Predictions from top investors on climate, politics, and health for 2024

In a longstanding tradition for this newsletter, we ask readers to weigh in on what the new year will bring for the private markets. This year, we’re dedicating the whole first week of January to the Crystal Ball, and today’s edition features a collection of predictions readers made on climate, politics, consumer, health, and emerging markets.

Will Tesla maintain its leadership position in the EV market? What will happen to clean meat companies?

Here’s what you had to say.

Note: Many answers have been shortened for clarity and/or brevity. The deals section will be back next week!

Photo illustration by Victoria Ellis; Original photos by Getty Images

Climate + energy

There will be a semi-serious national debate over renaming the heat pump to increase consumer adoption. —Lauren Salz, cofounder and CEO, Sealed

The Inflation Reduction Act (IRA) earmarked large amounts of subsidies and incentives to encourage clean energy investment. As the federal government continues to finalize IRA rulemaking and implementing regulations, investors will have more certainty as to how the IRA will benefit their investments. This clarity should provide a boost to private equity investing. —John Grand, partner, Vinson & Elkins

VC Climate tech sector valuations will get hit big time, after realizing that IRA will not support unprofitable and capital intensive businesses forever. —Michael Hammer, CFO, BMW i Ventures

Demand for electricity in the U.S. will grow at the fastest rate in decades—driven by electrification, the proliferation of data centers and a manufacturing renaissance. The grid will look to the most flexible and efficient sources of electricity to maintain stability. With coal plants retiring and renewables coming online only gradually, it will be gas generation and energy storage facilities that keep the lights on in the U.S. —Paul Segal, CEO, LS Power

2024 will be an extinction event for 99% of cell cultured meat companies (so called “clean meats”) as they fail to raise additional capital in light of insurmountable technical and economic challenges. —Shahram Seyedin-Noor, founder and general partner, Civilization Ventures

We foresee a growing range of AI applications in energy, which will in turn increase computation and power demands, adding a tremendous load to electric infrastructure. —Hans Kobler, founder, Energy Impact Partners

We predict 2024 will turn dirt into gold. Often overlooked, but simply cleaning industrial and commercial HVAC systems can have a tremendous energy efficiency and carbon emissions reduction impact. ROIs can be simpler and easier than even sophisticated building automation solutions. —Brian Walsh, head, WIND Ventures

We will see more vehicles include the Vehicle to Home(V2H) feature that will allow owners to power their home from their vehicle during an outage. This is already a standard feature in the Ford F150 Lightning and Tesla Cybertruck. —Chad Conway, investor

Politics + reg.

Big, capital-hungry technology bets (think fusion energy and space tech) coming off the tails of massive fundraises in 2020-22 will look to government sources more than ever to fill the void in cooled-off private funding markets. This will give government agencies more control than ever to pick winners and steer toward their strategic priorities. —Jillian Noel, investor, Piva Capital

The Biden administration will not ban TikTok out of concern it will hurt votes as younger voters skew more liberal. (It will remain banned in federal offices.) —Tim Dick, managing partner, Startup VC

With the rise of deglobalization and geopolitical tensions, the technologies supporting governments to become less dependent on other countries to manufacture and deploy products will stand out in 2024. —Lior Susan, founding partner, Eclipse

The financial regulators will continue to suffer the fallout from the FDIC’s sexual harassment scandal. Republican legislators will cite the scandal in efforts to undermine the regulators’ regulatory initiatives, and Democratic legislators will be reluctant to get involved. Regulators may face an onslaught of lawsuits in 2024. There will be unprecedented litigation as banks and nonbanks challenge what they see as overreaching and arbitrary regulations. —Michele Alt, cofounder and managing director, Klaros Group

Diversity + activism

While we are prepared to see a slowdown of DEI progress within private markets due to broader issues around litigation and affirmative action, by no means do we expect it to stop progress altogether. Leaders will continue to figure out how to get it right within their own firms and organizations, as it becomes increasingly evident that diversity, or lack thereof, will ultimately affect the bottom line. —Josette Thompson, managing director and head of DEI strategy, Prosek Partners 

As Gen Z continues to dominate the startup landscape, a new outlook on entrepreneurship and team-building will disrupt traditional early-stage VC strategies. Activism, identity, and an ethics-first mindset are table stakes for building lasting relationships with entrepreneurial college grads. In an effort to adapt, VCs will be diligent about demonstrating their alignment with these values – from building increasingly diverse investor benches to even placing their own core values under a microscope. —Niko Bonatsos, managing director, General Catalyst

Health

As patients and regulators source pathology on why certain chronic conditions disproportionately impact women, we’ll see a shift back to basic science. —Lexi Henkel, principal, Maverick Ventures

Next year we will see an uptick in investments in companies producing at-home testing of women’s hormonal profiles. —Courtney Leimkuhler, cofounder and partner, Springbank

We estimate that 8 million to 15 million Americans are currently on GLP-1 medications, and we believe this could double by the end of 2024. —Andrew Goletka, managing partner, Coefficient Capital

Science-backed health and wellness products will help revive the consumer vertical. Health-conscious consumers are seeking voices of authority and efficacious products supported by scientific evidence. This will create new opportunities for doctors-turned-founders whose deep expertise and knowledge-sharing have earned them devoted audiences in the creator economy. —Lisa Wu, partner, Norwest

In the new year, we will see MRD (molecular residual disease) testing accelerate and break into mainstream medical practice. —Chris Hall, president and CEO, Personalis

2024 will be the year that the ‘value-based-care’ moniker loses its kryptonic luster. By year end, ‘value-based care’ will not be a dirty word, but unlike in recent years, it will elicit skepticism and further questions. Digital health darlings of the past five years, once showered with venture capital and embraced by payers with open arms, will face a reckoning in the next 12 months. Launched on promises of delivering higher quality care at lower cost and more importantly, reducing unnecessary downstream treatment/spend, many have failed to deliver. Challenges in naïve program design, execution, and the complexities of transitioning from fee-for-service healthcare models contribute to disillusionment. —Liam Donohue, cofounder and managing partner, .406 Ventures 

Consumer

Consumer discretionary spend has been powering two-thirds of the economy, yet the consumer sector gets far too little respect from the investment world. That changes in 2024 as the category will stimulate M&A from strategics and PE. And the Nets will go further in the playoffs than the Knicks. —Michael Duda, managing partner, Bullish

2024 will be a bloodbath for DTC businesses – we are going to witness the quiet death of the DTC sector. The funding environment for younger, privately-held DTC brands is going to dry up completely. Consumer-focused startups will be forced to bootstrap, seek alternative financing, explore other strategic partnerships, or quietly file for bankruptcy. —Taryn Jones Laeben, founder and president, IRL Ventures

One of the biggest shifts we will see in 2024 is how and where we shop. While TikTok and Temu’s push into consumers’ wallets was impossible to ignore in 2023, we’re seeing increasing consumer fatigue and skepticism surrounding products being incessantly pushed in their direction. —Meera Clark, principal, Redpoint

The last three years have left consumers exhausted and overwhelmed by the proliferation of brands, SKUs, and marketing claims trying to catch their eye. In 2024, brands will win with a return to simplicity, clarity of purpose, and a laser-focus on the quality of their products. —Lindsay Haut, principal, Verlinvest

WhatsApp takes on the role of primary business communication and payment system similar to WeChat in China, but for the rest of the world, exponentially building on the 200 million business users it currently has. —Ethan Kurzweil, partner, Bessemer Venture Partners

Etc.:

Tesla maintains its leadership in innovation, and Elon Musk continues to be recognized as one of the greatest entrepreneurs in history. However, X remains a black mark on his track record as the unfiltered open-speech platform continues to experience a loss of big-name advertisers. —Michael Jones, CEO and managing director, Science Inc.

Many companies that are currently and historically commercial-only will explore selling to the Department of Defense for the first time. —Tess Hatch, partner, Bessemer Venture Partners

A new ‘space race’ era is bubbling up to the surface of public discourse between the U.S., China, and India. —Jordan Fudge, founder and managing partner of Sinai Ventures

Until Monday,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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