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Citi Ventures Believes These Are The Next Disruptive Technologies

Innovation doesn’t always happen overnight. And it’s exactly the slow-changing technologies that tend to have the greatest long-term impact, according to a recent report (PDF) by Citi Ventures.

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I talked with Vanessa Colella, head of Citi Ventures and chief innovation officer at Citi, about some large-scale societal, economic, and technological trends that have emerged gradually over time but are now at “a tipping point of accelerated adoption.”

Citi Ventures’ latest report identifies ten technologies—many of which have been around for a while—that have the potential to do some serious disrupting. They include solid-state batteries, anti-aging medicines, big data and healthcare, dynamic spectrum access, 5G technology. AV (autonomous vehicle) networks, eSports, floating offshore wind farms and real estate market disruptors.

Vanessa Colella

“People tend to think about change happening in the world as being very immediate and right now, but that’s not actually the case,” Colella told me. “Really it’s often a lot of things when added together over time [that] create change in a profound way.”

When it comes to identifying such technologies, Citi Ventures looks for signs that it views as accelerating and irreversible, according to Colella.

“For example, the first time I took Uber many years ago, I had a young baby, and the fact that I could get out of the vehicle and not have to fish through my briefcase to find my wallet in order to pay was delightful,” she said. “Now we’ve gotten accustomed to the seamlessness and simplicity. The trend of embedded payments is never going to reverse and is only going to accelerate.”

For the purposes of this article, we’ll take a quick dive into two of the categories identified by Citi Ventures: eSports and 5G.

Esports

U.S. venture investment in the fledgling field of organized professional competitive video gaming spiked by a whopping 1,125 percent to $146.49 million across 34 deals in 2017, compared with $11.96 million over six deals in 2013, according to Crunchbase data.

So far in 2018, that trend doesn’t seem to be slowing down. Funding in esports in the first half of 2018 totaled $701 million over 60 deals compared to $48.8 million across 37 deals in the first half of 2015, according to Crunchbase research. That’s a staggering 1,336 percent increase in dollars raised.

Still, Citi Ventures points out that despite strong viewership versus traditional sports, profitability and monetization have been a challenge. Part of the problem is that esports is “still very much in its infancy.” But as viewership increases, esports appears to be gaining more attention from both media and telecom companies.

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5G

5G technology will allow carriers to increase their addressable market through areas such as connected and autonomous vehicles, smart manufacturing, digital health, and smart cities, according to Citi Ventures.

However, when it comes to funding 5G startups, venture investment is down so far in 2018. In the first half of the year, eight 5G-related companies raised $36.2 million compared to six companies bringing in $52.5 million in the first half of 2017.

The initial standardization efforts of 5G technology were completed in June 2018, and preparations have begun to upgrade networks globally, noted Citi Ventures. While some carriers have been discussing the potential for 5G technology for three to five years, there remains a skepticism on its use cases among investors, according to the report.

Still, Citi Ventures sees big potential in 5G.

“We agree that this is likely a small improvement for consumer smartphones, but see a huge potential for commercial and industrial users that have not significantly benefited from wireless technologies to date,” the report noted.

The 5G standards improve on four central attributes of the wireless connection that Citi Ventures believes to be crucial to commercial connectivity: latency delay will drop below ten milliseconds with 5G versus 50 milliseconds or more with 4G LTE, device density, speed and capacity, and dynamic spectrum access.

Regarding device density, with the 5G standard, it is hoped that the network could connect as many as 1 million devices per square kilometer (0.38 square miles). That would be a tenfold improvement over 4G and “is key to the potential for vast sensor networks that report back on conditions ranging from air quality and humidity to whether a parking spot is available or if a streetlight is out,” according to Citi Ventures.

Looking ahead, Colella is confident that technologies that develop slowly over time will continue to likely have a greater impact than those that seemingly happen “overnight.”

“It’s hard for people to estimate the change that will happen when there’s new technologies that come to market,” she said. “Take Microsoft for example. CEO Steve Ballmer once said there was ‘no chance the iPhone is going to get significant market share.’  And ultimately Microsoft missed the smartphone phenomenon. Large-scale societal, economic and technological trends that emerge gradually over time present some of the greatest opportunity, but can be all too easy to overlook.”

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