Over Headline’s 25-year history, we've witnessed technological revolutions and market shifts, evolving alongside those changes through seven generations of Early Stage funds. All the while, we keep looking ahead to answer the most important question in venture: What comes next? Our constant exploration fuels this week’s Headline Lookahead series, where we map the exciting frontiers of 2024 in consumer, infrastructure, B2B software, and fintech.
Across the software stack, we’ve seen round sizes decrease and companies wait longer to raise capital (to find more efficiency), making it a more compelling time to invest. But while there is a slowdown in growth in the software segment, the overall CAGR is still growing 13-14% annually. This overall slowdown in growth has forced companies to shift spend to mission-critical software. Additionally, with the rapid growth of AI, the ease of building software has grown tremendously, which makes it important to go deep in workflows, to have a unique go-to-market motion, and to build a proprietary data set. As a result, we’ve put a greater emphasis on companies wedging into the market through specific verticals. Earlier this year, we shared an analysis on the current state of vertical SaaS and published a list of the top 50 up-and-coming startups in the category together with Bain Capital Ventures.
Some of the categories we are most excited about include healthcare, climate and energy, supply chain, and labor upskilling, which we surface below.
- Healthcare. With the trifecta of a growing aging population, pressures put on the market due to COVID-19, and new capabilities created by AI, healthcare continues to have strong tailwinds for disruption and can be super sticky if companies find the right wedge into distribution. (This has led to recent Headline investments in companies like Heard and Verse Medical).
- Climate and Energy. Energy transitions and the rise of Electric Vehicles across Europe and the U.S. mean we expect more unique models and infrastructure plays that will help move this market forward (like Monta)
- Supply chain. Companies face increasingly fraught supply chains, be it due to Covid collateral damage, heightened geopolitical risk, and a growing desire to decrease reliance on China.
- Labor and upskilling. More than ever, industries need to align with their blue-collar workforces by emphasizing training, skills, benefits, and safety, which will drive increased opportunities for startups to bring creative solutions across sectors (like PowerUs)
We believe this is a great time to invest in these technologies, and we’re excited for the opportunity to uncover the largest opportunities across these categories in 2024.