As investors in their 20s enter the venture industry, they bring a fresh vibe and spot new trends that could become the next billion-dollar tech companies. We are already seeing younger investors carving out new niches.
Alex Chan (26) is an investor at Chai Ventures. Her firm has backed companies such as consumer health platform Unfabled and emotional health specialist Mental Happy. Chan says she is interested in how the ecosystem has redefined women's health over the past few years. Women's health has become a hot sector with more capital flowing in. According to Pitchbook, the global market for “femtech,” a term used to describe women's health companies, raised more than $820 million in 2019 and is expected to reach $3 billion by the end of 2023.
Women's health companies are typically thought of as only concerned with menstrual health, maternal health and menopause management, but Chong and her company are interested in much more.
Until 1993, pharmaceutical companies had no legal obligation to include women in clinical trials in the United States, so the effects of many common drugs and medical devices were never studied in the first place. Aside from this huge research gap, there is another opportunity for medical startups targeting women. Deloitte found that women typically make the most important medical decisions for their families, making at least 80% of household health care spending decisions.
“We hope to see the definition of women's health broadened to include companies that are creating innovative solutions to help manage chronic diseases that are disproportionately prevalent in women,” she said, citing certain thyroid conditions, endometriosis and osteoporosis as examples. “Increased awareness of women's unique healthcare needs, combined with advances in technology, makes women's health an attractive area for investment and development.”
Female Founders Fund investor Leila Alexander (25) says she is interested in the care economy and enterprise environment solutions. She is also very excited about women's health. The fund is strictly generalist because it focuses on women, but she has always thought that women's health was an underserved market. FFF's portfolio includes Maven Clinic, the first unicorn in the women's health sector. According to a Forbes article, women's health companies raised 4.3% of the $26.5 billion invested in health care companies last year. This is a significant increase from the previous year, but Alexander said there is still a lot of work to be done.
“Despite the success of Maven and other companies in this space, women's health care remains underfunded and overlooked, creating a huge market opportunity,” she told TechCrunch.
And then there's AI.
Young investors have mixed feelings about artificial intelligence and are looking for ways to make the revolution more grounded in reality.
Zehra Naqvi, 25, an investor at Headline Ventures and author of the popular newsletter No GPs Allowed, focuses on the consumer sector.
She likes technology like a16z-backed party planning app Partiful that blends the online and in-person worlds, an endeavor she calls “IRL to URL.” She's also interested in “AI social rehab,” looking for tools to make people better people and better global citizens. She says that right now, many of the AI companion apps that pose as friends or partners are reinforcing self-isolation. Because of this, some form of social rehab is needed, especially with so many young people, especially Gen Z and Gen Alpha, spending their crucial formative years online during the pandemic.
“Think AI therapy apps, AI journaling, AI mental health, AI wellbeing apps – all of which encourage and facilitate human connection through guided self-reflection,” said Naqvi, whose firm has investments in Bumble, fintech Acorns and e-commerce platform Erin, among others. “It's like a prosumer tool, but for increased efficiency, development and progress as humans.”
Plus, since young people are going to be spending a lot of time online anyway, they'd benefit from tools to help alleviate America's epidemic of loneliness.
Naqvi also believes that every creator will inevitably become a small business owner, or “solopreneur,” and every “solopreneur” will inevitably become a creator. Naqvi envisions a world where solopreneur tools have evolved enough to sustain large, one-person businesses. AI will play a part in this.
“As Sam Altman said, we're approaching a billion-dollar one-person business,” Naqvi said. “To get there, we need a whole new generation of solopreneur tools and gig economy platforms.”
Besart Kopa, principal at accelerator Antler and publisher of consumer newsletter The Zero State, agrees. “We're on the brink of a Cambrian explosion of consumer apps,” he told TechCrunch. “Artificial intelligence has given visionary founders new possibilities to reimagine how consumers live their lives. AI has also made shipping cheaper, faster, and easier than ever before.”
Bloomberg Beta’s Lori Berenberg, 29, whose companies include legal timekeeper Ajax and construction payroll company Trayd, is excited by a different, perhaps more simple, side of AI. She’s interested in software and user-centric applications that use AI as a tool, such as tone-of-mouth dialing in Figma Slides, which uses AI to adjust sentence structure and language.
AI will unlock capabilities that humans excel at, such as strategy, problem-solving and intuition, she says. But AI is well-positioned to improve software development by handling everything from data management to cloud configuration, freeing developers from the most tedious tasks.
“As the 'wow' factor of AI started to fade and companies began seriously considering adopting new AI tools, many got bogged down in unreliable and inconsistent results from generative AI,” Berenberg told TechCrunch. “It's exciting to see how many founders are starting to use clever product touches and different system architectures to get more deterministic responses, both in their interactions with end users and on the backend with AI.”
As TechCrunch previously reported, AI companies accounted for 41% of all U.S. deals in the first half of 2024. AI and machine learning companies raised $38.6 billion of the $93.4 billion invested in the first half of this year, according to a PitchBook report. AI companies raised $27 billion last year, much of it from large tech companies, the Financial Times reported. The influx of capital into the space has some debating whether an AI bubble is on the way for the industry.
And a review of some trends
But then a trend emerges that younger investors don't think will pan out.
Chong is not too enthusiastic about circular commerce – the process of circulating resources to reduce waste – saying the industry still faces many obstacles, such as consumer acceptance and supply chain bottlenecks.
Copa believes free apps are problematic. “Don't make free apps,” Copa said bluntly. “Consumers are more willing to subscribe than ever before. Put up a paywall and make money. If people don't want to pay, make it something they will pay for.”
Meanwhile, Berenberg believes companies are prematurely focused on optimizing the infrastructure for AI agents, instead of building the AI agents people want. Berenberg says those looking to build for a specific industry should take a step back and think about how that industry actually wants to use AI agents. That's why he helped Ajax automate lawyer billing timekeeping, which should have a direct impact on lawyers' bottom lines.
Alexander said she is interested in AI tools that can help advance research and healthcare delivery, but at the same time, she feels that many of today's AI investments are “extremely capital intensive,” requiring significant infrastructure, talent and data, with no clear real return on investment. This has led to inflated valuations and what she considers “unsustainable financing strategies.”
“I am bullish on the potential of AI across investment verticals, but it's important to stay disciplined and focus on backing founders with sound, scalable business models,” she said.
Their concerns echo those of many others. Naqvi is always wary of technology that becomes a trend, and has seen several, including the resurgence of Web3 and now the AI revolution. “I'm not inherently against any particular trend, but I do feel that AI is naturally at risk of going too far and becoming too trendy quickly.”