Mentor, Reuben Buchanan

Are there trends that indicate where investor money is going?

StartupSmart /

We regularly survey the 9,200 investors on our Wholesale Investor database to find out what sectors they are keen on, which provides an interesting snapshot into what investors are looking for.

   

Interest in private companies remains very high. In fact more than 55% are seeking private companies.

 

Sectors of most interest to investors are:

  1. 67% – Mining/mining services. With continued media attention success of some IPOs in 2010 (Hunnu Coal, Aston Resources, etc) there is obvious focus on this area.
  2. 36% – Healthcare/biotech. Last year large deals with Acrux and Mesoblast saw the spotlight return to Australian biotechs. In particular the last 12 months have seen listed Australian biotechs gain more than 120% (according to the PWC Bioforum) on the stock market.

    That rise in interest is reflected in the private space, with investors now seeking out the next big thing.

  3. 34% – Cleantech. This has been consistently in the top of our survey for the last two years.

    The move from number one to number three is a reflection of changes in government policy during the past 12 months, with cleantech funding initiatives reduced or scrapped.

    Companies in this area still receive high interest from investors with a general attitude that it is the next boom sector.

  4. 32% – Internet/technology. This sector is hot. Large deals in the US and the acquisition of Spreets by Yahoo for $40 million have renewed a high level of interest and a bullish sentiment in this sector, especially for private companies.

    The tech sector in Australia is primed for a bull run and many of Australia’s tech veterans have been investing heavily in this sector during the past two years in preparation.

        There is no doubt that 2011 is a good year to be presenting your opportunity, especially if it’s in one of the above sectors.

         

        That doesn’t mean deals in other sectors won’t attract funding – a quality opportunity properly presented always attracts investors.

         

        It’s just that investment is easier to attract if it’s in one of the top four sectors.

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