Fixing SIC codes: a new approach to understanding business activity

In an era of rapid technological advancement and business model innovation, founders and investors are still stuck using an antiquated system to classify companies. Standard Industrial Classification (SIC) codes, first introduced in 1948, are showing their age – and it's time for a change.

The problem with living in the past

Out of all SIC codes currently in use, 250 are dedicated to manufacturing, while the entire software industry has just a single code. This imbalance reflects the economic reality of the past, not the digital age we're living through.

Think about it: how can a single classification adequately describe the difference between a B2B fintech startup, a gaming company, and an enterprise software provider? It can't – and this creates real problems for founders trying to connect with the right investors.

Finding your perfect match - why classification matters

For Founders, especially those in innovative sectors, this outdated system makes it unnecessarily difficult to identify and connect with relevant investors. Imagine you're building a sustainability-focused recycling platform – where exactly do you fit in a classification system last refreshed in 2007?

Introducing a modern approach to industry classification

We're tackling this challenge head-on with a new, dynamic classification system that reflects how businesses actually operate today. Our approach uses AI to analyse company websites and automatically assign detailed "theme clusters" that truly represent what a business does.

Instead of forcing companies into rigid categories, we identify multiple relevant themes. A company might be classified under:

• B2B FinTech
• Sustainability
• Payments
• LegalTech

This nuanced approach creates a much richer picture of each business, making it easier for founders to find investors who truly understand their sector.

Real-world impact

This modernisation has practical benefits for everyone in the private market ecosystem:

For Founders, you can finally showcase your business accurately, making it easier to connect with investors who have genuine expertise and interest in your specific sector.

For investors and LPs, understanding exactly what companies do – beyond broad, outdated categories – helps you identify what is really driving returns.

The future of industry classification

We're building toward a future where industry classification works as seamlessly as a modern search engine. Banks will be able to assess sector-specific risks across thousands of clients instantly. Asset managers will gain clear visibility into which innovative sectors are driving returns.

More importantly, we're creating a system that evolves alongside business innovation, ensuring that classification remains relevant no matter what new industries emerge in the coming decades.

The days of trying to fit today's innovative companies into categories first created in the 1940s are coming to an end. It's time for industry classification to catch up with the businesses it's meant to serve.

Scribe is your intelligent co-pilot for private markets. Generate unique insight into private companies and eliminate data entry from PDFs.

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