Innovation: Beyond Covid-19

Innovation: Beyond Covid-19

by Mark Selby, 31 March 2020

Innovation Warehouse was conceived in the aftermath of the 2008/9 financial crisis, and in 2020 continues to bring together entrepreneurs and investors.

As we enter the most difficult phase of the Coronavirus emergency, we are focusing much of our energy on scenario planning for the post-crisis business environment, to be in a position to assist viable young technology companies as they emerge from the crisis.

As part of our continued support for the UK tech sector we remain open for business via phone and digital channels, speaking with businesses and investors at both the Seed and Scale-Up stages. We believe that simply waiting for the crisis to be over is not a productive strategy for businesses or investors. In our view, it is important to understand how businesses can mitigate and innovate through the pandemic and the recession that will surely follow, and to understand investors’ evolving strategies as they adjust to these conditions.

Over the past two weeks we’ve held a number of virtual investor sessions, presenting both Seed and Scale-Up businesses and will continue to do so going forward. While our market is adapting to the current situation, with many in the investment community understandably adopting defensive postures, some are prepared to keep the lines of communication open with a view to future investment – and we welcome their participation in our Zoom investment sessions (get in touch for more details).

While we do not condone the predatory behaviour of some investors we’ve seen dramatically altering deal terms to their advantage, a market adjustment to counter the valuation inflation of recent years should be seen as a welcome outcome. In our view, year-on-year valuation inflation has served to make it more difficult for many companies to raise investment, while also eroding investor ROI: a situation that helps neither side in any transaction.

We are also beginning to see a measure of sector re-evaluation, though it may be too early to know if this signals any long-term change in market sentiment – but there appear to be some products and services that no longer seem as relevant today as they might have last year. We will watch how this evolves, and would welcome insights and comment from both sides of the investment fence.

So to all our colleagues, clients and friends, while we understand how personally challenging this crisis is for many people, we are endeavouring to look positively towards the future so we can continue to provide a platform for opportunity and sustainable growth – both now and after COVID-19.

As always, we welcome dialogue with entrepreneurs, investors, and institutions.

Stephen Bloch, Investment