5 smart European VC predictions for 2016

5 smart European VC predictions for 2016

crystal_ball_europeLast year’s Predictions on the State of VC in Europe 2015 proved so popular that I decided to do it again. Here are some insightful predictions for 2016 from five of my more prophetic peers.

Dmitry Chikhachev, Runa Capital, Russia

I would predict 2 trends for VC in Europe in 2016:

1) a growing number of cross-border deals, more and more formerly country-specific VCs recognize that the only successful model is to become pan-European player and to search for truly global champions across wider geographies.

2) a growing number of deals originating in Russia, where weak local currency and lower competition for excellent tech talent led to unique conditions for starting up a tech business: low cost of local product development combined with focus on sales to global markets create strong leverage for early stage investors.

Antoine Nussenbaum, Felix Capital, UK

For 2016 I see a new wave of Lifestyle Digital Brands (Fashion, Food, Well-being) emerging throughout the efficient use of social platforms such as Instagram, SnapChat and others. I also predict further consolidation in the European food tech & logistic sector. Further away from Felix’s space, I see Facebook making a huge impact on the enterprise world with Fb@work. Finally, 2016 should be a year bringing a bit more clarity between “unicorns” and unicorns with down rounds/rationalisation for some and successful IPOs for others.

Rodrigo Martinez, Point Nine Capital, Germany

Bitcoin: A bank will launch an altcoin. It will flop because they underestimated how hard it is to build network effects. We still won’t be able to explain the drivers for the volatility in the bitcoin price and the growth in the number of transactions — but everybody will have a thesis for it. A winner use case for bitcoin could emerge. My bet is on enterprises’ and SMBs’ using bitcoin-powered services for international payments. [note: more great predictions from Rodrigo on his blog]

Paul Jacquin, Randstad Innovations Fund, Switzerland

After the exuberance in financing and growth in the US in 2015, I expect that Europe will constitute a relay in 2016: a stronger dollar, cooling US and Chinese economies will prompt large or well-funded American companies to look at Europe to sustain investor demands. The volume of acquisitions and investments will remain a question mark. Barring a political or external crisis, Europe offers nice arbitrage opportunities in its access to a large pool of cheaper expertise and a potentially attractive market. Mobile as a channel, as well as further disintermediation of industries and processes (e.g. online platforms) will feature highly in the coming 12 months.

Frank Maene, Volta Ventures, Belgium

After a couple pretty hot years, including all the noise about unicorns, 2016 should see a more sedate, yet pretty active VC funding landscape. Let’s remember that the -if any- bubble is purely in the private markets, as opposed to the public markets during the Big Internet Bubble of 1999-2000. Adyen was the first unicorn from the Netherlands, and I expect that there will be more to follow in 2016, with as most likely candidates Elastic, Catawiki and Thuisbezorgd.nl. For the others that received their first round of funding in 2014-15, much depends on whether they achieved sufficient progress to score follow-on funding at higher valuations. I hope there will not be too much gloating about some air going out of the unicorn bubble.

Indeed, I hope so too…