Across the private capital markets, investors, entrepreneurs and other industry professionals have created useful sorting and categorization methods to group companies by their shared characteristics.
When we talk about companies at a broad, general level, for example, we may refer to them in the context of their industry—business-to-business (B2B), business-to-consumer (B2C), energy and healthcare, for example. Industry verticals have staying power and are considered established, but their focus is even narrower, like fintech, femtech and mobility tech. Narrower still, emerging spaces like clean meat and space tourism are niche and promising, but not yet time-tested, per PitchBook’s definition.
Another relevant term for categorizing companies across the venture capital landscape is emerging technologies.
What are emerging technologies?Emerging technologies represent growing areas of technological innovation that attract capital for their disruptive, thematic or secular growth potential. Across emerging technologies, shared characteristics include:
- Significant levels of venture capital investment
- The potential to leverage technologies to disrupt existing industries, companies or socioeconomic behaviors
- High growth potential owing to strong secular growth tailwinds
PitchBook’s methodology for defining emerging technologiesPitchBook’s Institutional Research Group—a provider of research services that brings insights, trends and forecasts to the private capital markets—selects emerging technologies for coverage in our platform based on several factors. The most important is the amount of venture capital being invested into a specific category or group of startups focused on a similar growth opportunity.
The team combines its quantitative approach with a qualitative analysis of current industry growth themes and opportunities, as well as investor sentiment to determine whether a certain group of startups can or should be viewed as a separate emerging technology vertical.
There can be overlap between the verticals PitchBook covers, and the investment community often has different views on how companies should be segmented and grouped.
PitchBook’s emerging technology coverage areasThrough its comprehensive Emerging Technology Research reports, PitchBook provides robust, original coverage of 12 disruptive emerging technologies—available to our customers through the platform. Those coverage areas include:
- Artificial intelligence and machine learning
- Cloudtech and DevOps
- Enterprise health and wellness tech
- Information security
- Internet of things
- Mobility tech
- Retail health and wellness tech
- Supply chain tech
Emerging technologies vs. emerging spaces—what’s the difference?Although emerging technologies and emerging spaces sound similar, they are not interchangeable.
Emerging technologies is a term used widely across the industry, from analysts and institutional researchers at PitchBook to private market professionals spanning the globe. They are used to provide research coverage of a broad industry that may include several types of products and technologies offered by many startups that share similar characteristics in terms of growth opportunities. Our experts track emerging technologies and produce impactful quarterly reporting on coverage areas defined by our methodology, but emerging technologies as a concept are not specific to PitchBook.
Emerging spaces, on the other hand, are a unique concept and term that originated at PitchBook. Emerging spaces consist of very specific products or technologies that may only represent a small segment or opportunity within a larger vertical. With our Emerging Spaces platform feature, PitchBook clients can sift and sort through a growing list of hundreds of individual emerging spaces to identify promising investment trends in nascent spaces.
More about emerging technologiesExplore how emerging technologies are being leveraged amid COVID-19
Listen to Season 2 of PitchBook’s In Visible Capital podcast
What trends will shape the emerging tech VC ecosystem in 2021?
Watch our recent webinar on artificial intelligence and machine learning, mobility tech and agtech
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