Big Data, security, VR/AR, and FinTech will be the sectors with highest growth potential in 2017, according to findings from a survey gauging the sentiment of tech investors.
SharesPost, which makes private equity stock trades, released the results Wednesday from its first private tech investor sentiment survey. The results from the survey — gathered between November 21 and December 15, 2016 — are based on the expectations in 2017 of more than 600 accredited individual and institutional tech investors.
When given a chance to choose three in more than 15 options, investors picked Big Data/Analytics, Security Software, VR/AR, FinTech, and Wearables (IoT) as top five when it comes to the highest growth potential, which generally means the sectors that are most in demand. Gaming, Ad-Tech, and Clean-Tech were the least selected choices among all investor groups. Infrastructure apps, ecommerce, social media and messaging, and new media were among those in the middle of the road.
The results of the survey showed that venture capitalists and private equity investors (VC/PE) generally preferred long-term growth opportunity in enterprise software companies versus consumer mobile or Internet companies — especially considering that three out of the five most valuable public companies today such as Google and Facebook are in the latter group, versus Microsoft in the first group.
Some 49% of investors surveyed said private company valuations will increase in 2017 compared with 28% of investors expecting valuations to decrease. The findings suggest that this implies “a bullish sentiment among investors toward private tech companies, particularly given the downward valuation correction we witnessed through much of 2016.”
Public equity investors also expect 10 unicorns — a startup company valued at more than $1 billion — to go through an initial public offering (IOP) within the next 18 months. Their VC/PE-focused counterparts estimate nine IPOs.
SharesPost reports between six and eight $1 billion or more IPOs of VC-backed tech companies every year since 2009. This annual run rate has largely stayed within this range since the Great Recession, with few peaks between 2013 and 2014, and slumps in 2016.