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London's best small-cap tech stocks

The Analyst: Robin Hardy assesses the attractions of the UK's smaller technology businesses with a market value of around £500mn or less
London's best small-cap tech stocksPublished on December 17, 2024

Investing in technology stocks is generally higher risk (in market speak they have a high ‘beta’), and smaller technology stocks even more so. It can be true that the mightiest oaks grow from smaller companies, but these businesses have smaller operating bases, often less proven intellectual property (IP) and may rely on smaller numbers of customers and/or contracts. So when there is a misstep, the impact will tend to be larger, and with that the hit to the share price. 

Very early-stage businesses tend not to be listed (even on Aim) but can be found within venture capital trusts (VCTs) or private equity/young tech-biased investment trusts (ITs). However, you could also end up here with exposure to stocks, sectors or geographies you do not really want.

One interesting play could be Molten Ventures (GROW), an investment trust that focuses on the cloud and software as a service (SaaS), artificial intelligence (AI)/deeptech (advanced science and engineering such as AI, blockchain, biotechnology, robotics, quantum computing, genomics, nanotechnology and clean energy) digital health and consumer (more traditional business models but using high-tech solutions). 

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