The 25 VC firms most active in funding e-commerce startups told us what they’re looking for in an investment — and shared the biggest bets they’re making for the future

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2020 was a gamechanger for e-commerce.

As the COVID-19 pandemic has wreaked havoc on brick-and-mortar retail, more consumers have moved their shopping online, leading to opportunities for companies that either sell goods online or create products that make it easier for other businesses to do so. 

In a sense, the pandemic has accelerated the rise of e-commerce by several years’ time, with eMarketer analysts estimating that US online sales reached $794.5 billion in 2020, a year-over-year increase of 32.4%.

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While 2020 was a relatively slow year for venture capital investments in consumer retail, and many companies initially delayed their fundraising due to the pandemic and the uncertainty around the election, investors are optimistic about the opportunities that are arising as consumer habits change. 

Business Insider reached out to the top VC firms investing in e-commerce to get their take on where the sector is headed. We emailed the top 25 firms that have made the most deals in e-commerce, based on data from PitchBook. Of the 25 we reached out to, 20 responded with their thoughts. 

The investors told us where they’ve placed bets this year, what they look for in an investment, and what they’re excited to invest in next year:

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Forerunner Ventures partner Nicole Johnson says the e-commerce “landscape has been turbo-charged in 2020.”

Location: San Francisco

Total e-commerce deals in last five years: 66

When it came to e-commerce this year, Forerunner Ventures focused its investment efforts on companies that are “reimagining the future of retail” and demonstrate a “disregard for the status quo,” Johnson said. 

The firm led a Series A funding round for Dumpling, a platform that enables individuals to launch their own personal grocery shopping businesses. It also upped its investment in Sunday, a startup that delivers customized lawn and garden products, as well as in Faire, the online wholesale marketplace.

Looking forward to 2021, Johnson said Forerunner is looking to fund companies that fit consumers’ evolving needs. 

“We’re holding people in the driver’s seat of our investment strategy: where are their needs evolving to with respect to things like food, globalization, sustainability, family, health; and what are the tech-driven platforms to deliver on these needs while facilitating the most loyal relationships?” she said.

500 Startups partner Clayton Bryan says his firm is looking for “big markets” and “big growth rates.”

Location: San Francisco

Total e-commerce deals in last five years: 55

In 2020, 500 Startups made more than a dozen investments in e-commerce companies like Invidica, a platform that helps businesses find trustworthy suppliers and get products to market, and EcoCart, an extension that enables online shoppers to offset the carbon footprint of their purchases, Bryan said. It also invested in an influencer-driven skincare marketplace …read more

Source:: Businessinsider – Tech

      

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