Jean Miller, CEO of Investing Zone, looks at how crowdfunding could be a future AIM feeder for high-growth technology companies.
Last year, tech flotations accounted for a third of UK IPOs, firmly cementing the country as home to some of the best tech start-ups in the world.
Following this surge, the head of UK primary markets and AIM at the London Stock Exchange, Marcus Stuttard, proclaimed that the pipeline for tech IPOs remains ‘very strong’ for the next year.
Stuttard’s predictions highlight that confidence is returning and investors are getting excited about the potential of new technologies and high-growth companies, something which we’re also witnessing.
Rezatec and Rockstar
British satellite and environmental data products provider, Rezatec, is very close to completing £500,000 as part of larger equity funding round using the InvestingZone equity platform.
Rezatec supplies its customers with high value environmental data products that help them manage the impact of environmental change on their businesses and has also received funding from the Technology Strategy Board (the UK’s Innovation Agency), the UK Space Agency and the European Space Agency. The company has contracts in place with a range of users across the energy, supply chain and agribusiness sectors.
In addition, Rockstar, a network storage solution for the SME market, has successfully raised £325,000 using the InvestingZone platform. Rockstar combines physical storage with a cloud-based functionality so that customers are able to access their data from anywhere in the world. It targets a gap in the SME data storage market left by Apple’s refocus on the consumer rather than the enterprise solutions. The company is already winning orders and achieving revenue, their exciting growth plans which include Private Cloud solutions marks them as one to watch for the future.
Crowdfunding: A feeder for future tech IPOs?
Whilst the growing appetite for hyper-growth companies is reassuring, it’s important for investors to remember that tech start-ups often require larger funding requirements and have longer time scales to market however, they are also generally more likely to generate returns for investors.
What’s needed for ambitious tech start-ups is a stage before IPO. Early-stage tech companies need an opportunity to raise finance, grow effectively and gain valuable experience of working with shareholders. Equity-crowdfunding achieves this by allowing companies to benefit from the experience of sophisticated investors. In the long-term this could enable a smoother – more successful – transition to IPO and avoid the potential of another tech-bubble emerging.”