New Year, new hope

2024 has been a fruitful year for Betawave, we have made investment in several companies, we have high hope that we will see some exits in 2025.

Interesting enough, the coming 2025 will actually not be as turbulent as many thought. The economic forecast has less uncertainty awaiting. With 2nd Trump administration, several things are almost certain:

1. The new government will focus on US-first agenda, that will include a series of investment in some deemed critical industries, for example, semiconductor, defense, new energy and AI. Biotech will continue to grow like it used to be. US may invest more in manufacturing capability, but not for just supply chain safety, but for some real productivity improvement. From this perspective, we don’t expect a lot of changes.
2. The regulatory will be greatly simplified to unleash productivity growth. This is likely to happen through government cutting workforce, or simplify more in tax system. Tax cut is likely to come.
3. The anchor setting interest rate will be further reduced, so that the borrowing cost for both the government and enterprises will be lower, this will further stimulate the investment. This will also lower the debt burden of the country. Inflation is likely to stay are low level.
   

4. Trump cares a lot about the stock market, more broadly the capital market, we won’t be surprised that he will take measure whenever needed if stock market drop significantly. As a growing stock market provides much needed liquidity and capital to all the things he wanted.

5. The IPO market and Merger/Acquisition market will be hot again. This will be very beneficial to Venture Capital and Private Equity to get exits.

We have seem growing IPO numbers in 2024 and we are expecting more.

What areas will be our focus in 2025?

We will continue keep our eyes on AI development, as a small firm, we won’t be able to have meaningful participation in large models, however, we believe 2025 will be a critical year to witness lot of innovation in AI application. AI Agent is no longer an area that venture capital should place huge bet on, but AI tools for productivity improvement in specific domains will be an area we want to study more. Furthermore, the data harvesting side, the sensors, automation, edge AI computing will continue to be our focus.

Medical device is an area we would love to study more. With advancement in AI, we wiil study more in failed DX technologies to see if new computing can potentially turn around those “failed” technologies.

New materials, especially in reticular chemistry can be a very interesting niche market of us because we have good resouces in the field.

Overall, we have great hope for 2025 and we look forward to working with more innovative founders.