Tech still in the ascendency

Despite the credit crunch and claims of a knock on effect on the business economy, there is clearly cash available for smart ideas.

According to market watchers at Ascendant, 2008 has started very well for the tech sector with increase in both the value and volume of private equity investment deals, though more investment groups appear to be pairing up to commit cash in a bid to share risk.

Although activity declined slighted, VCs and private investors increased the capital they invested in Q1 by 15 per cent to £357m - backing 13 per cent more companies, which rose to 72 businesses from this time last year.

Ones to watch
Internet/Wireless services and green technologies saw a strong increase in investment, Communication Services also displayed modest improvement but all other sectors declined. 22 Internet or wireless firms received backing in the last quarter, up from 17 on the corresponding quarter of 2007.

Losers
Semi/Opto companies experienced their lowest level of Q1 VC investment for many years. Just three companies shared £10m, compared to £76m in Q1 2007.

Steady as she goes
Investment in software businesses remains largely static, but the sector remains the second largest, according to funds invested. On the upside, the number of businesses that received investment increased to 20 – up significantly from the low of 14 this time last year.

Where it’s at
Finally, London-based firms continue to dominate, hogging half of VCs’ funding. The North of England did well, gaining £43m, followed by Scotland (£42m), Cambridge (£22m) and latterly by the Thames Valley and Ireland who both received approximately £17m

Despite the credit crunch the M&A markets are storming – lots of cheap deals around, I guess, but we’ll know more come the summer.

Also posted on www.rainierpr.co.uk