Cloud computing ranks highest in investor confidence survey
Wed 13 Aug 2014
Confidence among venture capital investors is stronger than ever in the technology sector, according to a recent survey conducted by the National Venture Capital Association (NVCA) and Deloitte.
The results of the 10th annual Global Venture Capital Confidence survey were released today, and revealed that investors are increasingly attracted to growth sectors in the digital world, such as cloud computing, mobile tech, and robotics.
Jim Atwell, national managing partner at Deloitte’s Emerging Growth Company reported “very positive results on the market overall, and very positive on tech.”
“Tech companies are the sectors that have the most confidence and the most excitement around them,” he told CNET.
The worldwide survey collected responses from over 300 venture capital, private equity and growth equity investors in May and June of this year. Topics covered included confidence in overall investment opportunities, as well as in specific markets and sectors. As a whole, the results found a constant growth in confidence over the past three years. According to NVCA and Deloitte, this rise in confidence could be credited to favourable capital markets, abundant investment opportunities in innovative companies and a strong investor climate.
The highest ranking category for global investor confidence was cloud computing, which averaged a score of 4.11 on a scale of 1 to 5, with 5 representing the most confidence. Atwell suggested that this enthusiasm in cloud could be explained due to the low capital requirement, compared to other markets.
“It’s the low cost of capital to build a product and the ability to license it over and over again,” Atwell explained. “It’s a business model that’s very attractive to the industry.”
After cloud computing, mobile technology scored 4.02, and health IT and services earned 3.94. Other categories which featured in the top sectors included enterprise software, consumer software, new media/social networking, and robotics.
Robotics, in particular, saw a huge leap in investor confidence with the biggest year-over-year increase, up 43 basis points to 3.41.