Seed investors favor enterprise over consumer for first time this decade
0Reported today on TechCrunch
For the full article visit: https://techcrunch.com/2019/12/30/seed-investors-favor-enterprise-over-consumer-for-first-time-this-decade/
Seed investors favor enterprise over consumer for first time this decade
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
It's the second to last day of 2019, meaning we're very nearly out of time this year; our space for repretrospection is quickly coming to a close. Before we do run out of hours, however, I wanted to peek at some data that former Kleiner Perkins investor and Packagd founder Eric Feng recently compiled.
Feng dug into the changing ratio between enterprise-focused Seed deals and consumer-oriented Seed investments over the past decade or so, including 2019. The consumer-enterprise split, a loose divide that cleaves the startup world into two somewhat-neat buckets, has flipped. Feng's data details a change in the majority, with startups selling to other companies raising more Seed deals than upstarts trying to build a customer base amongst folks like ourselves in 2019.
The change matters. As we continue to explore new unicorn creation (quick) and the pace of unicorn exits (comparatively slow), it's also worth keeping an eye on the other end of the startup lifecycle. After all, what happens with Seed deals today will turn into changes to the unicorn market in years to come.
How many unicorns will exit before the market turns?
Let's peek at a key chart from Feng, talk about Seed deal volume more generally, and close by positing a few reasons (only one of which is Snap's IPO) as to why the market has changed as much as it has for the earliest stage of startup investing.
Changes
Feng's piece, which you can read here, tracks the investment patterns of startup accelerator Y Combinator against its market. We care more about total deal volume, but I can't recomm