Unicorn Hunting – Using Data To Navigate The Private Investment Market
Partner content produced in association with Neudata
The growing availability of data on start-ups is enabling - and forcing - venture capitalists to approach their deal sourcing efforts differently. AlphaWeek’s Greg Winterton spoke to Orla Browne, Head of Content, Dealroom.co, to learn more about this trend.
GW: Orla, the rate of growth of the availability of data on private companies is significant. How is this impacting VC deal flow?
OB: The VC market is the most active it has ever been. At its current rate, global VC investment in 2021 is on track to pass 2020's full year total by the end of Q2. But it's also increasingly competitive. A record number of new funds were raised by VCs in 2020, 189 in Europe alone, up from 148 in 2019. In a busy, competitive market, data is your friend. Every investor now has to tool up to source deals and assess companies at pace.
GW: How are VCs engaging with this data? What are some of the trends you are seeing here?
OB: VCs are very data savvy, and of course always looking for an edge. In fast-paced industries, new indicators can emerge at any time that might make the difference between a cheque being signed and not. Many of our own product developments have come as a direct result of investor requests. Beyond raw growth figures we're being asked about start-ups’ tech stack, or the number of open job roles they have available. Diversity and impact focus are also two big topics of interest. And investors are looking ever earlier in company growth journeys to spot potential winners. Some of the most exciting innovation starts in university research departments, which is why we're now mapping university spinouts, so that investors can start finding their next targets while they're still on campus.
GW: Every VC wants a piece of the next unicorn. How is this kind of data supporting that goal?
OB: Broadly there are two ways of finding companies - network and data. As global tech ecosystems have evolved and matured, unicorns are no longer a rare breed of company born in the same half dozen zip codes in Silicon Valley. Europe has now created over 260 unicorns, based in more than 30 cities. That makes relying on network a lot harder. If you want to find the next Spotify (Stockholm), UIPath (Bucharest), Bolt (Tallinn), Graphcore (Bristol) or Glovo (Barcelona), data is going to be essential to having them on your radar from day one.
Orla Browne is Head of Content at Dealroom.co. She will be presenting ‘Unicorn Hunting – Using Data to Navigate the Private Investment Market’ at the Neudata Summer Online Summit at 11.25am ET / 4.25pm GMT on Thursday, June 17th. Click here for more information and to register
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