Next year will be big for companies working in virtual reality, edtech and e-commerce, said New Enterprise Associates general partner Rick Yang.
For virtual reality, which has been on the fringes of the mainstream for many years now, expectations could not be higher, Yang said.
"I think 2016 will be a tipping point for VR. I think it's probably not quite in the way that a lot of people think it will be," said Yang.
Though Oculus, owned by Facebook, continues to lead when it comes to VR, it's Rift product requires substantial investment on the part of the consumer.
Time will tell, of course, but Yang believes real growth in VR will come from adoption of the more lightweight mobile VR headsets like the Samsung Gear VR — which is powered by Oculus — and Google's Cardboard.
"The fact that Google is so big today in education, in distributing products to schools, I think they're going to continue that trend," he said.
With or without any assistance from VR technology, edtech is also poised for rapid advances in 2016.
"People are starting to understand the power of this educational content, and I think people are willing to pay for it, so I think it's going to be a big year from a monetization standpoint of high quality, highly produced educational content," he said.
E-commerce companies will also continue down a path some started this year — that of opening physical stores. Warby Parker, which sells high-end glasses, already has one, and mattress maker Casper, which has experimented with pop-up stores, are possible candidates, Yang said. (NEA is an investor in Casper.)
Autonomous products — such as drones and self-driving cars — will see rapid innovation and substantial investment next year, said Yang.
Those best positioned to profit from those technological advances will be companies already in the market and gathering data. "When it comes to autonomy in machine learning, it's all about the data. If you have access to that data — especially if you have access to proprietary data — that just gives you a huge leg up," he said.
This is particularly true when it comes to autonomous vehicles, says Yang. All the data collected allows automakers to better understand driver behavior and continuously tweak algorithms to improve accuracy and safety.
"Folks like Tesla that have already built in certain aspects of autonomous driving one step at a time," he said. "I think those guys are going to be very well poised as regulation allows them to step beyond the bounds of the features they're building today from an autonomous driving standpoint."
When it comes to start-up funding and exits, 2016 is likely to be a more challenging funding environment than the first half of 2015 was, Yang said.
"I do think the valuations got ahead of themselves over the past two years. And so you'll see a little bit of cooling off from that front. I don't think you'll see a lack of funding options, I just think they'll be at a discount to where, you know, valuation multiples were looking in the past two years.
For early-stage companies: "I don't think anybody expects any slowdown in innovation at the early stages. And so from a funding perspective, when you are investing in these early stage companies, it's a little bit less about the valuation just given the nature of the market," he said.
When it comes to exits, the trend of staying private longer will persist and tech giants — from Facebook to Apple — will look to acquire start-ups to maintain growth and obtain new technologies, said Yang.
"I don't think that any of the big tech companies are scared of acquiring companies right now, they still have quite a bit of cash on the balance sheets. And as I kind of mentioned in one of the previous questions, I do think they're looking to other services outside of their core products for growth in the next year," he said.