From fintech to nanotech — startup verticals you should know
The startup ecosystem is made up of a lot of different vertical markets. Vertical markets are niches of the market that have a specific audience who has a distinct need or pain point. You have probably heard of some of the more common verticals. Such as fintech. You may have heard about nanotech. Especially if you are an Avengers/Iron Man fan. His latest suit (the one that slows encapsulates his body once activated) is a nanotech. It is important that you understand the various verticals that exist and the types of products or services that come out of the verticals.
There are two main reasons understanding these verticals is important. First, some verticals are hotter than others. For example, fintech continues to be a hot vertical. Raising venture capital as a fintech startup is relatively easier than in other verticals because fintech solutions are well understand at this point and there have been plenty of successful fintech exits. Another reason to understand these startup verticals is that investors tend to favor some verticals over others. If you check out the website of just about any venture capital firm they tend to list the verticals that they are the most interested in investing in. That is usually the case because they have some expertise in those verticals.
Fintech and other verticals
Today I am going to share some the startup verticals that are catching the attention of the investment firms that I regularly work with. You can find a nice list of other verticals on Pitchbook’s website.
Fintech, or financial technology, startups are those companies that are looking to innovate within the financial services space. I know this vertical very well since I work around it almost daily. Many people think only of the banking industry when they think of fintech solutions. While that industry is certainly a huge part of the space there are a lot of other industries, like investment management, that are part of the fintech vertical.
Short for insurance technology, this vertical is all about disrupting the existing insurance companies. Insurtech solutions not only look to disrupt areas such as car insurance. They also are evolving solutions in the health insurance space and beyond.
Back to Tony Stark’s latest Iron Man suit. Nanotech involves a combination of science, engineering, and technology conducted within a nanoscale. The word nano refers to things that are 1 to 100 nanometers in scale. For a reference point, a nanometer is one-billionth of a meter. We are talking ridiculously small molecules.
Biotech startups use biological science processes dealing with living organisms to solve problems. Biotech startups might play in the medical, industrial, or even agricultural sectors.
This is one of my favorite verticals because Cleantech startups are looking for solutions to help improve our environmental sustainability. That includes efforts around cleaner water sources, cleaner air, and more.
Another really necessary vertical, healthtech startups are seeking to improve the way in which healthcare solutions are provided. For example, how to improve the efficiency of doctor’s visits and/or treatments.
Otherwise known as real estate tech, startups in this industry are creating better solutions with the real estate market. For example, some startups in this vertical are improving the home-buying experience while others are looking to change how real estate appraisals are done.
In the queue
In the next article I will share with you some of the startups that you should know within these verticals.