
Another year is upon us and with it the next instalment of the annual World Economic Forum in Davos – a chance to focus on the agenda for the global economy over the next 12 months.
And as the world looks to the future, those involved in the tech space will feel the world’s eyes pointing squarely at them. The theme for this year’s forum is the fourth industrial revolution – the digital revolution – and highlights the continued excitement and anticipation around a sector where the feeling is that anything could happen. So, with this in mind, what do we think we’ll bare witness to in 2016? Hype cycles In the tech space of investors, entrepreneurs, journalists and the like, we can be prone to following and maybe even overestimating the importance of certain sector trends. These “hype cycles” can mean that there is a flurry of activity, experimentation and innovation before a wild fire tears through the brush to leave just the strongest in a position to truly thrive. Tech is a game of survival of the fittest – take the cryptocurrency sector as an example: 12 months ago there was a lot of noise around emerging startups but the moment may only now be right for some impressive block chain technology to really thrive. By comparison, the hype cycle around drones is currently in full swing but only time will tell who of the huge number of companies in this space will emerge as the real winners, and truly solve the growing challenges of local delivery networks.The ten biggest UK venture capital deals in Q3 2015
Geography In the height of the financial crisis we were used to seeing entrepreneurs from across Europe leave their home countries to set up a seed business in the UK. As the economic situation has stabilised I expect we will see more founders developing their offerings at home to prove the principle in their domestic market before taking the leap to build their business and raise finance in the UK. We here at Octopus are expecting to see many more businesses in the coming months, which were founded from any part of Europe, with a view to expand across the continent. This will be helped by the fact that entrepreneurship is a theme that governments across Europe are keen to promote and, in particular, we expect to continue to see great businesses coming out of Berlin and the Nordics. France is another area to pay attention to – 2015 was a good year for French tech entrepreneurship and with a strong engineering and software skill base, the French are in a great position to ride the wave of innovation in areas like the Internet of things. Cultural The greatest trend will be a maturing of the entrepreneurial culture in the UK and Europe. Over the last year we have seen a number of larger growth capital funds open around Europe, including Octopus’s $140m Opportunities Fund launched in October last year, as well as growth funds from Highland Europe and Lakestar, the firm behind Facebook and Airbnb which launched a €350m pot.Zopa, Secret Escapes and Deliveroo helped UK tech sector win record $3.6bn in 2015
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