From Rockets To Lab-Grown Meat, These Deals Show Some Of The Hottest New Startup Sectors Of 2021

This year has set a record for startup funding, with already-hot sectors like fintech, health tech and cybersecurity only getting hotter. But we’ve also seen startups in more nascent industries including nuclear fusion, alternative proteins and financing tools for the creator economy pull in big bucks.

While these aren’t the biggest deals of this year, we think they nonetheless indicate that 2022 may be the year we see some of these technologies and industries take off. Here’s a closer look.

Space tech rockets ahead

A $1.4 billion round closed by Broomfield, Colorado-based space tourism company Sierra Space combined two things 2021 will be remembered for—investors’ insatiable appetite for space and a huge so-called “Series A.” A quick glance at Crunchbase data shows there were 10 Series A rounds of a half-billion dollars or more this year—five were raised by U.S.-based startups. Last year saw a total of four. Certainly not a bad fundraise for a company right out of the box.

And what more needs to be said about space tech? The industry saw more than $9 billion of venture capital invested this year alone—a more than 50 percent increase from 2020. With headline after headline about billionaires going to space—or at least closer to it—nothing defines 2021 more than a company founded this year exciting investors about its plans to develop an orbital commercial spaceplane. The round—led by General Atlantic, Coatue and Moore Strategic Ventures—also marked the largest in the space sector this year and one of four rounds larger than half-a-billion dollars.

If nothing else, space is a well-funded frontier.

— Chris Metinko

Helping creators cash in

Creators have existed online for years, but payment solutions and tools for them to monetize content have only been getting investor attention relatively recently. The COVID-19 pandemic fostered a boom for online content creators and their businesses, as media consumers spent more time on the internet.

The next stage in that evolution is more financial tools for creators. Here are a couple of the deals that show how payment tools for the creator economy could be a big trend in 2022:

Patreon raised a $155 million Series F in April 2021. The platform helps creators monetize their following; musicians, artists, and other creators use Patreon to earn money from subscribers. The company was valued at $4 billion following the Series F, which was led by Tiger Global Management. With seemingly more people “going independent” on platforms like Substack, which also raised money this year, tools like Patreon that help turn loyal followers into paying subscribers are likely to continue to grow.

Meanwhile, Karat Financial launched last year with its Black Card for creators and influencers. The company uses metrics like social media engagement to determine credit limits for creators. The idea is that creators are actually small businesses—they get sponsorship deals and make money online, after all—but traditional financial institutions often don’t understand them.

An old-school bank may not fully grasp the power and earning potential of a creator with millions of online followers, but Karat gets it and will give the creator a credit card with a more appropriate credit limit.

Karat raised a $26 million Series A earlier this year to expand its team and continue to build financial infrastructure. With its credit card already on the market, look for it to branch out with more financial products for creators.

— Sophia Kunthara

Betting on chips

A global computer chip shortage this year helped drive inflation levels not seen in decades, and generally roiled global supply chains as industries from automobiles to robotics to home appliances struggled to manufacture goods without these crucial components.

Perhaps unsurprisingly, venture investors poured record dollars into companies related to the semiconductor industry in 2020.

As of August, global venture investment into semiconductor-related sectors—which include everything from chip design firms to actual semiconductor manufacturers—already reached $3.7 billion, topping last year’s record of $3.4 billion, Crunchbase figures show.

Notable deals include hardware and integrated systems developer SambaNova Systems’ $676 million Series D, raised in April at a $5 billion-plus valuation. Large chip companies are also buying up startups in the space, as we saw with Qualcomm’s acquisition of former Apple employees’ chip startup Nuvia for $1.4 billion in January.

U.S. legislation that would spend $52 billion in taxpayer money to subsidize chip production passed the Senate earlier this year and could further attract investor interest in the space, but is currently in limbo, pending House approval.

Either way, with the chip shortage expected to last well into next year, expect to see investor interest in the sector continue.

— Marlize van Romburgh

Investors warm to nuclear fusion

For decades, cleantech talk centered on solar and wind technologies. Eventually, it evolved into electric cars and batteries. However, this year seemed to give rise to a third phase—this one focused on the long-held promise of fusion.

The promise of carbon-free energy got investors excited, as several companies took in huge rounds. However, Cambridge, Massachusetts-based Commonwealth Fusion Systems topped them all. The company closed a Series B of more than $1.8 billion led by Tiger Global Management. The round marked the largest one for any nuclear fusion startup ever and will be used to help build the world’s first “commercially relevant” net energy fusion machine and the first commercial fusion power plant.

The enthusiasm in fusion seems to be born from the realization that solar, wind and other renewable energies alone will not be enough to battle climate change. In addition, although fusion has been talked about for about a century, many see it as finally close—perhaps by the end of this decade.

Investors get excited about markets of tens of billions of dollars, so it’s no shock they are flooding the fusion sector with capital looking to disrupt an energy market worth trillions. If that occurs, 2021 may be looked back on as the year it all started.

— Chris Metinko

Cultured meat gets a boost

Next year is set to be a big one for the world of cell-cultured meat and other animal alternatives. One recent proof-point: Future Meat’s $347 million Series B announced this week, marking the largest investment ever made in the cultivated-meat industry.

The startups around the world working on cell-cultured meat are generally pretty bullish that they’ll get a key approval to start selling their burgers, chicken tenders and even sushi in the U.S. soon—likely in the coming year, some say.

Those meats are grown in stainless steel bioreactors, but are biologically indistinguishable from the meat that comes from animals. The benefits of cell-cultured meat, founders say, are plenty, from easing climate change associated with meat production to getting rid of the hormones, antibiotics and heavy metals that hide in some farmed meat or fish.

A few cultured-meat products have already hit the market in Singapore, but others are working their way through regulatory processes in Europe and America, inching closer to unveiling products in restaurants and eventually grocery stores, if the companies can scale up enough to bring the consumer costs down.

While some remain skeptical that cell-cultivated meats will ever be able to lower prices enough to be competitive with farmed meat, the industry is already making strides. Future Meat, for instance, is touting that it has gotten its production costs down to about $7.70 per pound, or about $1.70 per chicken breast. That’s a significant dip from the $18 it cost them to make a pound of meat six months ago.

Future Meat’s recent round was co-led by ADM Ventures with participation from Menora Mivtachim pension and insurance fund, and S2G Ventures. Other investors include Tyson Ventures, Rich Products Ventures, Manta Ray Ventures, Emerald Technology Ventures, ADM Capital, Bits x Bites and the Sander Group, rounding out a large and influential group of investors that have demonstrated huge interest in the sector.

In 2020, investors poured more than $1.2 billion into startups around the world working on cell-cultured meat and other cell-cultured meat alternatives. As of Oct. 31, 2021, venture investors had bet another $913 million on the industry this year, Crunchbase data shows.

— Janice Bitters Turi

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Illustration: Dom Guzman