Locally, the Australian Securities Exchange’s new All Technology Index, which was launched in February this year, has recovered from a slump in March when COVID-19 hit and closed the day on Thursday up 2.1 per cent at 2,249.9 points.
Mr Naphtali said COVID-19 had created a tail wind for some of the companies in Rampersand’s portfolio such as delivery startup Sendle and workplace management application Skedulo.
Instead of the expected “Armageddon” for early stage startups at the start of the pandemic, he said there has been a significant rebound in spending for business-to-business companies, with inquiries “through the roof”.
Whether the uptick in inquiries translates to revenue for the technology companies remains to be seen but Mr Naphtali is confident that the usefulness of digital services has been clearly illustrated to the broader market.
“What we’re seeing is that customers have got more time because their businesses have slowed down and they’re using this time to look for efficiencies,” he said. “And this is the greatest forcing function for tech adoption that the world has ever seen because for the first time there’s enough maturity in the software to deliver on the efficiencies it’s always promised.”
Mr Naphtali said with public tech markets experiencing very high volumes investor money was starting to trickle down into private markets.
“It’s money looking for somewhere to go,” he said. “There’s a lag into the early stage sector and so for us who have a bit of a war chest for early-stage investment it’s a great time.”
He added that liquidity was overvalued, which is why there was a discrepancy between the private and public markets but investors were rightly focused on tech.
“There is infinite value to be brought out that doesn’t mean people won’t lose money and back the wrong horses,” he said. “But this is the fundamental shift. COVID-19 has just shone a very bright light on, this is not going to turn around, we’re going to continue to be more reliant on technology, not less.”
Mr Naphtali predicted further adoption of technology both by businesses and consumers and said there was plenty of opportunity.
“It’s a great time to be a founder and a great time to be an early stage investor and I think we are going to see the next wave of big companies getting their funding in the next six to 12 months.”