Tech entrepreneurs are fleeing from social networks and advertising revenue streams and moving into business applications, according to Seedcamp, the start-up investor that holds its annual event in London later this month.
Seedcamp – which was founded by Index Ventures’ Saul Klein and Reshma Sohoni, formerly of 3i – has seen advertising-based business models drop from 30 per cent to 10 per cent of the 1,500 entries to its Pop Idol-style investment contest since 2007.
By contrast, marketplaces that take a fee or percentage of transactions have risen by more than 60 per cent in the last three years, while “freemium” businesses have more than doubled. Productivity and business applications have increased 90 per cent while online games have “skyrocketed”, said Ms Sohoni. Read more