Q3 saw a steep dropoff in fintech deals, though NextGen Commerce saw a bit of a revival from previous quarters, with specific focus on consumer-oriented marketplaces and consumer education platforms. Healthcare platforms continue to attract investors, especially innovative patient communication tools, and space-age technologies - which have made a big splash on the West Coast - are increasingly finding a home in New York, with a number of drone, virtual reality and AI startups receiving funding in Q3.
The venture industry has been slower to reset from 2015’s red-hot funding and valuation rates than many anticipated, with many VCs responding to ongoing market uncertainty with diminished appetite for risk. Q3 2016 saw just 32 Seed deals, totaling $57.5MM. The quarter saw 29% fewer deals than Q2 and 57% fewer than this quarter last year. From a dollars standpoint, we’re now down 21% from Q2 2016, and 34% from Q3 last year. As it stands, the VC funding total for startups in 2016 is on pace to see a 25% drop from 2015.
We have long held that the biggest winners in NextGen Commerce are those direct-to-consumer startups that go up against monopolistic brands in huge markets, and provide an exponentially better experience for the consumer. While the larger, more established players have more shelf space in CVS and a generations-old brand presence, these younger players have the agility, pricing flexibility and innovative spirit to capture consumer attention in nontraditional ways. In this David vs. Goliath scenario, we’re increasingly seeing the Davids win out.
Beth Kaplan is an integral member of the Primary Expert Network. Having held executive-level roles at leading CPG companies and specialty retailers, including Procter & Gamble, Rite Aid, Bath and Body Works and General Nutrition Corporation, Beth transitioned over to the tech world in 2013 and assumed the role of President & COO of Rent the Runway. She’s as impressive in person as she is on paper, and has proven herself to be an expert in business strategy, brand marketing and product, all of which contributes to a stunning understanding of the customer experience.
Regulation that promises to upend the status quo in an inefficient and technologically devoid industry, combined with a $25 trillion market opportunity, provide fertile ground for innovation. In this case, that innovation is Vestwell: the industry’s only full-fiduciary, white-label defined contribution platform that enables financial advisors to better serve employees and employers.
Sam Jacobs is a strategic sales and business development leader with an extensive history delivering high growth for early-stage, venture-backed SaaS companies, including Gerson Lehrman Group and Axial. In his current role as SVP of Sales and Marketing at Livestream, Sam is responsible for the company’s Platform Products business, overseeing all sales, marketing and success functions for LiveStream's 10,000+ subscription customers.
Bounce Exchange, the leader in cloud-based behavioral marketing software and analytics, has been recognized as the No. 1 fastest-growing software company in the U.S., and the 7th fastest-growing company across all categories in the Inc. 5000! As investors, Bounce Exchange presented an incredibly exciting opportunity for us; it’s a rare convergence of our two areas of focus – ecommerce and SaaS – and the company represents the best of both worlds.