• Founding partner Alex Witt shared three venture capital predictions for the next decade.
• Witt says that managers who've launched less than three funds will get more attention.
• He also says that five key technologies and the African market will see more investments.

Since venture capital funds plummeted from 2021 to 2023, VCs are looking for ways to stop the pain and regain a sense of control over their future. Still, many VCs predict the industry will significantly decline in 2025 due to high interest rates.

Alex Witt, general partner at Verda Ventures and cofounder of the payment platform SWFT Blockchain agrees with recent predictions. Based on his 14 years of experience in finance and technology, Witt also gave Business Insider three more core predictions for the VC industry's next decade.

He believes technological opportunity combined with changing demographics will shape the VC experience over the next 10 years, creating more investment space for emerging managers, five key technologies, and Africa.

1. Emerging managers will drive the highest returns in the next decade

As limited partners recognize that successful Fund 1s don't necessarily translate into successful Fund 2s or 3s, the VC landscape will see a greater focus on new managers who've launched less than three funds.

"Emerging managers have been traditionally underfunded despite their success," Witt explained.

For context, Witt explained that larger funds have a track record of underperforming: only 17% of funds larger than $750 million return over 2.5 times of capital. Yet smaller funds have been proven to consistently outperform.

"Funds under $249 million are disproportionately represented in the top decile and quartile of performers," he said. Witt explained that targeting smaller, high-performing funds will be critical for future success.

2. VCs have an unprecedented chance to back five transformative technologies

According to Witt, we're entering a new "industrial renaissance" fueled by breakthroughs in five key technologies he believes have massive VC potential.

• Generative AI: Witt predicts that key players in this arena will be companies with unique datasets, such as Google with YouTube data and xAI with X and Tesla data. Generative AI will even affect the finance and pharmaceutical industries.

  "Some impacts of generative AI to watch for include drug discovery with even faster trials and finance with real-time, data-driven trading.

• Robotics: Witt pointed to innovations like generative AI-driven physical AI — for example, Nvidia — and referenced Tesla. "Market leader Tesla is positioned to dominate this area with its 'robots on wheels' approach to manufacturing."
• Autonomous electric vehicles: Witt said Chinese carmaker BYD stands out as a global leader in data access and scalable manufacturing. "In terms of cost impact, more than 70% of Uber ride costs are labor-related, and autonomous transport will significantly reduce expenses," he said.
• Blockchain: Accessibility is an area to watch in blockchain. Witt said blockchain enables low-cost, borderless transactions, and more markets are using it. "For example, MiniPay, the #1 app in Kenya, surpassed Facebook and Instagram in downloads."
• Biotech: As an emerging technology, Witt explained that gene-based therapies offer precision treatments for inherited or environmental genetic abnormalities. "As examples, Moderna's mRNA success foreshadows the broader potential of CRISPR and similar technologies," he said.

"This era is reminiscent of the early 20th century's transformative, broad-based innovations like electricity and the internal combustion engine," Witt said. For VCs, Witt believes the coming decade marks a rare chance to back category-defining companies in emerging industries — but he emphasized that success won't come easy.

"VCs will face the challenge of identifying category-defining winners," Witt said. "As history shows, industries tend to consolidate around one or two dominant players, with only a small fraction of companies emerging as leaders — think Amazon and Google among the dot-com era's 500 IPOs."

3. Africa and the Global South will lead in VC-backed innovation

Beyond technology, Witt stressed that demographics are a critical and often overlooked factor shaping VC trends. He projects that population dynamics will increasingly determine the locations where innovation thrives.

"Demographics are destiny," Witt said.

He predicts that VCs will increasingly allocate capital to the Global South, particularly Africa, due to its "explosive" consumer and market growth potential.

"This shift will redefine traditional portfolio strategies, emphasizing demographic-driven investments," Witt said.

As support for his prediction, Witt noted that Africa leads global population growth, and that all of the top 20 fastest-growing populations are in the Global South.

He added that countries with aging populations and declining birth rates, such as Korea, with a fertility rate of 0.68, face a shrinking workforce and reduced appetite for risk and technological adoption.

In contrast, he believes that regions like Africa, with a fertility rate of 4.18, offer a young, growing population and expanding market potential.

"This is why some VCs are betting on the Global South as the next frontier for innovation and growth," Witt concluded. "Large populations equal large markets, and big markets mean that one or two successful companies can offset eight or nine failures, which is critical for VC success."

If you're a VC who would like to share your thoughts on the industry, please email Manseen Logan at [email protected].

• A top M&A banker said Big Pharma will be on the hunt for more acquisitions in 2025.
• Major drugs including Keytruda and Eliquis will see patent exclusivity expire in coming years.
• Pharma companies look at areas such as obesity to supplement growth, Jefferies' Chris Roop said.

Big Pharma will hunt for more acquisitions in 2025 as industry giants face patent expiration for some of their best-selling drugs, according to a top M&A banker.

Merck's cancer drug Keytruda, the top-selling medication in the world, will lose patent exclusivity at the end of 2028.

Eliquis, made by Pfizer and Bristol-Myers Squibb to treat and prevent blood clots, will lose its exclusivity earlier that same year. The two drugs raked in $25 billion and $12 billion, respectively, for their manufacturers in 2023.

When patents expire, pharma company revenue can take a hit as rivals create similar offerings to take market share. Developing brand new drugs is a long, expensive, and risky process, so acquisitions of other companies with new medications in their pipelines offer a potentially faster way to generate new revenue.

This is partly why Chris Roop, head of M&A for the Americas at Jefferies, is expecting biopharma M&A to pick up in 2025.

"The gaps to fill are significant when you think about replacing drugs that achieve peak sales north of $20 billion or $30 billion drug before patent exclusivity expires," Roop told Business Insider in a recent interview.

Large, successful pharmaceutical companies can become victims of their own successes when patents run out on blockbuster treatments, he added.

AbbVie's popular arthritis drug Humira saw its patent exclusivity expire in 2023. In the third quarter of 2024, with patients increasingly turning to similar drugs or other prescriptions, AbbVie saw its revenue from global sales of Humira fall 37% from the previous year's quarter.

To make up for looming revenue gaps, Roop said Big Pharma will increasingly turn to M&A next year, buying smaller biotechs developing drugs in major markets such as obesity and oncology.

2025's top drug targets

Obesity is positioned to be biopharma's hottest market in 2025, Roop predicted.

2024's biggest pharma acquisition was in obesity. Novo Nordisk's controlling shareholder Novo Holdings closed a deal in December to buy development and manufacturing company Catalent for $16.5 billion. The deal gives Novo Nordisk more manufacturing power for its obesity drugs Ozempic and Wegovy.

Novo Nordisk and Eli Lilly, which makes Mounjaro and Zepbound, have a significant headstart in the exploding field of GLP-1 weight-loss treatments. Originally created to treat diabetes, injectable GLP-1 medications have surged in popularity. In May, the Kaiser Family Foundation reported that one in eight US adults had tried a GLP-1 drug.

Many other pharma companies want a piece of that pie, Roop said.

"Obesity is going to be a $100 billion to $150 billion market, so even if you come up with a third or fourth entrant in that market and only achieve 2% to 4% share, you still have a multibillion-dollar drug on your hands," he explained.

Beyond obesity, Roop sees immunology and inflammation drugs as big targets for biopharma M&A next year. That market saw a few large deals in 2024, including Vertex Pharmaceuticals' $4.9 billion purchase of Alpine Immune Sciences, which has a drug in development that targets Berger's disease, an autoimmune kidney condition.

Roop expects oncology to remain a focus area for Big Pharma next year.

He said pharmaceutical companies are especially interested in precision oncology M&A, including drugs targeting more specific cancers and even new methods of personalizing cancer treatment.

AstraZeneca made a precision oncology acquisition in March with its $2.4 billion purchase of Fusion Pharmaceuticals, which is developing a radiopharmaceutical drug, which uses radioactive isotopes to treat midstage prostate cancer.

Finally, Roop said Big Pharma will continue looking to buy companies with cardiovascular drugs in their pipelines. Heart disease and related conditions remain the leading cause of death. The global market for cardiovascular drugs was valued at about $150 billion in 2024, according to Precedence Research.

Novo Nordisk bought Cardior Pharmaceuticals in March in a deal worth up to $1.1 billion to strengthen its cardiovascular drug pipeline.

Roop said both private and public biopharma companies could be acquisition targets next year.

"A lot of what we're doing is trying to find that equilibrium to fund these companies to a point in time where pharma will say — on that data with that amount of patients and with a drug profile like this — I'm willing to take the risk, buy it from that point, and take it forward into late-stage development," he said.

"There are a lot of private and public companies that are in that lane today. We probably have more privates today with advanced data than we did three or four years ago," he added.

Roop said many of these private biopharma companies with advanced data are also well-positioned to potentially go public as the IPO window reopens.

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