What’s next for business technology?
Mark Sherman, Managing Director at global VC firm Telstra Ventures, highlights the key disruptions and innovations that will shape the tech world in the coming year.
1. Common language for crypto and metaverses
After announcements from Facebook and Microsoft in 2021, metaverses have fully entered the public consciousness. But with multiple metaverses that promise new ways to interact with the world, how will these metaverses interact with one another? There is no winner-take-all dynamic here. We need interoperability and common infrastructure. In 2022 we’ll see innovators rushing to define and refine a ‘translation layer’ that allows for transactions, regardless of fiat, crypto or NFTs being exchanged across different platforms. This same infrastructure would connect and confirm our identities across siloed metaverses, helping to build a global, virtual economy. And from a user perspective, one metaverse inhabitant could buy a virtual item with Bitcoin, while the seller receives Ethereum or Solana —in a different metaverse. We’re even seeing this happen today in the real-world with traditional sports athletes opting to be paid in crypto vs. fiat currency.
2. A stampede of decacorns
Today, there are 41 companies around the world that claim the title of ‘decacorn’ ($10B+), while new unicorns pop up every week or so. We anticipate this number will triple in the next five years, with the majority focused on data, AI or the digital world. If you look at the S&P 500, there are 68 info-tech companies – more than any other sector. On the international stage, 39 of the Fortune Global 500 are technology companies, with two in the top 10. The major advantage of digital businesses is that they’re primed for a global consumer base. Netflix, for example, built on domestic success to offer original programming in 40 countries and in 21 languages, in just a few years. ‘Physical’ companies simply cannot move at the same pace.
3. The rise of customer data infrastructure platforms
Customer data will become even more vital to businesses. To ensure this data is secure, transparent and responsive, more companies will need to embrace Customer Data Platforms (CDP’s) to manage these complexities at scale. Shortening development cycles and the reliance on more ecosystem partnerships to drive more sales, adoption and retention will only add to the customer data complexity. As such, CDP’s will become a bigger focal point for the integration and orchestration of even more data pipelines and competitive advantage. In return, customers will ask more critical questions about the value they’re getting in exchange for the data they’re sharing. Trust could become a bigger disruptor in 2022.
4. China’s B2B fintech future
A recent EY report found that 87 percent of digitally active Chinese consumers access some form of fintech service – the joint highest level in the world, alongside India. So it’s no surprise that many Chinese fintech companies are dedicated to supporting and improving transactions for huge consumer platforms like Alibaba and JD.com. But now we’re seeing that China’s B2B and B2B2C sectors are growing rapidly too. In 2022, this will kick-start a virtuous cycle of rapid innovation and development: fintechs will drive business advantages for China’s enterprises and SMEs, further feeding demand for their services. This will, in turn, pave the way for more innovation and new companies, at a time when anti-trust and data privacy protection acts are helping start-ups to compete fairly with the larger players. XTransfer, for example, is a company that enables rapid, cross-border transactions, and is expected to support Chinese companies’ international business. In short, we see a potent blend of appetite, space in the market and sympathetic law-making.
5. More inclusive fintech solutions
COVID-19 has accelerated consumer adoption of fully-digital fintech solutions and increased trust for new models of banking and lending. Yet, this wave of fintech adoption has left behind subprime customers and historically marginalized, rural, and low-income consumers. We will continue to see increased investment in making fintech more inclusive and accessible through innovation in underwriting, credit-scoring, allocation, and management. This shift to make fintech more inclusive will permeate to businesses, where we are already starting to see companies like Pipe and Capchase redefine cost of capital by leveraging data and embedded finance.
About the Author
Mark Sherman, Managing Director at global VC firm Telstra Ventures. Telstra Ventures invests in market-leading, high growth technology companies with exceptional products and leaders. Committed to supporting groundbreaking, high-growth technology businesses, Telstra Ventures offers synergy revenues to its portfolio companies and financial returns to its limited partners. Since 2011, it has invested in over 80 companies and has offices in San Francisco, Sydney and Shanghai. Telstra Ventures is backed by two strategic limited partners: Telstra, one of the largest global telecommunications providers, and HarbourVest, one of the world’s largest private equity funds. Big ideas. Exceptional people. Extraordinary innovation. Welcome to Telstra Ventures.
Featured image: ©Boscorelli