After two relatively quiet years, we are seeing signs of a pickup in the venture investing space. At Republic, we’re positioning ourselves to take full advantage. Here are five categories we will be watching closely in 2024.
We anticipate activity in the Digital Asset sector will increase dramatically in the coming year. The price of Bitcoin jumped more than 150% in 2023 and looks poised to go higher. Internally, Republic Note launched for trading last month on INX. This tokenized version allows anyone, not just accredited investors, access to Republic’s venture portfolio.
That’s just one sign of the momentum building in the tokenization of real world assets. More proof that it’s clearly gaining speed? The U.S. Office of the Comptroller of the Currency will be holding a tokenization symposium on February 8.
The Space industry continues to expand rapidly with McKinsey and the World Economic Forum suggesting it could reach $1 trillion in annual value by 2030. While the major rocket launches garner most of the media attention, expanding commercial activity is an even better sign of the industry’s strength. SpaceX plans to conduct 144 flights for Starlink alone in 2024. Firefly Aerospace will deploy their Blue Ghost lunar lander to the near side of the moon on behalf of NASA this year. Both are Republic Capital portfolio companies.
In the Media and Entertainment space, the settlement of the writers and actors strikes plus a slowdown in the streaming wars point to one clear pattern. We’re going to see a shift from quantity to quality in the volume of content. That emphasis bodes well for companies like Skybound, the firm behind Walking Dead and Invincible. Their business model is specifically designed to allow for fast expansion of brands across various channels. Skybound raised more than $16M last year on Republic at a $500M valuation. With annual revenue over $100M, that 5-1 revenue multiple looks very attractive.
Artificial intelligence continues to draw significant media coverage. The mainstream coverage, though, often misses a key fact. The way AI is being applied as a platform for innovation across numerous industries is quickly changing.
In fact, the most recent product release by Open AI signals a significant shift. Their emphasis on APIs that developers can use to build customized GPTs opens the doors to a wide variety of applications. This step should unlock value for startups much the same way that Apple’s development of the App Store unleashed innovation in the mobile access world. The advent of the App Store ultimately led to the emergence of companies like AirBnB, Slack, and WhatsApp.
While media talk around the Energy Transition often quickly becomes political, there’s plenty of actual progress being made on the ground. We’re excited about significant developments unfolding outside of the “traditional” lithium-based norm. Hydrogen powered vehicles are seeing progress with companies like the UK’s Viritech developing non-battery powertrain technology for automotive and marine applications. Sweden’s Northvolt is moving towards production after breakthroughs in sodium-ion technology, pioneering a battery that isn’t dependent on scarce, China-dominated rare earth metals like lithium, cobalt, graphite, and nickel.
Our team here at Republic will be searching for innovative young companies in all these categories and more in the coming year.
Our global head of markets, Ian Epstein, will be hosting a special discussion on the categories to watch in 2024. Access is available to members of a special new initiative that brings you closer than ever to our top deal makers. Stay tuned tomorrow to find out how you can join.