by Thomas Makey, Investment Director

Following the release of multiple generative artificial intelligence platforms over the past 18 months, 2024 is likely to see the continuing maturation of the technology and truly valuable use cases being uncovered and exploited.

While this is clearly a theme venture capital trusts will be looking to invest behind, I wanted to take the opportunity to highlight some overlooked trends that we believe hold exciting opportunities in 2024 and beyond.

Cybersecurity and defence technology 

The growing adoption of GenAI will lead to more advanced phishing attacks aimed at gaining access to a company’s technology systems, placing even more pressure on information security teams worldwide.

At the same time, the growing geopolitical instability across multiple regions worldwide is forcing all governments to invest more in all forms of defence spending.

These related factors offer opportunities for SMEs, as they can be flexible in creating and providing new solutions.

For example, companies that provide secure defence collaboration and communication services to the UK defence and national security communities can outcompete or partner with larger incumbent providers to enable its customers to benefit from their best-in-class capabilities.

Digital healthcare

Given the position of UK government finances, the state of public sector healthcare provision is unlikely to improve materially without significant changes in efficiency, regardless of who is in power.

Reducing the administrative burden on clinicians to free up more time to spend with patients will be critical if the system is to remain fit for purpose.

This long-term trend has not been adequately addressed, and so at Gresham House Ventures we are concentrating on companies that are driving digital innovation in the healthcare sector.

This includes a digital healthcare platform that offers speech and language therapy to children.

Their work has greatly enhanced the efficiency of therapeutic outcomes and is helping to clear the significant backlog in cases that the NHS are unable to resolve through traditional pathways.

Sustainability technology

Sustainability technology has been an area of focus for a number of years, but in practice ‘sustainability’ has mainly involved cutting carbon emissions, by either measuring, offsetting or removal.

This has been driven by the obvious need to address climate change, as well as the growing regulatory requirements, however in 2024 we anticipate a broadening of focus from purely carbon to a wider set of sustainability impacts.

There are trade-offs from some lower carbon technologies, such as the demand for more rare mineral mining or negative biodiversity impact, which companies are beginning to consider when trying to build credible paths to their carbon reduction goals.

There are businesses that help to address this by providing consumer goods companies with a holistic understanding of their impact at an individual product level, allowing them to see the full spectrum impact of re-engineering supply chains and also addressing the upcoming reporting requirements such as the Taskforce on Nature-related Financial Disclosures (TNFD).

Digital transformation of legacy verticals

GenAI attracts most of the headlines in terms of disrupting legacy business processes, however there are multiple verticals that are still operating with systems and processes that are not fit for purpose to be able to leverage the newest technology.

Despite the growth of software spending in 2023, breaking into the enterprise market has become more challenging for early stage companies.

Procurement and finance departments are seeking to optimise their spend and only invest in solutions that deliver lasting value.

Businesses that can offer essential features that significantly enhance their customers’ efficiency or help them comply with new regulations have a competitive edge in the software-as-a-service market.

A number of our portfolio companies are well positioned to benefit from these trends. For example, an open finance technology platform that provides banks with a leading open application programming interface solution that meets regulatory standards and drives new revenue streams.

Another example is a customs clearance automation technology platform that boosts the efficiency of cross-border trade in a world where free trade is increasingly difficult.

 

Thomas Makey

Thomas Makey is an Investment Director in our investment team. Thomas joined in 2018, as part of the Livingbridge VC acquisition having joined the company in 2015..

 

 

Opinions expressed are Thomas’s own and not necessarily those of Gresham House.