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Looking for angel investors? Your business options are limited

December 5, 2017 7:00 am

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Becoming an entrepreneur used to be a very exciting thing to do in the past. It was certainly easier to have access to capital once you get a creative idea to put into action. Any idea, be it an invention, a technology innovation or just a wild idea.

This is no longer the case.

If you’re planning to start a new venture that is not related in any way to technology, then you’ve most likely got a problem.

Almost every single sector nowadays has become technology-related one way or the other, except very few areas, that is.

So what are the sectors that angel investors look at mostly nowadays?

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Technology is at the centre of almost everything

If you look at the sectors that angel investors look at for investment, you notice that technology is at the very centre of most endeavours.

Angel investors focus on a variety of fields ranging from Artificial Intelligence to Fintech, Internet of Things (IoT), e-commerce, Augmented Reality and others.

According to a recent study by Apoorv Ranjan Sharma, the co-founder of Venture Catalysts, artificial intelligence or AI has emerged as an extremely promising sector for prospective investors. “AI-based solutions, particularly automation technologies, big data analytics, and machine learning tools, are being used by companies across business verticals as diverse as ecommerce, ERP, retail stores, healthcare, and information security to gain a critical competitive edge and ensure continued relevance in the market,” he said.

Another study published by The Telegraph in 2015 states that financial technology is the most lucrative sector for angel investment, delivering the highest growth out of any industry.

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According to a report by Lendit, a lending and fintech event, “since the beginning of 2014, 1,666 angel investors have invested in fintech accounting for approximately one-third of fintech investment; nine of the 10 most active angel investors in fintech are US-based with Techstars reportedly the top investor by deals at 33.”

Healthcare tech

Healthcare tech companies are also the centre of attention for investors.

In the first three quarters of 2017, four of the US Midwest’s five largest deals involved healthcare tech companies, as reported by Forbes. It said that these four deals brought in $870 million in investment.

Even the UAE has caught the tech bug. How?

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UAE, a hub for tech startups

The UAE is known to be a hub for entrepreneurship in the region. The ecosystem has grown tremendously in the past few years according to Wamda, a platform that aims to accelerate entrepreneurship ecosystems throughout the MENA region.

According to CB Insights, a technology analysis site, the country is now home to two unicorn companies that were each valued at $1B in 2016. “The ride hailing company Careem Networks reached unicorn status in December and the e-commerce company Souq.com received a billion dollar valuation in February,” it said.

Using the CB Insights database, it was noted that there are at least 32 well-funded tech startups in the UAE, half of these e-commerce focused and located in Dubai.

The most recent venture to receive funding in the UAE is not in the technology sector, however.

Bayzat, a leading provider of insurance and HR solutions in the Middle East North Africa (MENA) region, has recently secured an additional $5 million in funding led by new investor Silicon Badia, a prominent venture capital firm based in the MENA region and US, alongside existing investors BECO Capital and Hamed Kanoo Co.

This additional funding brings Bayzat’s total funding in this Series A-1 round to over $8 million after the company received its initial funding tranche earlier this year from strategic investors.

Non-tech angels  

Entertainment and renewable energy are investments that are not directly related to technology.

Hackernoon, a platform for technology news, cites a 2016 report by Martin Prosperity Institute, saying that software sector in the US has around 36 percent of the VC investment with a value of about $12 billion, whereas, media and entertainment comprise 9.5 per cent. It said that media & entertainment sector managed to secure $881 million by closing 114 deals.

According to Startup Explore, a European startup funding community, investors have lately increased their interest in renewable energy startups, with more than $2.1bn invested since 1999 in 215 deals.

“According to the report, investment in such companies will hit $400 to $500bn by 2020,” it added.

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By Dana Halawi
Senior Journalist
Dana Halawi has over seven years of experience in Journalism with articles published in multiple magazines and a newspaper in Lebanon. She specialized in Banking and Finance at the Lebanese American University and has a Master’s degree in International Affairs.



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