With Q3 2024 formally behind us, plenty of sector particular experiences have been printed which can be value overlaying. This isn’t solely useful for startups and buyers who’re actively deploying in these sectors, but additionally to founders at the start of their journeys who’re in search of ‘requests for startups’ or downside areas value diving into. I selected to deal with 5 areas which can be significantly related to us at Remagine Ventures.
LUMA Companions launched their Q3 2024 Market Report for the Digital Media & Advertising and marketing sector. As beforehand talked about on VC Cafe, the media and leisure house is experiencing a variety of disruption: the transfer from cable to streaming (and from streaming to Youtube), shorter consideration spans driving customers to brief type vertical video (TikTok, Instagram Reels and Shorts) and massive modifications to how content material is created (and the price of creating content material) because of generative AI.
Highlights from the report:
- M&A exercise is up for the third consecutive quarter and 51% yr over yr – this consists of a number of Israeli startups like Salesforce acquisition of Zoomin for $450M , and Playtika’s acquisition of Superplay for $700M in money and as much as $1.9 billion in earn out based mostly on efficiency.
- There’s an growing convergence of content material technology, knowledge & id, and advertising and marketing automation, pushed by AI. It will affect the world of media and leisure in a profound manner, throughout three areas:
- Content material Technology: Generative AI is able to creating various types of content material, together with textual content, photographs, music, and video. This functionality may revolutionise content material manufacturing and distribution for media and leisure corporations. For instance, our portfolio firm HourOne can generate top quality movies of individuals talking in a chat present, fully generated with AI.
- Knowledge & Id: AI excels at analysing person knowledge to ship personalised content material suggestions, focused promoting, and tailor-made person experiences. This might remodel how media and leisure platforms have interaction their audiences and generate income.
- Advertising and marketing Automation: AI-powered instruments can automate advertising and marketing duties like content material creation, social media administration, and advert marketing campaign optimisation. This automation may considerably affect how media and leisure corporations promote their content material and attain their goal audiences. For instance, our portfolio firm Munch robotically creates brief type, vertical clips for social media from any lengthy type video and understands what’s trending.
Gaming by Konvoy
The newest report by Konvoy, a gaming enterprise capital agency, analyses the state of the gaming trade within the third quarter of 2024. There’s been little development within the gaming trade yr over yr – it’s projected to achieve a market measurement of $188 billion by the tip of 2024 (a modest 3% development) and is anticipated to develop to $223 billion by 2029.
Three key traits value being attentive to in gaming in Q3 2024:
- Funding – The full quantity of personal funding for the primary three quarters of 2024 is increased than the whole 2023 complete, largely resulting from Disney’s $1.5 billion funding in Epic Video games. Personal funding within the gaming sector reached $811 million in Q3 2024, marking a 15% enhance from the earlier quarter. Conventional content material studios are dealing with compression in VC funding, as content material alone doesn’t appear to be a powerful match for enterprise capital at this stage. 41 gaming M&A transactions occurred in Q3 2024.
- The affect of AI on gaming – AI-related corporations attracted 22% of the whole funding in Q3, equating to $113 million, up from 10% and $52 million in Q2. Two notable AI investments had been Volley’s $55 million fundraise and Sequence Leisure’s $28 million Sequence A spherical. There’s vital investor curiosity in AI-powered gaming startups, significantly these targeted on digital characters and instruments that streamline recreation growth processes.
- Distribution is altering in plenty of methods:
- Discord’s launch of “Actions” in September gives builders one other avenue for distribution and person engagement.
- Epic sued Apple, Google and Samsung for the anti aggressive behaviour and received. That implies that 1) Epic now has its personal app retailer, attracting builders by charging 12% in comparison with Apple’s 30%. The ruling may doubtlessly permit builders to retain extra income by bypassing Google’s charges and laws.
Generative AI within the Enterprise by Deloitte
The Q3 2024 report of Generative AI within the Enterprise by Deloitte surveyed 2,770 senior leaders from organisations with energetic AI implementations. The large image: enterprises are recognising the worth of generative AI and are investing extra closely in growth and deployment. Nevertheless, a number of key challenges hinder wider adoption, together with issues round knowledge administration, threat mitigation, governance, and worth measurement.
Key highlights from the report:
- Enterprise is keen on GenAI however leaning in with warning: 67% of surveyed organisations are growing their generative AI investments resulting from noticed worth. Nevertheless, 68% of organisations have moved solely 30% or fewer of their generative AI experiments into manufacturing.
- The important thing advantages enterprises discover in generative AI are improved effectivity, productiveness, and price discount. However organisations are realising a broader vary of advantages, together with elevated innovation, improved services, and enhanced buyer relationships
- Threat, Regulation, and Governance as Prime Boundaries: Issues round threat administration, regulatory compliance, and governance are vital obstacles to generative AI growth and deployment. Organizations really feel much less ready to handle these challenges, with solely 23% ranking themselves as extremely ready for threat and governance features.
Crypto by Andreessen Horowitz
The a16z State of Crypto Report 2024 highlights a number of key traits and developments within the cryptocurrency sector:
- File exercise – though we don’t hear about it as a lot in mainstream information, Crypto utilization and exercise have reached all-time highs, indicating rising mainstream adoption and elevated utility of blockchain applied sciences. The report estimates there are 30 to 60 million month-to-month energetic crypto customers worldwide, representing 5-10% of worldwide crypto house owners.
- Stablecoins and Defi are the preferred makes use of for crypto in the present day. Living proof, Stablecoin transaction volumes surpassed Visa’s in Q2 2024, underscoring their utility and rising adoption. DeFi protocols presently maintain over $169 billion, with staking and lending being common subcategories.
- Improved blockchain infrastructure – Ethereum’s “Dencun” improve has led to a considerable lower in transaction charges for L2 networks and decrease transaction prices and elevated capability have spurred the expansion of shopper apps like low-cost NFT collections, onchain video games, social networks, and prediction markets.
Spatial Computing by Enders Evaluation and Priority Analysis
Based on the 2024 spatial computing market replace by Enders Evaluation, the spatial computing ecosystem is experiencing an upturn resulting from elevated availability of head-mounted gadgets (HMDs) primarily by Apple and Meta, albeit with very completely different methods.
Key highlights within the spatial computing house:
- Market Dimension and Progress: The spatial computing market is anticipated to develop considerably, with projections suggesting it may attain USD 280.5 billion by 2028, rising at a Compound Annual Progress Fee (CAGR) of 23.4% from 2023. This means strong development fuelled by technological developments and growing adoption throughout varied industries.
- Market leaders: Apple is rumoured to launch the Apple Imaginative and prescient Professional 2 in 2026, costing 30% lower than its predecessor. Apple has chosen a design for the Imaginative and prescient Professional that lacks controllers, making it primarily reliant on passive leisure. In distinction, Meta is deeply engaged in gaming and 3D experiences, showcasing the potential for the HMD class. Meta has essentially the most inexpensive and common VR headset, the Meta Quest (together with the brand new 3S mannequin) and is engaged on mission Orion, revolutionary new AR glasses.
- New Entrants: Extra corporations coming into the house: media and leisure corporations are studying in on AR/VR/XR content material and experiences, though gaming anticipated to stay the dominant use case till the tip of the last decade. A possible killer app for VR and good glasses may flip to be stay sports activities.
You get the image: there’s a ton of innovation taking place throughout media, gaming, AI, crypto, and spatial computing. The convergence of those sectors, significantly via AI integration, creates unprecedented alternatives for formidable founders.
At Remagine Ventures, we’re significantly enthusiastic about backing early-stage founders constructing at these intersections. When you’re engaged on one thing revolutionary in these areas on the pre-seed stage, we’d love to listen to from you and discover how we are able to help your journey.
I am a former common accomplice at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first bodily hub for startups.
I am additionally the founding father of Techbikers, a non-profit bringing collectively the startup ecosystem on biking challenges in help of Room to Learn. Since inception in 2012 we have constructed 11 faculties and 50 libraries within the creating world.
