Looking into the VC crystal ball

Three venture capitalists at the Web Summit conference in Dublin give details on where their money will be going in 2016.

Looking into a crystal ball for the next big investment opportunity is always risky, but at the Web Summit conference in Dublin, three venture capitalists gave some details on where their money will be going in 2016.

“I’m going to continue investing in the blockchain and as we see the infrastructure get more robust I think we’re going to be able to see a lot of different asset classes being built and transacted on the core infrastructure and platform,” Jalak Jobanputra, the founding partner of early stage venture capital firm FuturePerfect Ventures, told the summit.

“What I’m actually thinking about a lot is this post-smartphone world. So we’re talking a lot about smartphones and a lot of the world is still getting onto smartphones but it goes on to the wearable conversation and the internet of things, and the blockchain is going to power a lot of that,” she said.

For Ryan Sarver, a partner in the Silicon Valley VC firm Redpoint Ventures, healthcare is one to watch.

“We’re really excited about healthcare and the changes that are happening there. I think some major companies are going to get built,” Sarver told the audience.

Meanwhile, Dave McClure, angel investor and founder of VC fund 500 Startups, believes financial services will be in focus in 2016.

“Financial services, both in the consumer and small business area, are really interesting, particularly combining social platforms with lending. I think we’re going to see a lot of disruption in the lending space with social networks informing credit scores and whether people are able to borrow money.

“One that’s really basic that we look at is visual systems in combination with commerce. So pictures, video and eventually AR and VR combined with commerce,” he said.

On the subject of whether Silicon Valley is in a bubble right now, the three investors had different views, with Jobanputra saying that valuations are “unhealthy right now”.

“I think valuations at all stages are ahead of themselves,” she said. “I’ve invested through two downturns, I’ve been a VC since 1999 and I was out in the valley in ‘99 so I worry about valuations getting ahead of themselves because then there’s nowhere to go and then you start to see a lack of exits, which we’re starting to see, and then that just slows down all the capital going in.”

McClure and Sarver were quick to disagree.

“I think that people are probably a little oversold on the valley falling apart next week,” McClure said. “Relative to five-to-ten years ago I think there’s a hell of a lot of companies producing things of value, generating revenue, even occasionally being profitable.”

“The public markets have stayed pretty rational which then keeps a cap on everything that’s happening in private markets. So I worry about it less from that side. Overall I think it’s generally healthy. The major trends around public markets have been pretty good,” Sarver said.