Cloud Watch

VC investors hot for the cloud, mobile and robots

Deloitte survey shows increased investment in U.S. tech companies

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Venture capital fundraising has picked up steam in the U.S., with cloud computing, mobile technology and robotics getting solid backing.

U.S. technology companies are looking at a strong investment climate with global investor confidence in U.S. companies up significantly for the third year in a row, according to the 2014 Global Venture Capital Confidence Survey released by consulting firm Deloitte & Touche and the National Venture Capital Association, a trade group for the U.S. venture capital industry.

"For the past three years the U.S. has seen a significant increase in investor confidence, continuing the trend which began to take hold in 2012," said Jim Atwell, a managing partner at Deloitte, in a statement. "Improving capital market conditions lifted the pace of initial public offerings, fed by a strong lineup of new and innovative companies like we see on the Technology Fast 500 list, along with increased investor confidence both in the ability to fundraise, as well as to achieve favorable returns on investment."

So where are investors looking to sink their money? According to the 2014 study, which surveyed more than 300 global venture capital, private equity and growth equity investors in May and June, they've been largely backing cloud computing, mobile technologies and robotics companies.

The survey noted that for the second year in a row, U.S. venture capitalists named cloud computing as the area in which they were most confident of investing. Mobile technology came in a close second to the cloud and enterprise software wasn't far behind.

Robotics showed the biggest year-over-year increase in global investor confidence.

In the survey, investors were asked to rate their confidence levels in different industry sectors on a scale of 1-to-5, with a score of 5 showing the most confidence.

Investors, with a confidence level of 4.11, were the most interested in backing cloud computing. Mobile technologies came in next with a confidence level of 4.02. Healthcare IT and services was next with 3.94 and enterprise software showed 3.77.

The survey also showed that global investor confidence in the cloud was up 2% from 2013. It's holding steady for mobile and is up 9% for health care IT and services. Enterprise software is up 2% year-over-year.

Robotics showed one of the biggest increases in global confidence with a 14% increase over 2013.

"Both the cloud and robotics are hot areas right now, so there's lots of opportunity for change there," said Zeus Kerravala, an analyst with ZK Research. "This is great. Typically, innovation comes from start-ups, not the huge IT companies. These smaller, more nimble companies can bring innovative solutions to market. VC investments help drive new ideas."

Kerravala added that significant funding could help robotics companies create less expensive robots that work easily around humans, instead of on a factory floor.

As for the cloud, solid financial backing could help expand the cloud into the mobile arena.

"For the cloud, I think we can expect a broader set of cloud offerings that are really optimized for the mobile world," Kerravala said. "A lot of the cloud offerings today are desktop apps that are made to run on the cloud. To me, cloud apps should be more predictive and have contextual knowledge of who you are, where you are and what you're doing."

This kind of VC investment is good news for the tech sector, said Bobby Franklin, president and CEO of the National Venture Capital Association.

"Continued confidence from global investors in the U.S. is welcome news for American innovators building next generation companies," Franklin said in a statement. "In order to maintain this enthusiasm in U.S. innovation, policymakers in Washington need to come together to enact policies that support the creation of sustainable, high-growth companies that create jobs and drive economic growth."

So what are investors less interested in backing? The survey found that U.S. investors exhibited the least confidence in semiconductors, along with energy and clean technologies.

Copyright © 2014 IDG Communications, Inc.

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