Future of Marketplaces: Key Takeaways from the Dealroom x Adevinta Report

Marketplaces are doing well and certainly have no intention of stopping in their development. Global online marketplaces have grown 70% in value since Jan 2020 to more than $5 trillion, outperforming tech overall. Moreover, online marketplace unicorns (a term used in the venture capital industry when describing a privately held startup company with a value of over $1 billion) continue to raise billions in funding across every sector. What’s more, new startups are building more vertically integrated models to unlock lucrative new markets.

These are only a couple of information from The future of marketplaces report from Adevinta Ventures, Dealroom, and Speedinvest, so keep reading for more insights!

The global acceleration of marketplaces

The first generation of online marketplaces translated town squares and bulletin boards into eBay and Craigslist. They develop widely and still want to impact significantly the way people buy on the internet.

But marketplaces have evolved more in the last 20 years than in the previous 200. Newer models like Uber and Cazoo have actually made the “marketplace” less visible to the consumer, reducing transaction complexity.

So yes, the role of online marketplaces has been amplified. 

In the last ~15 months, there’s been a tech-driven bull market, the direction of which was anticipated by many but the scale by few. 

As a result of this acceleration, there are now 30 known marketplaces worth $20 billion or more, with the world’s top marketplaces (public companies and private unicorns) worth a combined $5 trillion.

source: The future of marketplaces report

Marketplaces outperformed the broader tech sector, with Food and Grocery Delivery, Health, and Fashion driving this growth. So, as you can see, marketplaces have benefitted enormously, especially in areas like Fashion, Delivery, Digital Health, and eCommerce.

source: The future of marketplaces report

But it’s not always colorful. On the other hand, some markets have seen several billion dollar investors exit through various events such as IPOs, M&As, and SPACs.

source: The future of marketplaces report

Venture capital investments

As of April 2021, more than 370 marketplace unicorns have been created globally.

Some trends were seen in more private markets, with venture capital in Q1 2021 smashing the previous investment record and nearly growing three times as much as in Q1 2020.

source: The future of marketplaces report

What’s more, at the current rate, investment in 2021 markets will more than double, from $59 billion to $132 billion.

source: The future of marketplaces report

But it isn’t all, as nearly all regions are seeing rapid growth in VC investment into marketplaces.

source: The future of marketplaces report

In Europe, some companies reported enviable growth after the first quarter of 2020. They were sorted into:

  • Mobility,
  • Meal and grocery delivery,
  • Clothes and Accessories,
  • Digital health,
  • Education,
  • Travel,
  • Lending,
  • Horizontal,
  • and Home search.

These most profitable brands include:

source: The future of marketplaces report

Vertical integration and enablement

Innovation generally goes in two directions: greater ownership of the value chain and enabling other products. As a result, marketplaces are trying to get larger and larger markets, enabled by new models. What’s more, embedded finance is another “virtual last step” to unblocking much greater markets.

source: The future of marketplaces report

Of course, there will be a series of reports exploring new models of markets, starting with financial technology-based markets in the future. This will allow you to stay abreast of current trends and stay ahead of competitors who are not yet aware of emerging models.

While asset-light models like Craigslist have proved resilient with the defensibility of high liquidity, full-stack scale efficiencies, combined with an abundance of cheap capital, have led to a rise in asset-heavy models in recent years.

source: The future of marketplaces report

Learn more about marketplaces 

The broader marketplace and ecommerce ecosystem are increasingly connected. So, if you are planning to implement your business in the world of marketplaces, you should know some dependencies and the most important platforms that will help you gain new customers.

source: The future of marketplaces report

Over to you

With the tremendous growth of markets, vertical integration, embedded finance, and increased consumer penetration of the Internet, many segments will soon be transformed by more leading Internet markets, opening up vast new opportunities.

After all, the most significant opportunities for online marketplace still lie ahead.