Technology Update: Trends in the Technology Sector: A View from San Francisco
24 October 2017
Our proximity to our technology clients allows us to be more receptive and reactive to their needs. More importantly, by working in the dynamic tech scene that forms the core of Silicon Valley, we are better placed to understand the avenues for growth as well as the myriad of pressures facing our clients. We have identified a number of the current trends.
The decline of funding
According to the Venture Monitor report released in early 2017 by PitchBook Data and the National Venture Capital Association, fewer Silicon Valley start-ups obtained venture capital funding in the first quarter of 2017, compared to the quarter before. Meanwhile, larger tech companies with some of the largest private valuations are continuing to hold off on making IPOs. Investors appear to be more scrutinising and demanding of potential investment targets. This cautiousness has had a palpable effect on the formerly free-wheeling culture.
The rise of FinTech
More start-ups are focusing their sights on disrupting the financial technology sector. Recognising the increasingly digital and global nature of transactions, and the difficulties associated with moving currencies across borders, several companies are now providing banking consumers with cheaper and more efficient options of banking and investing. However, the sentiment in Silicon Valley is that the web of banking regulations, both in the United States and in the EU, is continuing to hamper major efforts at technological and systematic reform.
In response to this trend, we have established a dedicated FinTech team to help our clients navigate this rapidly developing space.
Bracing for GDPR
The previously niche area of European data protection law has somehow become a topic of conversation. Tech companies, large and small, public and private, are bracing themselves for the GDPR, which is set to take effect on 25 May 2018. Companies not previously subject to the extraterritorial jurisdiction of EU data protection law will find themselves required to comply with complex new rules regarding the personal data they collect and use. As a result, more companies are taking stock of the ways in which they can creatively leverage data while acting in accordance with Europe’s tough new rules.
Although Silicon Valley continues to be the driver of major technological change, emerging companies, as well as those further along in the company lifecycle, must continue to adapt to changing financial, regulatory and consumer landscapes. We will continue to monitor these trends and provide you with our view from San Francisco.
For more information on these trends and how they might potentially affect your business, contact a member of our Technology team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.