London is often referred to as the eye of Europe’s venture capital ecosystem. Over the past decade or two, venture capitalists in the UK capital have helped numerous tech startups become household names, but there is still a shortage of funding, particularly in the industrial high tech sector. While industrial high tech is by no means a new industry, it can play a vital role in the advancement of technological innovation in the UK.
The Importance of Proper Funding
According to the CEO of EcoMachine Ventures, Ilian Iliev, industrial high tech startups can potentially deliver very high investment returns, but they will not be able to grow without sufficient funding. These startups face a lot of risks and challenges at the early stages of development, which can cause them to become stagnant or shut down if proper support is unavailable. By co-investing with tech-oriented corporates, investors can help the startups mitigate risks, overcome challenges, and build a solid foundation for growth. The corporates can offer invaluable assistance by providing the knowledge, expertise, and technological support needed for developing innovations.
With Brexit in mind, it is more crucial for industrial high tech startups to secure funding. Lack of funding has forced many startups to file for UK or Europe-wide patents instead of global patents. This can come back to bite them following the exit as it will significantly undermine their valuations. Startups need to take internationalisation and the export markets into consideration at the early stages, and investors can help them go global by providing the necessary funding.
Challenges of Investing in Industrial High Tech
One of the main reasons why investors are hesitant about investing in industrial high tech is because the industry is very difficult to break into. If they are investing in consumer tech, it is relatively easy for them to put themselves in their customers’ shoes. Investing in industrial high tech startups, on the other hand, require more knowledge and skills. In addition, the sector is also less transparent than other tech sectors, making it difficult for investors to make accurate projections. However, the lack of transparency can be beneficial because it gives startups the freedom to develop without having to worry about competition. However, once investors overcome the challenges in the initial stages, they can look forward to profitable days ahead. According to entrepreneur Jason Sugarman, investing in a technologically innovative company is the key to surviving and succeeding in the future.
Investors who wish to remain profitable over the long term should consider investing in industrial high tech startups, because it will ensure that their investments will stay relevant in the future, despite changes in technology.