Our digital platform and experience can transform the payments business. For too long, European payments have relied on the same technologies.”
Modulr has reportedly moved more than £40bn for clients such as Sage, Revolut, and Paxport through its platform which has “an uptime of 99.999%.”
Modulr offers this scale, reliability, and quality of service by investing in its own financial access and “achieving principal and direct access to critical payments.”
In September 2020, Modulr became the principal issuing member of Mastercard. The company had said that it would be offering more seamless digital payments solutions.
American Express and Coupa to Expand Partnership to Bring Virtual Card Payments to US Markets
According to a release, the American Express virtual Card payment option within Coupa Pay is now available globally, allowing companies to pay “smarter and simpler.”
Coupa (NASDAQ: COUP) and American Express had teamed up last year in order to provide better payment options. The release noted that they’re now ready to take their partnership to the “next level” as US-based customers now have the option to use American Express virtual Cards as a payment method with Coupa’s business-to-business (B2B) payments platform, called Coupa Pay.
As confirmed in the announcement, American Express virtual Cards are currently available in the UK and Australia. These payment options aim to effectively replace “outdated, complex, and inefficient payment processes” for businesses across the globe.
Customers are able to streamline how they pay their suppliers for all spend that’s directed or processed through the Coupa Business Spend Management (BSM) Platform.
The announcement further noted:
“As many companies continue to accommodate largely remote workforces for the foreseeable future, the expansion into the US continues to help meet the demand of customers who need a virtual way to pay suppliers and ensure their business continues to be operational.”
JR Robertson, vice president of Coupa Pay at Coupa, said that the pandemic has led to “widespread work from home policies,” which means that fragmented and manual business payment processes are not a legitimate alternative in a post COVID world.
“With Coupa Pay, Coupa and American Express are making it easier for our joint U.S. customers to thrive in this challenging environment by empowering them to pay using virtual Card technology.”
Trina Dutta, vice president and general manager of B2B Payments Automation, Global Commercial Services at American Express, remarked:
“By integrating American Express virtual Card capabilities into the unified buyer and supplier experience of Coupa’s … BSM platform, we’re addressing our customers’ need to digitize payments and thereby (potentially) becoming more essential to their operational needs.”
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