Last week I spent a day at the GSA Entrepreneurship conference, hosted by Merrill Lynch, in the building that was once Post Office HQ in the city of London, hence the postcode.
On the day, in spite of European fog issues preventing some presenters from attending, we saw pitches from venture capitalists (VCs), technology businesses seeking investment and large semiconductor businesses that routinely strategically invest in smaller companies.
There is a huge volume of investment capital available for the semiconductor industry, but there is certainly no easy way to get shortlisted. I took a lot away from the day, but a few key points in particular.
Courtesy of Jean Schmitt of VC Jolt Capital – “Avoid fashions, IoT is a fashion, don’t waste brainpower at creating vain innovations.” He also illustrated the importance of IP and patents to VCs, and IP is a real value driver. He showed how the 27 countries which make up the Eurozone compare to Japan and the US in their ability to create patents, export technology products and then license patents to other regions.
Not surprisingly, Europe and the US are similarly inventive and ‘export-ive’ but Japanese companies are almost twice as effective at both, when reviewed against GDP. However when it comes to extracting revenue from licensing, again compared to GDP, the US is king, in spite of not being so inventive and Europe is a very poor third, creating only 0.2% of GDP from overseas license and patent revenue. Maybe that’s because we Europeans just create for the local market, or maybe the US is just better at global technology.
Courtesy of ARM, Gemalto and Infineon, I gained a fresh understanding of why a strategic investor exists today in the semiconductor industry, and what they look for when engaging with a company they consider suitable investment material. Knowing this can give useful guidance on how growing technology businesses should emphasise their own proposition – if they are seeking investment of course.
And at the top of the show, Paul Harvey Head of EMEA Technology Investment Banking at Merrill Lynch gave a snapshot of the semiconductor industry against a background of the global economy generally. His summary stated, not surprisingly given the European audience, that automotive is seeing strong growth, we can’t ignore the IoT as 50bn connected devices in five years time is going to happen, and big data is driving semiconductor growth too “a self-perpetuating dynamic” no less! And finally, China’s recent acquisition history, citing NXP and OmniVision and its moves to develop advanced chip manufacturing as being highly significant.
Lastly, the technology to watch. Time Of Flight sensors – those enhanced image sensors that can judge the range to what they image, giving a 3D-type image to let augmented reality and games developers overlay real images both cheaply and efficiently in portable applications. Commercial TOFs, which typically uses IR reflection, also impact robotics, active controls and UIs – so get reading.