A New Approach to Technology Valuation

A Solution to Technology Valuation Problems

OxValue.AI aims to break the wall of technology valuation, unblock the bottleneck of technology transfer by creating a groundbreaking theoretical framework and a novel methodological method of technology valuation based on bigdata, econometric and machine learning techniques. An ML algorithm that is derived from the research can estimate the monetary value of a patented invention or a startup. OxValue.AI breaks the wall by, firstly, making a valuable first attempt to develop a theory for the valuation of technology. Secondly, creating a “game changing” technology valuation method that will bring disruptive change in technology valuation, making it objective, accessible & affordable, reduces information asymmetry between investors and inventors, significantly promote investment into innovation and facilitate technology transfer, and help startups to survive the Death Valley.

Technology valuation is difficult, especially for startups, preventing their innovation financing and technology transfer. This is because existing valuation methods rely on past financial data in the current economic prediction framework and most of startups, let alone innovation teams, have no (sufficient) historical data.

Our Novel Approach to Valuation

We are motivated by the desire to promote innovation while also providing a useful tool that can be used in practise as a benchmark reference. Prof. Xiaolan Fu’s research project at the University of Oxford began in 2015 with the goal of providing a comprehensive, affordable and accurate valuation service, which combines a new conceptual framework and a new methodology for the valuation of technology, especially for startups and innovation teams that have patented technologies.

We are the first in the world that proposes that the monetary value of an early-stage technology is a function of its novelty, market size, the presence of complementary technologies, potential risks in its development, and the characteristics of the team that builds and commercialises it. Our algorithm is not only reliant on past financial data, which can be difficult to obtain for startups. Moreover, our indicators can also capture future market and technological risks in terms of the characteristics of innovators and complementary technologies with low cost, which cannot be reflected by financial data directly. We also use big data, econometrics and machine learning techniques for the empirical estimation and model validation. Our algorithm shows its high predictive power by testing in the dataset that includes all 3,719 UK startups with over 5 million patents.

Our research team has also achieved academic recognition as reflected by the prestigious awards that it has received, for example, the 2021 Falling Walls Scientific Breakthrough award, and the 2017 European Association of Management Research annual conference Best Paper Award for Innovation SIG.

A Promising Future

The project also scales its economic and social impact through a social enterprise, OxValue.AI. The launch of OxValue.AI in May 2021 has attracted more than 13,000 viewers on the day online. This spinout company of the University of Oxford was formally established in March 2022. We have been approached by a large number of multinational firms, ranging from the world’s top 500 to startups, investors to technology holders, all of whom want to know how to value and invest in technology. We have partnered with IP management firms, innovation consulting firms, exchanges, and technology transfer platforms, among others to provide valuation services in different industries.

OxValue.AI is a promising tool for addressing bottlenecks in innovation and economic growth. We are especially eager to help developing countries, SMEs, and researchers who are faced with the negative repercussions of inaccurate technology valuation.

Photo credit: Lina Kivaka via Pexels