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31st July 2017

Why invest in the technology industry in 2017?

by Huddle Capital

Huddle Capital is a technology based alternative finance platform, facilitating peer to business lending, an innovation in the financial services sector.

Perhaps in future, Huddle may decide to do an equity raise – however, it’s not on the cards for the foreseeable future. As Huddle is committed to educating investors, this blog aims to open your eyes to equity investments in technology. It was recently reported that the technology sector is now growing faster than the UK economy. Last year, 72% of venture capital and private equity investments went to businesses located nationwide and amounted to £9.2billion.

The third annual Tech Nation report revealed that the UK lead head and shoulders above other European countries in terms of technology investment, with £28 billion investment funds in technology since 2011. This was compared with the likes of France and Germany where £11 billion and £9.3 billion was invested in technology, respectively.

The sector continues to grow, with the increased investment and the subsequent growth in talent, it has now become a major contributor to the nation’s economy and contributes around £97 billion per year, a 30% increase over five years.

Why should you consider investing in the technology sector?

There is a reason why the London and wider UK technology sector attracts more investment funds than any other European country. 2016 saw an increase in the presence of global technology giants in the capital, with Google announcing their £1 billion investment plan to expand their Kings Cross based head offices, Apple planning to open headquarters in Battersea and Facebook expanding to create 500 additional jobs in the city. London and other areas of the UK are quickly becoming technology hubs, that are rapidly creating high numbers of jobs and investment opportunities.

Not only is the industry growing rapidly and creating new jobs, but with further access to finance, through investments, the industry looks to go from strength to strength, with no signs of slowing down anytime soon.

Technology has such a broad scope and integrates with many other industries, including healthcare, pharmaceuticals, retail, entertainment, communications, travel and FMCG, to name a few. This shows those seeking to find a suitable business for their investment funds, are likely to have a wider variety of choice and often be able to find a niche in an industry they understand or are familiar with.

Technology is not limited to telecoms and personal devices, a significant growth is expected within a number of industries, that are rapidly gaining interest and attention from investors;

  • Social media is now considered one of the key players in the marketing sphere. The data gathered from these networks and the benefit of social analytics are helping businesses to understand their consumers and target new ones, better than ever before, in a space where they are most active.
  • Software development for enterprises will ensure a more user-friendly experience and offer an increase in employee output by streamlining systems. More businesses will look to adopt enterprise software to improve their capabilities and performance. This will increase the need for investment funds within the industry, in order to expand to meet a growing demand on the companies creating the products.
  • Education technology has been and looks to continue to boom. The increase in demand for accessible educational technology has lead to web services, that mean children and adults around the world have more opportunity to learn and grow. Low price points appeal to the majority whilst offering less privileged countries easier access to free education services, which in turn help build communities. Choosing to push investment funds into the growing EdTech not only fuels the development of a better world but also looks to continue to grow over the next decade.
  • Artificial Intelligence and automation are now on the cusp of becoming a booming industry, replacing low skilled labour jobs, streamlining processes and reducing losses due to the removal of human error. Roles within factories, farming, data entry and public transport, look to see an increase in demand for automated workforces. The industry aims to secure investment funds to ensure that they can meet the demand from businesses looking to automate their processes and reduce their costs whilst increasing outputs.

Considering the points discussed now is a better time than ever to become familiar with the technology industry and the investment opportunities that it has to offer. At Huddle, we aim to educate both our investors and borrowers, to ensure that we build a more informed industry.

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