A survey conducted by international law firm Bird & Bird reveals that institutional venture capital funds will be the biggest funders of digital businesses between now and 2020, despite reports that the number of VC deals dipped in 2016.

At Bird & Bird and City AM’s second event in the Digital Innovators series, various funders, startups, accelerators and experts in the startup scene came together to find out the latest news from the Digital Innovators Power List, comprising 20 of the most innovative young companies in London.

The event featured a panel discussion followed by a live poll on funding trends and predictions for the future.

Despite the fact that venture capital investment into the UK fintech sector dropped by a third in the past year, the poll showed that more than half of participants (55%) believe that venture capital funding will be the biggest provider of finance for digital businesses over the next three years.

Institutional venture capital investment was followed by corporate venture capital (24%) and crowdfunding (20%). There were no votes for angel investors, which was surprising given the recent rise in this funding method in newer start up markets like India.

The poll also showed that cyber security will get more attention from funders than other sectors in 2017 with 40% of votes, whilst fintech (25%), healthtech (23%), and edtech (10%) complete the top four.

The poll also revealed that most in the market believe startups are better off choosing sector-specific funders (81%) than general funders (19%).

Ali Ramadan, Partner in the International Corporate Group at Bird & Bird who specialises in venture capital said:

“The startups on the Digital Innovators Power list have gone down various routes to secure funding for their next stages of growth.

“I expect institutional VC and CVC funds to continue to heavily invest in startups across all industries. It’s an exciting time for cyber security and fintech startups with an array of funding options open to them. We do see different types of funders collaborating on investments so it’s not always a case of needing to choose one over the other.”