Why Enterprise Tech is Dominating Venture Capital

As our technological world rapidly evolves around us, venture capital always strives to follow close behind. Facing a seemingly daily influx of new innovations coming to market, there’s certainly no shortage of trends to chase for investors looking for the next hot growth opportunity. Our constant challenge is to look past mere flashes-in-the-pan, identifying long-term secular trends that are here to stay.

Here’s a strong indicator of one such shift: enterprise technology companies attracted $30.42 billion in funding last year, outpacing their consumer-tech peers (by a third) for the first time in five years. This recent trend reflects a deeper evolution at play, located at the intersection of software development, adoption of cloud technology, and data analysis—and as investors have clearly wagered, we’re still at the early stages of this sea change. By diving into the key factors driving enterprise tech’s dominance, we can see how it arrived at this inflection point—and why it will keep growing right on course.

  1. Every company is becoming a software company.

From D2C retailers to established financial institutions, the underlying technology of 21st-century businesses enables everything they do, from payments to CRM, cybersecurity, information management, application development, and beyond. And as the modern customer’s expectations for speed, service, and feature velocity set an ever-higher bar, enterprises are now attempting to meet that standard by developing and deploying new enhancements for their digital workflows. While their ambitious digital transformations carry promises of returns in both efficiency and revenue, they also come with (Read more...)