Expert Comment: What Startup Sectors Are Investors Most Interested In This Financial Year?
This article was previously published in TechRound
As a new financial year begins, investors all over the UK will be critically assessing their investment portfolios.
As the country still battles high inflation, a cost of living crisis and high interest rates, it will be interesting to see which sectors investors see as the most economically resilient. Last year, AI seemed to take the crown, as Statista reports that worldwide spending on AI-centric systems was estimated at $154 BN in 2023 across all industries.
Let’s see what (and where!) investors are eyeing up this year.
Where are the UK’s biggest startup hubs?
Whilst investors tend to allocate their money globally, there’s no doubt that some will also be looking on home soil for new opportunities to boost their portfolios.
While London continues to be a major hub for startups, other cities across the UK, such as Birmingham and Bristol, are also seeing significant economic growth. These cities are becoming the birthplace of a wide array of startups, making the UK an even more appealing economy to invest in.
But investors aren’t just looking for good ideas. Investors are becoming more selective, focusing on startups with strong business models and the potential for high growth and disruption.
So let’s hear it from the experts: Which sectors are investors most interested in this financial year?
What startup sectors are investors most interested in this financial year?
The trends this year are focused on sectors poised for hypergrowth based on demographics, industry dislocations and secular inefficiencies. As expected, there is considerable activity in AI and ML as these sectors continue to lead the pack, with their transformative potential across various industries. What is new is the significant interest in the space sector driven by advancements in rocket technologies, delivery mechanisms, satellite technology and the burgeoning commercial space industry, exemplified by Voyager Space building the next Space Station.
The surge in investment in digital healthcare and telemedicine highlights the accelerating shift towards virtual care delivery and the ever-growing significance of telehealth platforms and digital health technologies. This is further compounded by the shifts in demographics, the ever-escalating healthcare costs and poor delivery of care in many areas that lack physical access and logistics.Biotech startups continue to draw attention with breakthrough innovations in personalised medicine, gene editing and drug development like nanome.ai’s platform for drug discovery.
Quantum computing is becoming more important as computing power is the main limitation to Ai progress. Its advancement offers the potential to solve complex problems across fields such as cryptography and drug discovery. Furthermore, in line with increasing environmental concerns, sustainable energy startups are gaining traction as investors seek eco-friendly solutions to address climate change.
Ivan Nikkhoo
Managing Partner
Navigate Ventures
