2 months ago
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As twenty-something-year-old investors enter the venture landscape, they bring fresh vibes and spot new trends that could become the next multi-billion tech businesses. Already, we are seeing some young investors carving out new niches.
Alex Chung, 26, is an investor at Chai Ventures. Her firm has backed companies like consumer health platform Unfabled and emotional well-being company MentalHappy. Chung says she’s taken an interest in how the broader ecosystem has reframed women’s health in the past few years. Women’s health has become a standout sector as much more money flows into it. Pitchbook found that the global “femtech” market — a term used to describe women’s health companies — raised more than $820 million in 2019, a number expected to hit $3 billion by the end of 2023.
Typically, women’s health companies are thought to only address menstrual health, maternal health, or menopause management. But Chung and her firm are interested in much more.
Drug companies were not legally required to include women in clinical trials in the U.S. until 1993, meaning the impact of many popular drugs and medical devices was never originally studied. Beyond that enormous research hole, there are other opportunities for health startups aimed at women. Deloitte found that women are typically the ones in charge of a family’s medical decisions, making at least 80% of a household’s medical spending decisions.
“We’re bullish on the expanded definition of women’s health to include companies that are creating innovative solutions to help manage chronic conditions that disproportionately affect women,” she said, citing certain thyroid disorders, endometriosis, and osteoporosis as examples. “Increasing recognition of women’s unique healthcare needs, coupled with advances in technology, makes women’s health a compelling space for investment and development.”
Over at Female Founders Fund, investor Layla Alexander, 25, says she’s interested in the care economy and enterprise climate solutions. She’s also quite bullish on women’s health. Though her firm is technically generalist, given its focus on women, it has always seen women’s health as an underserved market. FFF has Maven Clinic in its portfolio, the first unicorn in the women’s health space. Last year, women’s health companies raised 4.3% of the $26.5 billion invested into healthcare companies, according to a Forbes article. That is a substantial increase from the years prior, but there is still much work to be done, Alexander said.
“Despite the success of Maven and other businesses in this category, women’s healthcare remains underfunded and overlooked, presenting a massive market opportunity,” she told TechCrunch.
Then there is AI
Young investors are having a love-hate relationship with artificial intelligence — and are looking for ways to make this revolution more grounded in reality.
Zehra Naqvi, 25, an investor at Headline Ventures who writes the popular newsletter No GPs Allowed, is deadset on the consumer sector.
She likes technologies like the a16z-backed party-planning app Partiful, which helps merge the online world with the in-person — an effort she calls “IRL to URL.” She’s also into “AI social rehab,” or looking for tools that can make people better people and citizens of the world. She said right now many of the AI companion apps, those that purport to be one’s friend or partner, are reinforcing self-isolation. Because of this, some form of social rehab is necessary, especially since so many young people — Gen Z and Gen Alphas — spent critical formative years online during the pandemic.
“Think AI therapy apps, AI journaling, AI mental health, AI well-being apps, that encourage and facilitate human-to-human connections with guided self-reflection,” Naqvi said, whose firm’s investments include Bumble and fintech Acorns, and e-commerce platform Elyn. “It’s like prosumer tools but for greater efficiency, development, and progress with who we are as people.”
Plus, young people are going to be spending so much time online anyway, there might as well exist tools to make them feel less lonesome amid what has become America’s loneliness epidemic.
Naqvi also believes that every creator is bound to become a small business owner — a “solopreneur” — and that every “solopreneur” will inevitably become a creator. Naqvi sees a world where solopreneur tools become advanced enough to sustain individually operated businesses at massive scales. AI has a part in that too.
“As Sam Altman said, we’re getting closer to a one-person operated billion-dollar business,” Naqvi said. “To get there, we need a whole new generation of solopreneur tools and gig economy platforms.”
Besart Copa, a principal at the accelerator Antler who also has a consumer newsletter The Zero State, had similar thoughts. “We are at the precipice of a Cambrian explosion in consumer apps,” he told TechCrunch. “Artificial intelligence has given visionary founders new possibilities to reimagine how consumers live their lives. AI has also made it cheaper, faster, and easier than ever to ship.”
Lori Berenberg, 29, at Bloomberg Beta, is excited about another, perhaps simpler, aspect of AI. Her companies include legal timekeeper Ajax and construction payroll company Trayd. She is interested in software and user-centric applications that use AI as a tool, like Figma Slides’ tone dial, which uses AI to adjust sentence structure and language.
She says AI reveals what humans are good at, like strategy, problem-solving, and having gut intuition. But AI is in a good position to better software development, handling everything from data management to cloud setup, freeing developers from their most tedious work.
“Once the ‘wow’ factor of AI started to cool off and businesses seriously started looking at implementing new AI tools, many got stuck on the unreliable inconsistent results they get from generative AI,” Berenberg told TechCrunch. “It’s exciting to see how many founders have started using clever product touches or different system architectures to get more deterministic responses, both for end-user interactions and backends that use AI.”
As TechCrunch previously reported, AI companies made up 41% of all U.S. deals in the first half of 2024. AI and machine learning companies raised $38.6 billion out of the $93.4 billion invested in the first half of the year, Pitchbook reported. Last year, AI companies raised $27 billion, much of that money coming from Big Tech, the Financial Times reported. The flush of capital into the sector has some people debating on whether or not an AI bubble is coming for the industry.
And a reconsideration of some trends
But then come the trends that these young investors don’t believe will be successful.
Chung is not too keen on circular commerce – which is the process in which resources are kept in circulation to reduce waste – saying the industry still faces too many hurdles like consumer adoption and supply chain bottlenecks.
Copa has a problem with free apps. “Stop making free apps,” he said point blank. “Consumers are more willing than ever to subscribe to things. Put up a paywall and make money. If people are not willing to pay, pivot to something they will.”
Berenberg, meanwhile, thinks companies are prematurely focusing on optimizing infrastructure for AI agents, rather than building an AI agent that people want. Berenberg says people looking to build for specific sectors should take a step back and see how that industry would actually want to use an AI agent. That’s why she backed Ajex, which helps lawyers automate their billing timekeeping, something that should directly impact their revenue.
Alexander said she’s interested in AI tools that help advance research and health care delivery, but, at the same time, feels that many AI investments today are just “extremely capital intensive,” requiring so much infrastructure, talent, and data, without clarity on what the return-on-investment would actually be. It’s led to inflated valuations and what she considers to be “unsustainable funding strategies.”
“While I’m bullish on AI’s potential across investing categories, it’s crucial that we remain disciplined and focus on backing founders with sound, scalable business models,” she said.
Their fears match what many others have noticed. Naqvi is always wary of tech that becomes a trend and has seen a few of them — the web3 revival, and now the AI revolution. “I am not inherently against any particular trend, but I feel that AI is naturally at risk of overindulgence and may become too frothy soon.”
