Social media concept of browser and smartphone. 3d illustration.
Mark Twain famously said, “History doesn’t repeat itself, but it often rhymes.”
We see this in all areas of fashion, social issues and even politics. What may surprise you is the extent to which we see it in the tech industry.
Patterns and topics that used to be trendy in technology go from the front and in the center via the fading of relevance to the next cool trend.
High-growth companies and start-ups in the cleantech, climate tech, social media and fintech categories have developed from an unpopular and radioactive area into one of the most sought-after areas for technology investments.
What has changed? Let’s start with clean energy and air conditioning.
A growing collective awareness of the impact and importance of attack problems related to energy use, climate change and sustainability has evolved from a niche problem to a frontrunner for founders and investors.
According to BloombergNEF, a research subsidiary of Bloomberg Finance, a record-breaking $ 17 billion was invested in technology companies addressing climate change challenges in 2020.
This reflects data from PwC, which indicates strong and growing interest from venture capitalists in climate tech companies, which represents an estimated $ 60 billion in capital between 2013 and 2019.
The amazing adoption of electric vehicles like Tesla and others in recent years has certainly helped change the perception of whether it’s cost effective and whether it’s cool to do what’s best for the environment.
Compare this to the 2000s when big-name venture firms were publicly criticized for their big cleantech bets that ultimately don’t pay off. This pushed a degree of fear and skepticism into the sector, which no doubt resulted in less investment for some time. Now the tide has turned for more innovation.
In addition to cleantech, social media technology is another category that also has a significant pull.
First, TikTok quickly garnered a following that attracted the attention of consumers and media insiders alike. Then Clubhouse carved out a niche in a burgeoning medium of social audio, followed by Twitter’s Spaces and others.
It wasn’t long ago speculation that Instagram and Snapchat would be the last modern day social platform. The feature parity and nearly identical design styles made it indistinguishable for users to see significant differences between some products.
In many technical circles, many years ago before my experience, there was a point where it felt like people were devaluing how much more social networks and platforms could innovate to become something new and exciting.
Late last year, Silicon Valley venture company Andreessen Horowitz emerged as a proponent of the issue when it announced that social tech growth was roaring back.
Since then, we’ve seen hundreds of millions of dollars of capital poured into startups exploring social issues in new and creative ways.
Now let’s talk about financial technology or fintech companies.
Consumer and investor engagement across all areas of the fintech industry seems to be on the cutting edge and is being fueled by companies like Stripe, Robinhood, Coinbase, SoFi, Plaid and others from across the industry.
The general growth of cryptocurrency and potential innovations related to decentralized financing, often referred to as de-fi, have opened the doors to a wave of new ideas that could lead to significantly more startups in the field, with capital investments likely to follow.
Given how the GameStop and Reddit drama unfolded earlier this year, the world has a chance to see what others already knew it was unfolding with mobile financial platforms like Robinhood and others. Consumers want to use simple technology to trade more actively with the markets.
It is clear that a lot is happening in fintech at the moment and it could stay here.
Global investments in fintech companies amounted to nearly $ 105 billion in 2020, largely due to venture capital investments, according to a report by accounting and tax services company KPMG. This is the third highest annual investment for the category ever.
We see consumers and entrepreneurs returning to many of the ideas and behaviors that were once very popular but were dwarfed a little to take advantage of new innovations and establish better products.
We should celebrate this.
The success of climate and cleantech companies in this category could benefit society by increasing efficiency, reducing waste and saving energy.
The continued growth of social tech investments, along with fintech investments, will offer new and hopefully better ways for people to connect with each other and with the financial markets.
Given the size of the investment, the growing volume of newcomers to the field, and the long time horizon it takes some companies to develop, we could still be in the early days of this revitalized sector boom.