M&A deals reveal early-stage potential

This article is part of
The Guide: Investing in Technology

Another growing trend in the sector is companies innovating within traditional industries, such as recruitment and real estate. One example is Hackajob, which helps firms assess and recruit technical candidates such as software engineers and developers. Although only founded in 2015, the firm has already helped recruit candidates for the likes of Argos, Capital One, Apple and Giffgaff.

A strategy that involves investing at the very early stage – carrying a higher degree of risk than investment in more established businesses – is commensurate with potentially generating higher returns. But the balance of risk and return is undoubtedly made more attractive with the enterprise investment scheme, which provides tax incentives to investors. 

Liquidity is an area that has traditionally been weaker in the UK, but it has been good to see more activity in the exit markets in recent years, with incumbents – particularly US technology giants – buying European and UK technology firms. Since 2014 there has been an average of one acquisition of a European technology company per month from the top-five US giants: Facebook, Google, Microsoft, Amazon and Apple.  

With more growth capital now available in Europe, tax-incentivised schemes for investment, increasingly active merger and acquisition markets, and most importantly innovative companies of real substance being built, now is a great time to invest in the UK technology sector. 

Francesca Warner is an associate at Downing Ventures


Technology Trends: Five key themes for 2017

Alex Kerry, head of Winterflood Business Services, highlights five technology trends that adviser platforms, wealth managers and financial advisers need to consider:

“What can be disrupted will be disrupted. This is the universal law of innovation and is a concept the financial services industry will have to embrace as technology rapidly transforms the saving and investing landscape. In the past decade the industry has undergone profound regulatory change, and there has been a realisation that it needs to reconsider the way it engages with investors in a way that delivers more clarity on products and services. Consumers also need to believe their wants and needs are being addressed.”

1. Improving customer experience

“When we consider customer experience it is important all segments of the market are represented. While millennials are seen as the first technology-savvy generation, we must not forget about the underserved Generation X. Like millennials, Generation X prefers mobile and digital interaction and is comfortable transacting online. These people will increasingly also look to interact with financial advisers in this way. Research suggests the real key to engaging the Generation X audience and new investors is through enhanced customer experiences. We have already seen the emergence of groundbreaking digital investment solutions such as Wealthify, Scalable Capital and, but the revolution is only just beginning.”