Consumer businesses that VCs loved in '16. Will love more in ‘17.
The paradigm of consumer space has changed drastically in the last few years. From a pre-e-commerce world to the checkout-free stores of Amazon, the delta keeps getting bigger each year. For 2016, we looked at various sectors and the business models within to identify exciting investment themes. Here are some insights and patterns that emerged in the consumer space.
Convenience and essential services continue to be lucrative
With hectic lifestyles and skewed work-life balance, businesses that build platforms for offering more convenience to the customer have (naturally) gained even more prominence amongst investors. These include Online grocery products retailers (such as freshdirect), Home maintenance and repair services (such as TaskEasy) and platforms for Rental residential stays (zumper).
Grooming-based businesses on the rise
Consumer-based grooming and personal-care businesses with robust business models grabbed investor attention in 2016. Internet-first private labels (such as Stance) and platforms retailing Beauty products online-first (like memebox) are two models from the grooming space that have attracted VCs’ attention in 2016, owing to their simplicity and scale.
Bright road ahead for those bringing the party online
Besides online-first marketplaces, the other category that seemed to gain attention is of tools that enable firms to bring their businesses online. These include On-site marketing tools for retailers (like bloomreach) and Enterprise solutions for vacation property rental managers (companies like LeisureLink) . While the former are solutions that help engage customers with personalized content and product recommendations, the latter are companies building platforms that help property managers/owners with reservations, property and guest management, marketing and accounting etc.
More power to innovation and entrepreneurs
With more bootstrapped startups, freelancers, and digital nomads than before, the demand for managed co-working spaces is northwards. This has pushed the Platforms for renting such spaces (such as TechSpace) on hourly, daily or monthly basis. Companies in this space raised $700 million across 12 deals, the highest of all the exciting themes in consumer space. That speaks volumes about the faith of investors in entrepreneurs, at more than one level.
These are some of the investible themes in the consumer space. The Tracxn research team has put together a total of 100 such exciting themes from 2016. You can get your free copy here.
Note: I lead the Consumer Tech function at Tracxn. Through this article or ebook, neither Tracxn nor I endorse any startup or investor. If you have any suggestions or queries, you may get in touch with the research team on [email protected].