Posted on 16th January 2017


The hottest sectors in venture investing 2017

The prices of exchange traded stocks fluctuate significantly. Current information is basically instantly reflected in the share prices after being made public. Therefore, investors have very short to non-existent time to react on it.

In non-listed companies the situation is different. Let’s take electric bus company Linkker Ltd as example. In just a few years, the company has been able to grow from a pre-revenue startup to an eight-digit business in turnover. The company got a multimillion order from Helsinki City over a year ago, which was public information. However, investors started asking for Linkker shares just last week, when Helsingin Sanomat published an article about Linkker electric busses replacing the old diesel models.

In my mind, the most important thing in investing is buying at a low level compared to actual market value. “No s*** Sherlock”, some might say. However, this is easier said than done in traditional asset classes. The values of blue chip shares or corporate bonds just react too quickly on any new information. One thing I like about venture investing is that it is easier to find undervalued shares.

Which are the sectors I am especially interested in this year?

I believe virtual reality (VR) and augmented reality (AR) are going to be big this year. Venture investors might say this is already ‘last season’. However, I think ‘the last season’ is picking up this year, when consumers are actually buying the products – just like in Linkker’s case. Availability of both, the VR devices and particularly the content, have so far been very limited.

One interesting company to follow is Hong Kong based Anima Picture Entertainment Ltd. They can create state of the art VR content with a fraction of the price compared to earlier methods.

Another fascinating area is about all the scalable and digital solutions taking over the traditional industries like construction, banking and healthcare. Typically, regulation, old habits or bureaucracy have hindered digitalization and growth of these sectors. If you are more interested in sectors like travelling, media and retail, unfortunately you missed the digitalization upswing already.

Interesting cases in ‘digitalization of traditional sectors’ are e.g. Finnish based Dottli Oy and Briko Oy. Dottli and Briko bring new information technologies to the healthcare and construction sectors, respectively. Dottli is also currently raising funds to expand their business, read more…

NB. We just bought VR system to our office. If you are interested in testing, you are welcome to our Helsinki office at “mummotunneli” to test how it works.

ANTTI PARVIAINEN