Financial Technology

Financial Technology

October 31, 2012

Frost & Sullivan Identifies New Investment Opportunities for VC Investors

Convergence, M2M communication and online solutions are creating interesting opportunities for VC investors, according to a recent Frost & Sullivan (News - Alert) study.

Investors are also eyeing the Internet arena due to the limited amounts of funding required by companies in this sector.

On the flip side, investors are increasingly becoming cautious and risk averse about their portfolio investments due to a volatile global economy. This has posed challenges for startups in the ICT industry that require sizeable amounts of funding.

Findings of the report indicate that the automotive industry would be consuming M2M SIM cards worth $66.6 million per year by 2017. Utilities would be consuming M2M SIM cards worth $24.8 million by the same period.

“M2M communication is expected to provide an explosive opportunity for VC investors across different verticals including automotive, utilities, healthcare and security,” said Frost & Sullivan senior research analyst Renganathan K.

Frost & Sullivan also predicts an increased communication between machines due to the availability of broadband and accompanying communication technologies.

The commercially viability of identifying every device uniquely is now possible thanks to the advent of Internet Protocol version 6 (IPv6).

Although the global economic downturn made a negative impact on telecom operators, Tier 1 telecom operators have increased spending in new growth areas.

“While the global economic downturn forces telecom operators and content providers to cut costs and operate efficiently, the accelerating demand for data- based services forces them to boost network capacity and connectivity,” said Renganathan K. “This twin challenge is forcing companies in this segment to cut back on investments in technology infrastructure, including additional equipment.”

Researchers also predict M2M communication to reach 512 million connections by 2020.

Edited by Rachel Ramsey

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