Software remained the best performing sector within the angel investment landscape in the UK throughout 2018. Likewise, food & beverage, fintech and property ventures saw impressive growth. Fashion, on the other hand, appears less on trend, with the number of investors willing to back this category falling greatly. Meanwhile keyword searches for impact investing terms have rocketed while robotics is one of the fastest growing search terms.
At least, that is what Angel Investment Network (AIN), the UK’s largest and first online angel investment network has revealed in its first ‘State of the Angel Investment Nation’ findings. Based on the data of more than 100,000 businesses and 30,000 investors, it reveals a detailed picture of the angel investment landscape in the UK. Angel Investment Network connects startup businesses with angel investors and has reached more than one million users worldwide on its platform since launch 14 years ago.
The key findings include:
- Software is the number one category in terms of investment and pitches. It retains its number one place year on year.
- The UK’s position as a home of food and beverage is highlighted by significant growth in both investors and pitch ideas. Up from the 4th to the 2nd most backed category by investors. Meanwhile it is the third most popular category for pitch ideas.
- Property is also an incredibly robust category for both investment and entrepreneurs. It matched its 2017 positions of third most popular sector for investors and second for pitch ideas. On the back of this Angel Investment Network has launched BrickTribe – a platform focused specifically on property investments.
- Site activity mirrored growing societal interest in ‘impact’, with investor searches for impact-related terms up an average of 24.9% from 2017. The fastest growing sector was ’renewables’ which climbed from 40th to 32nd (a 25.4% increase in number of searches, ‘greentech’ showed a 25.7% increase while ‘environmental’ had a 23.5% increase.
- Meanwhile searches for ‘robotics’ were up by 7.8% becoming the 4th most searched keyword by investors.
The Top 10 Sectors for Pitches:
- Food & Beverage
The results also revealed a large discrepancy in some categories between the level of investment interest and the number of entrepreneurs looking for funding.
- While fashion is the 6th largest sector for pitch ideas, it drops to 14th in terms of the number of investors interested. There are three times as many pitch ideas as investors.
- Technology sees a significant discrepancy between investors and pitch ideas. While it is the 4th most popular sector for investors, this falls to 9 for pitch ideas.
- The market seems to be underserved for investors in the medical sector. It is the 6th most popular category for investors but only 14th for pitch ideas.
According to AIN co-founder James Badgett: “We are pleased to present our first public ‘State of Angel Investment Nation’. We hit the million-user mark just before the end of 2018 and so we feel the volume of our data is significant enough to yield meaningful insights.”
“Unsurprisingly, software and technology continue as strong performing sectors. We think the UK’s growing reputation as a FinTech hub, in particular, has helped these sectors maintain their positions. We’ve also seen a rise in other sectors including insurtech, AI/machine learning and IoT.”
The Top 10 Sectors for Investors:
- Food & Beverage
- Business Services
According to AIN co-founder Mike Lebus: “The growth in investor interest for impact-related businesses is a rapidly rising trend and we expect this to continue over 2019 and beyond as investors increasingly become aware of the value of a conscience-driven approach. Impact projects we raised funds for in 2018 include Verv – an AI home energy assistant – and Demizine – an end-to-end home water recycling system using technology originally engineered for space stations.”
Mr Lebus also commented that notable FinTech companies AIN has raised for are Coconut – current account with inbuilt accounting – and Novastone – a ‘WhatsApp’ for the finance sector. Another cutting-edge client in 2018 was Humanising Autonomy who’ve built the most advanced system for human-machine interactions using London pedestrians to train their algorithms.