This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.”
He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him on Nostr @reggae. The Japanese translation of this article is available here.
Years ago I began publishing an annual list of technology predictions in order to provoke constructive dialogue and highlight insightful female VCs globally.
In continuity and upon popular demand, here are forecasts from six professionals who are poised to make an outsized positive impact on the venture ecosystem in 2024.
Happy year-end festivities to all !
Kathy Matsui – General Partner, MPower Partners
1. Return of ESG: While 2023 saw criticisms such as ‘greenwashing’ negatively impact ESG sentiment around the world, we actually interpret this as a positive development, as greater investor and regulatory scrutiny on ESG substance is likely to result in better-quality disclosures and enhanced value creation over the long-run.
2. Japan’s IPO and M&A market comeback: Similar to other markets, Japan’s IPO market cooled off in 2023, but assuming a global recession can be avoided and inflation/interest rates are under control, the domestic IPO market is well-positioned to recover during 2024. Moreover, with recent acquisitions of Japanese startups, we also see the potential for M&A to become an increasingly popular exit option.
Nearshoring in Mexico, especially in manufacturing and technology, is set for significant growth. This shift, driven by geographic proximity, cultural ties, time zone alignment, and cost benefits, positions Mexico as an ideal destination for U.S. companies looking to relocate operations nearby.
The technology gap for manufacturing, once seen as a hurdle, now presents a unique opportunity for Mexican companies to develop technologies that enhance quality, efficiency, and innovation. This progress is attracting, and will continue to attract, considerable venture capital investment, with a steady rise in foreign direct investment in Mexico, reflecting confidence in its growth potential.
We expect the impact of nearshoring to be substantial. As local companies bridge the technological gap, they draw more venture capital, spurring innovation and growth. This creates a dynamic ecosystem where technology and manufacturing merge, potentially establishing Mexico as a high-tech manufacturing hub in the Americas.
At Nido Ventures, we are actively investing in this nearshoring wave, targeting companies directly or indirectly enhancing nearshoring efficiency. The upcoming year is likely to witness significant strategic partnerships, increased venture funding, and a rise in tech-driven startups in the B2B realm, further consolidating Mexico’s global economic position.
Yuri Nakayama – Director, Animal Spirits
In 2024, I will continue to focus on the trend in the climate tech sector as in 2023. The Paris Agreement, adopted at COP21 in 2015, has led many countries/companies around the world to declare carbon-neutral objectives. In order to achieve the goals, technological breakthroughs are imperative, thereby founding new startups and investing in these startups is becoming an increasing priority. Moreover many venture capital funds specializing in climate tech have been established.
Following the global trend, attention and funding for the climate tech sector are growing also in Japan. Initially, the software domain was the first to gain momentum, but recently, the Deep Tech sector also seems to raise a lot of money from Japanese VC as well. Given the fact that Japan is one of the major emitters of greenhouse gases, taking measures for decarbonization is crucial, and I expect this trend will continue.
Yoko Gocho – Venture Capitalist / Manager, Capital Medica Ventures
In 2023, impact investment and impact startups attracted more attention than ever in Japan, with the birth of several new impact investment funds and the first impact IPO.
I expect this trend to accelerate in 2024, but as the number of players increases, the value of simply being an “impact investor” or “impact business practitioner” will relatively diminish, and the substance of one’s business will come under greater scrutiny. I believe that the question will be whether or not a company is implementing the PDCA cycle to improve the outcomes it creates through impact measurement and management (IMM), and whether or not it is making a contribution to the impact it creates (would it have been achieved without its own business?).
This applies not only to startups, but also to investors. As a practitioner of impact investing, I will be working even harder to ensure that the contribution of investors will be strongly questioned by both society and entrepreneurs.
I believe that 2024 will be the year when the evolution and fusion of AI technology and immersive experiences, as well as IP (intellectual property) and UGC (user generated content), will be key to a major breakthroughs in entertainment and purchasing experiences. Immersive experiences where consumers are directly part of the content, be it movies, music, games, or culture, and the UGC that emerges from these experiences will influence each other, and personalization through AI will create more vivid and lively entertainment experiences.
The purchasing experience will also reflect consumer preferences, transforming the buying process itself into a personalized and entertaining experience. The evolution and democratization of AI will provide consumers with unprecedented levels of customization and immersion, and will also open up new dimensions of communication and creativity, leading to a new cultural paradigm that will shape the lifestyles of the future. I look forward to riding this wave of change without fear.
Mayumi Wakebe – Investment Director, Shizen Capital
By 2050, the population of the African continent is expected to reach approximately 2.5 billion (1/4 of the world’s population), which means that it is a large and young market as well as a treasure trove of human resources.
In addition, under the African Continental Free Trade Area concept, the liberalization of intra-regional movement of people and services and the move toward a single market have begun. With this potential, along with various global players, the African diaspora born in Europe and the U.S. are entering the African economy as startups and VCs with funds and networks. African governments are also paying attention to startups as a driver of economic growth, and regulatory reforms and collaborative projects are flourishing.
Compared to the $6.5B investment in Africa as a whole in 2022 (including $1.6B in Debt), venture investment in 2023 has declined considerably. In addition, while there were notable Exits, such as the InstaDeep acquisition ($682m), there were also down rounds and closures of startups that had been talked about in the media. In other words, it was an important year for raising awareness of DD , organizational management and changing economic conditions (e.g., supply cost spikes, currency, etc.), as well as for increasing the number of Exit examples.
In addition, the quantity of existing and new Africa-focused funds, both domestic and international (including some great funds from Japan), continues to increase in pursuit of financial returns and business synergies. Therefore, 2024 will be an active year in which more investments will be made than in 2022, and I would like to get involved in activities to encourage this trend.