Happy New Year – welcome to 2022! At the beginning of every year, we are optimistic about the possibilities for the year ahead. After a booming 2021 for the European ecosystem, we can’t wait to see what 2022 has in store.
We caught up with some European investors to find out about some of the top startup trends we can expect for the year ahead, how they think these trends will evolve, and which European startups we should watch out for.
The startup ecosystem could not get enough of Web3 in 2021. Globally, there are 65+ crypto unicorns, and 40+ were founded in 2021. We are still at the beginning of Web3 with its bullish early adopters. In 2022 and beyond, we will continue to see more Web3 startups, applications, and use cases.
Web3 is a chunky and broad area to unpack so we have split Web3 into 4 themes: DAOs, Creator Economy, NFTs, and security for Web3.
DAOs (Decentralised Autonomous Organisations)
Rockman’s thoughts and predictions on DAOs:
“DAOs will reshape how we think about labour, how we get rewarded for contributions, organisational decision-making and distribution of capital. It’s still the early innings for DAOs and there are many challenges left to be solved relating to performing tasks and getting rewarded in tokens, such as unclear boundaries of what constitutes as employment, what taxes to pay, what to report and staying compliant to local laws and regulations. We will see increasing numbers of companies building the tech stack and infrastructure layer to enable the mass adoption of DAOs. One to watch out for: Aragon (Switzerland), a platform for decentralised governance and DAO tooling, built on top of open-source infrastructure.”
NFTs (Non-fungible tokens)
Beata’s thoughts and predictions on NFTs:
“For the creator economy there has always been a gap between Europe and the US in terms of companies created and funding. Europe is starting to catch-up but there are still differences between the two ecosystems. One example in the case of Web3 is asset creation. What we have mostly seen so far in Europe is companies supporting centralized asset creation with decentralized ownership. I am thinking about companies such as Sorare (France) and Axie Infinity (Vietnam/Norway). Versus in the US, and in Asia, where we have seen more tools supporting also decentralized creation and asset marketplaces (e.g OpenSea and SuperRare). I want to see more tools in Europe supporting the individual creator.”
Some startups that Beata is excited about in the NFT space:
- NFTPort (Estonia): Super interesting dev tool which is enabling more companies to easily integrate NFTs in their product. Aims to help democratize the NFT space.
- Scapin’ (Sweden): Metaverse company in the early innings of their journey who will be an important part in becoming a destination for you and your NFTs. Bringing more value to NFT holdings other than speculation.
- Envoy (Belgium): Another company providing ways to bring more meaning and community around your NFT holdings.
Both Beata and Rockman shared excitement for the creator economy in 2022.
Beata’s thoughts and predictions:
“I am very bullish on the creator space as a whole, 30% of tweens in the UK want to become an Influencer/Youtuber and at the same time the concept of being a creator is expanding far beyond this typical stereotype. One of the things that I am bullish about is tools that are helping creators leverage the possibilities with Web3 and the community. The strength with Web3 for creators is the possibility to directly “own” the relationship between you and your closest fans. One example is the community around Gary Vaynerchuk called VeeFriends. I want to see less well-known creators being able to easily build similar structures for their communities.”
Rockman’s thoughts and predictions:
“In the first 10 months of 2021, $3.7B has been invested in over 100 Creator Economy startups, and this trend will continue to accelerate in 2022. Creators are increasingly exploring new ways to generate income and diversify their revenue streams. This will lead to more tools and platforms being built for service creators and we will see the Creator Tech Stack being more verticalised, and possibly even some consolidations. To date, the majority of creators are musicians, photographers, artists and content generators but there will be a shift towards catering for professionals who want to monetise their skills and passion. One to watch out for: Mana (UK), empowering tech leaders, career advisors and many others to host 1:1 sessions, offer live classes and build long-term follower bases who fund their work.”
Security for crypto and web3
Rockman’s thoughts and predictions:
We are barely keeping up with repelling cyber attacks in Web2 so it stands to reason the next battlefront will be Web3. There isn’t a day that goes by without Discord bots hacks, server hacks, channel takeovers, DeFi rug pulls and this isn’t going to slow down as more money continues to flow into crypto and Web3. Areas such as digital identity, Blockchain security and analysis, crypto recovery services, zero-knowledge rollups (ZK-rollups) will take centre stage. One to watch out for: Elliptic (UK), helping businesses make the crypto economy a safe place to transact and invest by managing financial crime in crypto.
Future of Wealth Management and Personal Finance
As Gen Zs are entering the workforce and starting to accumulate wealth, they are becoming savvier about managing their finances and entering the world of investing. Gen Zs influence on this industry is causing ripples in how they invest as well. We caught up with Clarisse Lam, who’s a Fintech and insurtech investor at New Alpha and is excited about the future of wealth management and personal finance.
“The next generation of investing includes new asset classes and products like fractional ownership, crypto, NFTs, and other alternative assets. The space around wealth management and personal finance management is crowded with lots of products available to get customers to start investing and manage their finances. Despite there being lots of products available and lots of fintechs pivoting to be in this space, there is a lack of education to help customers make informed investment choices as these companies are optimising for revenue and not focused on helping customers make sensible investment decisions.
In the upcoming year, there will be more super apps where customers can manage all their finances on one platform – think of a platform where customers can buy and sell a catalogue of different asset classes. For example, Revolut is already heading towards this direction with the ability to buy and sell crypto, stocks, and even take out a loan. Over the next few years, there will be a clear winner that will dominate this space.
Community is a concept that is extremely hot in tech. We should expect to see that there will be more communities around wealth management. This is already something that is an emerging area.”
Some startups that Clarisse is excited about in this space are:
- Zash (UK) – a social investing network for crypto investors
- Finary (France) – building a personal finance OS with a multi-asset investment portfolio tracker. Plans to build a private bank for the mass affluent
- Tacotax (France) – a hybrid personal finance management platform to help customers with a range of finance matters from preparing for retirement, mortgages, to completing taxes.
- Cleo (UK) – AI-powered financial assistant to help people on their journey towards financial health
Climate Tech and Sustainability
2021 was a breakthrough year for climate tech with an unprecedented amount of capital being poured into the space, numerous climate tech companies raising significant rounds, and COP26 was a significant catalyst for climate-focused regulation.
In 2022 and beyond, we will see even more capital being deployed into this space. We caught up with Cecilia Manduca, who focuses on climate tech investments at Talis:
“While 2021 saw bonanza rounds of quick commerce startups like Gorillas and Getir, we believe that 2022 will be the year for climate tech startups – in particular, carbon accounting companies, a new breed of software-based solutions aimed to help businesses. B2B carbon accounting will soon become a must-have for most companies and will likely become a huge market with a number of different players to accommodate different sectors as a result.
At a VC level, we expect to see more generalist funds raising dedicated climate tech funds separate to their traditional funds, which we expect to have with longer fund timelines: many climate tech startups are so-called ‘moonshot’ ideas, which will require enormous amounts of capital as well as much longer timescales than seen in traditional VC models.”
Here are some startups in the space that Cecilia is excited about:
- Phase BioLabs (UK) – The petrochemical industry (the cue is in the name!) is one of the most polluting industries on the planet. Phase BioLabs are turning CO2 into chemicals, taking a circular-economy approach to decarbonisation, producing potentially identical products and removing CO2 at the same time.
- Anaphite (UK) – utilising graphene to improve lithium-ion batteries, which will enable faster EV adoption
- Genomines (France) – bioengineering plants to extract more metals. The single biggest barrier to sustainable energy transformation is the lack of key metals like nickel and lithium, which are key for batteries, windmills and more. Genomines has found a way to tackle that.
- Materra (UK) – growing cotton sustainably on unfertile land. Thousands of farmers in India rely on the cotton industry for survival, but the changing climate is threatening their livelihoods by drying up terrains. Materra uses technology to grow cotton sustainable on unfertile lands, allowing the fashion industry to decarbonise its supply chain