Since most countries introduced lockdown due to the coronavirus pandemic, most of the industries experienced dramatic damage, yet IT managed to adapt much faster than the others. The needs of society have changed, and that means that the IT areas aimed at covering these needs become in demand.
Sergey Kartashov (Sergejs Kartasovs), CEO of the Cypriot asset management company Generation Partners, tells us what happened to the IT world and how it affected the choice of investors when picking out new startups to invest in.
Cybersecurity
According to recent research, more than 40 percent of companies worldwide have experienced cyberattacks. These are mainly phishing and malware attacks that can be to a certain extend prevented if a company uses proper cybersecurity service. That is why Sergey Kartashov names startups providing IT security services the most popular now.
The demand for such services is huge, and even all the large cybersecurity companies together cannot cover it. More than half of all the companies worldwide use digital technology and, therefore, are at risk of being attacked online. The IT companies that will be able to manage this problem can potentially bring a large profit to their investors.
Entertainment service
Entertainment service unites three groups of areas: video technology, gaming industry, and Home Service startups.
These are the services that emerged massively during the quarantine. With most of the movies, galleries, and sometimes even parks being closed, people became more interested in video games and movies. Life online became ordinary, attractive, and somehow even safe.
Another area that became popular is delivering all kinds of services right to a customer’s home. Due to the quarantine restrictions, many people prefer to stay at home for both working and spending leisure time. Moreover, almost half of businesses encourage their employees t work from home even after the quarantine restrictions are lifted.
That is why it is worth taking attention to startups that aim to cover the needs of people while staying at home. Even if the quarantine ends up suddenly tomorrow, people will tend to stick to such a comfortable service.
Artificial intelligence and machine learning
The Stanford University reports that investments in AI-based technology grew by 40% last year. The funding has been mostly raised for the companies that create self-driving vehicles, medical products, and all kinds of educational products.
According to Sergey Kartashov, AI and ML are now used in almost every key IT area. It is especially relevant for the companies that deal with big data, such as Netflix, Google, Airbnb, or Spotify. All of them have to customize their offer since their products are so numerous that it is simply impossible to offer them all.
AI and ML come in handy for smaller companies as well. For instance, AI can help doctors diagnose when attending a patient online or help governments monitor whether compliance with quarantine regulations is followed.
Infrastructure and cloud services
Another area that has received an impetus is the software as a service (SaaS) and cloud data.
‘Providing software, a data center, and an information processing center is a trend that helps a company get a number of benefits: reducing operating costs, saving on rent and energy consumption, and speeding up the process of working with data thanks to new technologies used in narrow-profile data centers,’ said Kartashov.
Sergey Kartashov reminds us that choosing a promising direction for investing is not enough for the final decision. An investor should thoughtfully examine all the aspects and factors regarding a startup they chose.