5 Seed Investing Trends We’re Watching in 2023

Seed-stage investing is the tip of the spear when it comes to venture capital. Early-stage startups typically have untested business models, products, or services, and limited market traction. However, seed investments also have the potential for high rewards, as company valuations are usually at their lowest and the opportunities for value creation are typically highest.

Even in challenging markets facing strong macroeconomic headwinds, seed investments have the potential to delivery highly attractive returns over time. In fact, adverse markets are often strong venture investing climates. Successful tech companies like Uber and Airbnb launched during economic downturns. Moreover, challenging market environments often limit startup valuations, making company equity cheaper for investors.

We leverage our network of investing professionals and community of more than 600,000 members to source these types of high-potential, early-stage investments. This includes our network of Super Angels, handpicked for their deal-spotting expertise in their regions and/or specialties. Below is a sample of exciting sectors and emerging verticals that we’re following as we source promising opportunities for this year’s Seed Fund.

Generative AI

Still one of the foremost and visible applications of AI is its ability to generate content on-demand, producing what would take teams of humans years in just seconds. This includes everything from condensing and summarizing thousands of books for students to synthesizing entirely new molecules through “building block” chemistry. The impact of AI on the global economy is likely to be profound, with some estimating that nearly 97 million new AI-centered jobs could be created by 2025. In 2023, CB Insights put VC funding at $14.1 billion, a dramatic rise compared to $2.5 billion just a year prior.

CleanTech

Even in challenging market conditions, cleantech remains one of the fastest-growing sectors of VC investment. According to a Reuters report, global VC funding for cleantech startups grew to $12.3 billion in 2022 from $1.9 billion in 2019. Climate change continues to impact the global economy in unprecedented ways, affecting everything from food production to energy supply, infrastructure, safety, and health. Startups continue to be founded by dedicated entrepreneurs to meet the effects of climate change head-on.

eSports

Esports’ global popularity has exploded over the last few years. Esports events are live-streamed to international audiences while startups and entrepreneurs develop new ways to monetize and expand the industry. One of the most compelling aspects of this industry is the unprecedented way that fans can react to or even influence live events through mobile devices, vs. the passive experience of legacy sports. Business Fortune Insights reports that this dynamic industry is expected to grow from $1.72 billion in 2023 to $6.75 billion by 2030.

Future of Work

Many organizations are grappling with how best to manage employees’ return to the office. Companies are aiming to strike the ideal balance between schedule flexibility and meaningful, in-person collaboration. Even businesses such as Zoom, arguably the de facto video collaboration platform, are finding it challenging to thread this needle. To address this issue, a number of startups are providing innovative solutions to maximize remote work productivity and team collaboration The result is an industry that could be on track to be worth $100 billion.

Drones

Earlier this year, self-driving startup Waymor released a report documenting its first 1 million rider-only miles. Its findings? AI may be a safer driver than many humans. The next generation of drones, unmanned vehicles, and robots promise to reshape entire industries taking on tasks anywhere from delivering fast food to searching for survivors in rubble. Human pilots are already flying training missions alongside next-generation drones, similar to how they’d fly with human-operated jets. The enthusiasm for drone-based startups is reflected among venture capitalists. In 2023 alone, over $1.5 billion has been raised for consumer drone delivery services.

We Source High Opportunity Seed Investments for Investors

We will build this year’s Seed Fund by leveraging our broad network of 600,000 supporters and robust due diligence process. Our team of ~50 experienced investment professionals will source and vet a diversified portfolio of ~50-75 promising seed companies. The fund will mostly be invested over ~12-18 months, with a large reserve (~20-25%) for follow-ons.

See below to learn how you can join us. 

*Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and this fund involves substantial risk of loss, including loss of all capital invested. see the performance of each exited investment for all Alumni Ventures funds over the last twelve months and our historical performance since 2014, click here.