Investors look to back tech and ethical businesses

A quarter of investors are looking to support technology business in the next two years but who are going to be the lucky companies who will receive that needed capital?
According to a recent report, over 8 million UK investors want to support ethical businesses that make a positive social impact.

The changing appetites of investors has become a topic of keen interest for advisers, fund managers and investors themselves. As individuals look to become more closely involved with the societal-impact their capital is being used for, investor appetite is most definitely not hinged on solely returns. With 46% of investors more likely to invest in a business that makes a positive social or environmental impact, in 2018 the value of assets in impact investing doubled to $228billion. Responding to the attitudes of investors is key to predicting the rise of future-facing sectors and providing relevant opportunities for entrepreneurs weighing up progressive businesses that can fulfil sustained rounds of finance.

IW Capital launched recently the 2019 Citizen Investor Report and it comes as figures from KPMG show that FinTech in the UK received over $16billion in the first half of 2018 alone. While BioTech raised £2.2billion in 2018, over half of this coming from venture capital and private investors.

IW Capital has conducted exclusive, nationally representative research into the ambitions of UK investors. The study, of over 2000 UK adults, dissects investment trends, the goals of investors and future of funding options for the businesses that will make up the foundation of the UK economy in years to come.

Some of its Key stats are:

  • A quarter of investors (24%) are looking to support tech-based businesses, such as FinTech and BioTech, in the next two years amounting to 4.5 million people
  • 21% of investors are looking to support a business within the creative industries – 3.8 million people
  • 46% of investors are more likely to invest in a business that makes a positive social or environmental impact – 8.6 million people
  • 42% of investors would support a local business or entrepreneur who benefits their community – 7.9 million people
  • 44% of investors agree that the wealth of information available online allows them to invest in new technologies and sectors they may have been previously unaware of – 8.2 million people
  • 47% of investors agree that baby boomers (aged 55-72) are the most powerful community of investors to help SMEs grow in the UK – 8.9 million people

Luke Davis, CEO of IW Capital, discusses the research and the implications for investment in the coming years:

“This research reflects some of the trends that we have seen from our investor base in the last year or so, there has never been more demand for innovative, high-growth business investment opportunities. To see that such a large number of investors in the UK are looking to invest into technology companies such as FinTech and BioTech shows the desire that exists to support innovationin the UK. Coupling this with an ever increasing conscientiousness around the environment and climate change paints a picture of a future facing and forward thinking SME arena and community of investors. Private investors are a hugely important source of growth finance for small, IP-based business that are more often than not turned away by banks and traditional lenders. 

The small business economy employs over 16 million people in the UK and contributes around £2trillion to the economy each year. There is huge growth potential emanating from the sector within the last decade, including 13 technology unicorns in the last year alone. This demonstrates the latent opportunities that exist in this area with the support of investors, whether through the Enterprise Investment Scheme or other routes of private equity investment.”

More information about the research  is available at IW Capital website.