We have a rich heritage of technology investing at August. It’s a high growth sector that has shown resilience through many economic cycles and the current Coronavirus crisis is no exception. Our current technology portfolio demonstrates continued growth in a time of uncertainty and reinforces why technology will continue to be a key pillar of August’s investment strategy as we deploy our fifth fund. This article explores five key technology trends we believe will be here to stay and areas we will passionately continue to back and identify exciting new investment opportunities.
- Flexible working
As like many of you over the past few months, I have spent a significant amount of my time on Microsoft Teams or Zoom. These platforms have been critical for businesses to continue to operate remotely. Whilst you will never be able to replicate that spark you feel in a management meeting or even having a few beers with colleagues, these platforms are here to stay. We will certainly be questioning whether we need to travel hundreds of miles for monthly Board meetings in the future. Air IT, a Managed Service Provider we backed in January this year, is operating right at the coalface and ensuring its customers are well equipped for future ways of working and supporting the increasing transition to the cloud across the SME space.
- Rise in cyber crime
Coinciding with remote working, the cyber security threat has never been more profound and we are seeing more attacks now than ever. Unfortunately, SME’s are often the primary target for cyber criminals as they have typically under invested in this space. Whilst we may be adopting VPNs and dual factor authentication, cyber criminals continue to innovate and there has never been a more important time to invest in protecting yourself and your business. Leveraging our experience from investing in SecureData, we are assisting both Charterhouse and Air IT in helping their respective customers tackle this threat whilst also looking at more investment opportunities in this space.
- Continued focus on compliance
From the stockpiling of toilet roll to improvements in air quality, the Coronavirus pandemic has certainly made us more aware of general quality control, reliable supply chains and a push for a more sustainable world. Making sure our businesses are compliant will continue to be of enormous focus for all of us. Technology can be used to great effect to make compliance more efficient, more understandable and less cumbersome. Our compliance focussed portfolio businesses, Amtivo (British Assessment Bureau) and CODE, are fully embracing technology to support and educate their respective customer and potential customer base through offering free online webinars and online support services. CODE is a good case study of our continued focus on compliance with its recent acquisition of Isopharm, the market-leading online CPD and verifications services business to the dental market. We have a long-standing relationship with the management team at Isopharm and the business has proved considerable resilience through the Covid-impacted period. We are delighted to successfully complete the acquisition and welcome Isopharm into the portfolio.
- Workforce engagement and optimisation
At August we invest in essential service led businesses. Our staff and our employees are what sets our businesses apart. Whilst it will be important as ever to continue to optimise your workforce, perhaps more critically is to ensure they are safe and engaged. Physical and mental health have rightly come to the top of corporate agendas and is an area I know my healthcare colleagues will continue to look at. As Peter Druker once said ‘culture eats strategy for breakfast’ which is why we have thoroughly enjoyed hearing how our leadership teams have utilised technology to drive communication, engagement and entertainment for their staff, from daily all-hands video calls to digital quizzes and virtual drinks!
- Proactive innovation
With many business models being severely impacted by the current crisis we are actively encouraging our businesses to continually innovate and proactively drive digital change. I am involved with Fosters Funerals, a disruptive funeral provider based in Scotland. Despite seeing a reduction in attendance numbers through social distancing, Foster’s introduced live streaming enabling a family in Glasgow to broadcast the funeral of a loved one to family members in Texas! Likewise, at The Dermatology Partnership, we have assisted patients by offering online consultations. This allows them to have an initial assessment and the opportunity to book a follow-on appointment in the future, with flexibility to allow for lockdown extension. These are the sorts of products and services we will continue to support our portfolio companies in developing and believe there will be a significant wave of Digital Transformation activity in the years to come as businesses leverage the power of technology to change the status quo and differentiate.
Our philosophy at August has always been to invest on the back of secular growth trends and support ambitious management teams. This crisis has only reinforced our strategy and these five technology-related trends, that have accelerated as a result of the pandemic, are areas we will be investing in the future. Portfolio company CODE’s recent acquisition of Isopharm is testament to this strategy.