Where VCs are looking for voice startup investments
Led by Amazon’s Alexa, smart speakers’ install base is expected to reach 200 million units worldwide by 2020. A quarter of Americans over the age of 12 own a smart speaker, and the majority of those users have more than one device in their home. Moreover, Apple could sell 50 million of its Airpods this year (generating $8 billion in sales) as Bluetooth earpieces explode in popularity.
For the market penetration of this hardware, the app ecosystem remains limited in terms of mainstream adoption. Podcast production and consumption has exploded, but they don’t take advantage of smart speakers and headphones as interactive devices. Even though there were 57,000 Alexa skills available at the end of last year, most people are using smart speakers mainly to check the weather, check the news, ask simple questions and play music.
If voice is a new operating system, where are the opportunities to build giant companies on top of it?
To get a better sense of how the smart money views this market, I asked five VCs who have spent the most time in this space to share which types of startups have captured their attention:
- Matt Hartman, Partner at Betaworks Ventures
- Nicole Quinn, Partner at Lightspeed Venture Partners
- Paul Bernard, Director of the Alexa Fund at Amazon
- Ann Miura-Ko, Partner at Floodgate
- Jordan Cooper, Partner at Pace Capital
Here are their responses:
Matt Hartman, Partner at Betaworks Ventures
The most recent wave of audio was about constant connectivity and streaming, and we invested in Anchor, Gimlet, and other audio-first businesses that would thrive in the podcast renaissance.