There's never any shortage of predictions during the New Year, and venture capital data researcher PitchBook is adding its voice to the flock of market seers.
While 2015 certainly was a tumultuous year for markets and the world economy, PitchBook analysts suggest the year ahead is likely to be a strong one, particularly for early-stage companies seeking financing. And certain sectors, like financial technology, are looking like prime investment bait. At the same time, late-stage companies that have dominated the spotlight in the past year may begin to shrink from view.
Here's a look at some of the predictions for the coming year:
1. Swooning valuations
Many high-flying unicorns, or privately held companies valued at more than $1 billion, saw their company valuations lowered during the course of 2015. (Snapchat, Zenefits, and Square are but three examples of companies whose private shares have been reduced by mutual fund company Fidelity.) Expect more pressure on valuations, says PitchBook, particularly as slowing global growth drags on the economy at home. And with valuations dropping and the initial public offering market appearing less attractive for an exit, expect more acquisitions of late-stage tech companies.
2. More Fintech deals
The amount of capital invested in financial technology companies nearly doubled to $7.6 billion in 2015 from the prior year, according to PitchBook. Among other highlights, online lender Avant raised a whopping $300 million Series E round. PitchBook says the trend may continue, especially in light of developments such as e-commerce company Rakuten's $100 million fund, launched in November, which is focused solely on Fintech companies. Expect more late-stage fundraising rounds from lesser-known companies, and more merger and acquisition activity with and among Fintech companies in 2016.
3. More money for seed-stage companies?
Much has been written about the crunch for seed funding, or Series A capital, but it's the mega-rounds of financing for more mature companies--there were close to 200 deals worth $100 million or more last year--that may really be in danger. PitchBook's analysts say VCs have lots of capital to spare for 2016, but they may turn their focus on earlier-stage companies.