VC investments may focus more on energy startups

Venture capital funding worldwide is expected to shift their focus more towards startups in the energy sector that mostly have a clear business model than many of their Internet counterparts.

Moreover, VC investments are anticipated to move away from information technology and telecommunication areas, according to German banking major Deutsche Bank.

"Venture capital is an indicator of future economic trends, which suggests that there will be a shift away from IT and telecommunication towards energy, biotechnology and medical technology," Deutsche Bank said in a research report.

VC funds have increasingly shifted their investments into energy sector startups in the last few years.

"Such startups work on new ways of tapping traditional sources of energy and are often pioneers in the use of alternative energies," the report noted.

Currently, VC funds are pumping in money into lucrative business models of the future.

"Unlike many of their Internet counterparts, energy sector startups frequently possess a clear business model.

"They develop and market, for example, solar technology or electric cars, whereas many an Internet startup is still unsure of how it can also generate revenues from its users," it added.

According to the report, higher oil price and expectations of public subsidies for alternative energies have made energy sector startups more appealing to the investors.