Market insights & investing: Cybersecurity and timberland
Jingxu Jia, Sophie Maguy, Kattalin Stahl, Kimberly Tran
Profs. Ramesh Johari and Riitta Katila
CRCM Ventures is a venture capital investment firm based in San Francisco. The firm invests in early stage companies, targeting consumer, climate tech, frontier tech, health, and fintech industries.
CRCM is interested in exploring the timber and cybersecurity industries, given the global push for carbon neutrality and transitions to remote work and integrated internet of things (IoT) systems. Venture capital is an environment with a high level of uncertainty, as investments focus on emerging industries. The data is therefore extremely limited, making it hard to predict the profitability and the growth of the timber and cyber market and opportunities. In this project, we worked with CRCM to help identify market trends in cybersecurity and timberland management markets, identifying promising companies and providing market-specific investment recommendations.
For this project, we produced a set of recommendations for CRCM in timber and cybersecurity. For timber investment, our recommendation is to invest in a Forestry Management Company (TIMO account). Compared to the direct investment in and management of land or investing in a Real Estate Investment Trust (REIT), a TIMO account allows higher levels of control, while still supporting a well-tailored portfolio.
For cybersecurity, we suggested moving forward with opportunities in cybersecurity awareness and endpoint security. Next steps for CRCM would be to meet with the list of cybersecurity awareness companies we have sourced and continue to learn about the endpoint security solution offerings for extended detection and response.
Our research approach consisted of four main stages, beginning with a familiarization of the market and the topics as a whole, leveraging market reports and news. This was followed by a subsector exploration and a deep dive for each market, both of which helped us identify the most promising subsectors in terms of future growth and profitability. During the exploration, we leveraged market data to size markets as well as referred to information from industry stakeholders.
For the deep dive, we continued to look at market reports and gathered the qualitative and quantitative data available to assess the potential and profitability of investment opportunities. The final stage was the evaluation of promising startups and more specific investment opportunities.
Using the insights from our deep dive and CRCM’s investment thesis, we compiled a list of promising companies and a set of industry recommendations.