For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.
This is a regularly updated blog that contains the latest updates on the Coronavirus pandemic’s impact on UK and global tech and business, including examples of how tech is supporting the fight against this virus.
I’ve said a few times this will be the most high-tech response to a pandemic in human history so far, with many tech companies rising to the challenge to help save lives, save businesses and join communities.
Update 03/04/2020 – Loan reforms may need to go even further
Loan reforms may need to go even further
Overnight, the Government has taken further action to support firms affected by the coronavirus crisis.
The main change seems to be that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible. Lenders will also be stopped from requesting personal guarantees if the loan in question is below £250,000.
The changes will mean more businesses can access this scheme and whilst that is welcome, it does not appear at first glance to address the issues we have been hearing from early stage, pre profit tech businesses, that lack the trading history for banks to consider them viable propositions. As you might expect, there are a number of meetings today in which we will raise these issues with the British Business Bank to understand the current situation.
It is important to remember that for many companies, now is not the time to panic. They will have enough runway to see out enough time for the virus to pass, at its current trajectory. Hopefully, many will also have wise enough Venture Capital to ensure, whilst bootstrapping, the businesses get through the tougher months.
For others, that runway is shorter and I can understand the frustration in not currently knowing where to turn. Yesterday’s Beauhurst data release showed the stark reality of the investment figures in the sector. The known deals in March totalled £595m, compared to £1.46 billion a year earlier.
The Coronavirus Business Interruption Loan Scheme is a good, speedy product for a big demographic of businesses in dire need. Nevertheless, it is an avenue where the eligibility criteria will mean that a significant proportion of the early-stage sector will fail. Startups and early stage scaleups aren’t built to be profitable immediately, but to reinvest and reinvest as they hope to continue to scale.
In conversations with businesses, our programme leads are bringing back a wide range of situations. However, nearly all businesses we speak to would welcome some kind of cash injection, whether that is simply to bootstrap the company until the crisis is over or for others to actually invest further in their product ready for an improving market. However that money is spent, I recognise the importance of remaining competitive with rivals, both domestic and overseas.
I also appreciate its not just finance but cash flow as well. I am hopeful that we will see some further movement on business rates and perhaps some work on speeding up the R&D system over the coming days.
I don’t believe the Government is ignoring this but an intervention is hard to target correctly. At Tech Nation, as with the wider tech sector, we continue to gather evidence and provide statistics, case studies and analysis to inform policy makers of the needs of the tech community. You are not alone in your fight.
Update 01/04/2020 – Could the crisis overcome our big data fears?
You may have seen some of the announcements last month by some of the household names of US tech cracking down on misinformation around the Coronavirus.
In truth, a lot of this has been developing slowly over time. Misinformation – whether accidental or ill-informed – sits alongside and often overlaps with disinformation, the deliberate pumping out of advice intended to deceive or confuse the reader. At the innocuous end of this scale would be your typical April Fools’ joke. At the other end is content that can be incredibly harmful. From purported Russian influence in election campaigns to more recent attempts to crack down on stories around anti-vaccinations, the internet is awash with these kinds of fiction. However, COVID-19 is the first significant issue with global reach to bring it into our collective consciousness.
For its part, the UK Government set up this week a new unit to tackle misinformation about this virus. The ‘rapid response unit’ will operate between Number 10 and the Cabinet Office, seeking out and challenging a range of distorting narratives online, whether deliberate or not.
Capturing less media attention but instrumental behind the scenes, many UK companies are playing an increasingly influential role in this online war.
Serelay, based in Oxford, allows users to capture videos and photos that are inherently and immediately verifiable, meaning they can be used by third parties in the knowledge that they are authentic. Verifying an image as it is taken protects against some of the doctoring that can occur at a later date, a sort of digital fingerprint. Serelay says it can detect an edit of a single pixel.
Wordnerds, a SaaS business from Gateshead specialises in AI and linguistics to provide businesses with accurate and insightful feedback on their services. In the current crisis they are already listening for COVID-related stories on behalf of customers.
Astroscreen, a London-based company, also uses AI to seek out fake accounts online. Its founder, Ali Tehrani, is open that one of the ways the company does this is through targeting usernames, which are often generated at pace and at scale, meaning they follow certain patterns to create so many different mantles. Last year, the company was responsible for unearthing more than 2,500 fake accounts as part of a disinformation campaign in Hong Kong to discredit protestors.
Whilst it is beholden on all of us to be cautious about what we read and choose to believe, it comes as reassurance to me that British tech is sitting underneath the efforts to combat the widespread dissemination of misinformation.
It is certainly good for the UK tech sector; AI was one of the key areas to have benefitted from sustained and record investment into UK tech in 2019. With lending and venture capital currently under intense scrutiny, it seems a different age that the UK was pulling in more than £10bn of investment into its tech companies. But that’s exactly what we achieved in 2019. In the first six months of 2019, AI funding had already surpassed the total invested in the sector in 2018. And by the end of last year it had reaped over £2.4bn, more than double the previous year.
You may not always see their names in the headlines, but British AI is underpinning global efforts in this important battle.
Find Coronavirus-related business support and resources on our Coronavirus Information Hub.
Data – it’s availability, aggregation and applicability for delivering solutions – is at the heart of efforts by Government to understand the spread and maintain control over the Coronavirus.
First and foremost, healthcare data is essential and I’ve previously highlighted some of the UK companies involved in using AI to support work in this field. A few days ago, NHSX – the unit within the health service tasked with its digital transformation – published a blog outlining the power of data in a pandemic, and their plans to work with Google, Microsoft, Palantir and AWS as well as Upscale 3.0 alumni Faculty, to deliver a data platform for the NHS. It’s a fascinating read about the temporary aggregation of disparate forms of data which are harmonised and then used by the private sector to match scope (how fast the disease is spreading and where) to interventions, from availability of ventilators to sickness absence in hospitals.
Matthew Gould, who heads up NHSX and previously the digital directorate at DCMS, is a great advocate of the role of tech in tackling public policy problems. His team is well aware of the importance of data in this crisis and the need for an authoritative, responsible and secure repository body to own it. The intention is to open up as much data as possible over time – both to support public understanding but also tech solutions. If deployed successfully, this could be the new benchmark or tech driven solutions to other public policies in the years ahead.
Data is also invaluable to Government in understanding the impacts of COVID-19 on society. The retail headlines today are about grocery sales at record levels and removal of restrictions on some products. But for more nuance I would cite this less obvious use of data that gives insight. Future Fifty 7.0 company Starling Bank have seen grocery shopping payments moving to delivery over time whilst panic buying is reducing. It would seem we are getting more accustomed to the new normal.
Equally important is studying whether the social distancing message is getting through. It may appear a little illiberal for Government to get this data, but it’s anonymised and no different from the processes that help your satnav to predict the quickest route home.
Across the board, the pandemic we are experiencing is as good a call to arms for opening up more data as we can have.
I wanted to end this blog today by directing you to the results of a survey about how the Coronavirus is impacting tech companies. You can read a separate blog on some of the headlines for that survey – thank you to all those that took part.
Finally, we have also updated the COVID-19 information hub page – pulling together an extensive hub of business support and information for the tech industry, to help you get through these challenging times, including links to further Hubs by tech.uk, Scaleup Institute, Enterprise Nation, British Business Bank..
New Gov links which have showed up in the last 24 hours:
New Welsh Gov support in the form of a £500m economic resilience fund.
UK government support has also been updated.
You can see all the main links and information in the Coronavirus Information Hub.
Every revolution that has come and gone – from the steam engines of the first to the streaming engines of the fourth – has elicited fear of what it might create. But the truth is that each of these industrial revolutions has changed our lives in ways for the better that, only years earlier, could not have been conceived. Innovation moves ever faster than law so it’s natural that regulators chase the curve. But net, technology has always driven improvements to society.
People often talk about the importance of institutional memory – spending time in a business to truly understand its purpose by knowing its history. Well, I think there’s an equally compelling case for the importance of industrial memory. We think of tech companies and their founders as revolutionaries, and of course they are. But as importantly, they are also evolutionists. Because without the trailblazers of the past we wouldn’t have the pioneers of the future. Without Alexander Graham-Bell, no Tim Berners Lee. Without Ada Lovelace, no Alan Turing. With no Alan Turing, no Demis Hassabis.
So whilst UK entrepreneurs have been at the forefront of almost every iterative stage of technology, they are always standing on the shoulders of giants past. As healthtech companies help us to diagnose this virus, AI helps us to treat it, remote working helps us to stay business focussed and Deliveroo pivots to deliver medicine as well as Mexican, now more than ever the pioneers of the past must be remembered for the initial – and in some cases colossal – first steps that they took.
And so, there are some positives that come out of this horrendous situation. One of those is the wide realisation that technology is for purpose, as well as profit. It always has been.
Update 27/03/2020 – Managing exponential growth during a crisis
I’ve been inspired by the collaborative innovation that is happening across the UK and across the world. Borders have shut but ideas and new communication channels have opened. Our team has written a blog showcasing some of the open source innovation work going on to tackle the virus. Our Coronavirus information hub contains other ways companies can get involved and continues to be updated daily.
I know that businesses are struggling. Many are in touch with me directly as customers and capital start to drop off. Those reading this blog in the past few days have seen me highlight some of the problems we are hearing from across the country and some of the potential solutions. We’re grateful to those that have responded to us via surveys, seminars or one-to-one conversations in providing those. We understand the pressures you’re facing.
Today though I wanted to end on a more optimistic note. Because there are a number of tech companies at the other end of this spectrum – businesses that are experiencing unprecedented, massive and immediate increases in their customer base. That creates its own pressures.
And how those are managed is crucial – it can make or break a businesses proposition or customer base. Ocado is a hugely successful company and couldn’t have predicted the incoming tsunami of new customers at such a high rate. I have seen comments about them explode on twitter but management agility is beginning to turn this round and I understand they have started to roll out a new way of working, allotting random groups with stated times to access, put together and order their essentials on the online shop.
Companies like Halo are experiencing a similar kind of pressure. As groups around the UK self-organise to support the most vulnerable, Whatsapp groups have sprung up everywhere and carry some risk. When local MutualAid groups make their links to join public, they risk exposing both phone number and approximate location of volunteers. Many are instead picking Halo’s messenger as a safer way to set up community groups for streets and borough-wide topics to help the most vulnerable. They’ve seen a 100% growth on engagement rates this month and are nearly covering every street in some areas of London. You can find out more here. The founders have a track record in building networks capable of scaling rapidly into the millions.
There was also an extremely insightful twitter threat from Slack CEO Stewart Butterfield, who has charted how Slack is coping with massive demand. Virus-enforced remote learning has seen companies investing heavily and at short notice in this popular, instant messenger platform, accelerating a seven year plan into months.
Stewart is very clear that organisational agility is the key business advantage in a global world that can change so fundamentally and so quickly. The businesses that can best survive and in some cases thrive in current conditions are those whose teams can pivot quickly to new ways of working that fit with the changing environment.
Update 26/03/2020 – Government interventions yet to plug the early – stage business gap
The Chancellor has now announced a further intervention to support the self-employed.
Seeking to be as equitable as possible, he has pitched the levels around the furloughed worker scheme, with the same 80% cap up to £2500. Due to the complexity, he said he expected the scheme to be accessible by June.
Whilst clearly plugging a sizeable gap in the policies announced to date – the freelancer community play a key part of the tech ecosystem – I expect louder noise from those sections of the business community that are still not covered.
I highlighted one of these yesterday – the option for Government-backed or direct investment into pre-profit firms through convertible loan notes. That would help meet the needs of many fledgling businesses that are showing great promise to be major employers in the future. Interestingly, this morning’s papers picked up on the asks of some lenders under the new Coronavirus Business Interruption Loan Scheme (CBILS) for personal guarantees.
Perhaps this shouldn’t be a surprise – the CBILS scheme increases the proportion of Government-backed debt to 80%, from the 75% that was backed under the Enterprise Finance Guarantee scheme. That 5% increase might move the dial for some but probably not many – 20% if unsecured lending still represents a risk for major lenders.
I’m interested in how the British Business Bank can work with the UK’s great fintechs such as Funding Circle, LendInvest and OakNorth to get them registered more quickly for funding schemes like this. I know some are in the queuing process. The appetite and institutional safety should now be there and UK is genuinely leading the world in fintech solutions.
We shouldn’t bash the banks on this – they are showing the natural reservations from the traditional system and this loan scheme will work for large sections of the economy, but it’s becoming increasingly clear that it can’t work for an important part of the tech sector. We can and should throw our efforts behind newer lenders, unencumbered by the same difficulties, who might willingly step into the void.
Update 25/03/2020 – Young tech businesses need targeted support
The Government response to the Coronavirus has escalated quickly, with their two main packages supporting cashflow and staff now live.
Speaking to founders across the tech sector from early-stage scaleups to some of the UK’s most established tech companies, from Belfast to Brighton, it’s clear that to a large extent the interventions are welcomed and hitting the mark. Nearly 3 in 5 businesses we surveyed were planning to access either the Coronavirus Business Interruption Loan scheme (CBILS), the Coronavirus Job Retention scheme or both. Their calls were for speed, simplicity and widened eligibility.
There are gaps that remain. An obvious one is the self-employed with the Treasury purportedly finalising a package tomorrow. Another are pre-profit startups. Our data threw up the fact that startups and early-stage scaleups, often pre-profit, were the segment of the tech business community least likely to access either – in fact this applied to 4 out of every 5. Some of this can be explained through a perception lag due to historic efforts to galvanise lenders to lend to this distinct group. The British Business Bank does expect some unsecured loans of up to £250k to be available for earlier stage non-profitable scaleups although these are subject to the risk appetite of individual lending providers.
But there is clearly a major issue that is yet to be resolved for many young businesses who have limited, if any, collateral against which to loan and are still months or years away from delivering profits. Many growing businesses have founders who will be individually liable for debt and, if they’ve recently raised VC investment, may require permission to access – or even be entirely precluded from accessing – debt. As a result, it’s increasingly clear that a large number of the scaling tech companies we support will not be able to access the loans offer through the British Business Bank.
The good news is there are a number of policy proposals floating round that could address this. The solutions are coalescing around Government-backed investment directly in these firms either through a traditional equity investment or Convertible Loan notes. Such a scheme would be an investment by the government rather than a grant where there are zero returns to the public coffers.
Our survey showed little regional disparity on the problem here, so identifying the right tech companies in the regions will be key to any new policy intervention. Tech Nation’s national network has identified 2,400 companies right across the UK that may require short-term cash flow support, runway extension, in these challenging times. With our 11 regional Entrepreneur Engagement Managers we are well placed to identify those companies in need and direct them to the solution.
It is clear that for startups at least, more specific support must be provided if we want to fuel this fast-growth and high-value sector of the UK economy.
For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.
Update 24/03/2020 – Survey initial results show how Government support is needed
I wanted to share the results of a snapshot survey last week of one hundred founders of the Tech Nation alumni (click here to take out follow up survey). The survey, taken after the £330 billion Government injection into support but prior to the employment support package. It showed that cashflow and ways to create it were unsurprisingly the number one priority for tech businesses, with 9 in 10 businesses reporting this as their focus.
The key asks were for speed, simplicity and eligibility which well-intentioned – and for the large part well-executed – Government schemes of the past have not always met.
We have been staying close to the briefings of the new schemes launched to mitigate the financial impact of the virus. Indications are that the British Business Banks’ Coronavirus Business Interruption Loan Scheme, which went live yesterday, will both accredit lenders faster (there are 40 approved through the scheme as it launches today with more coming through an expedited process) and encourage a quicker lending process. They’ve also confirmed that 100% unsecured loans of up to £250,000 will be available, though not universally through all the lenders, preferring to allow individual lenders to show discretion on a case by case basis.
Of course, government support is just one part of the cashflow jigsaw. Many founders report that VC funding is stalling and some deals are falling through completely. Tech Nation is looking to address some of the worries caused by this crisis through a series of online seminars with our founders – last week we held two such meetings on fund raising and one on remote staff working during a crisis and further such seminars will be made available over the coming weeks.
An updated survey is now live, seeking to capture a little more detail by business size, stage and location. Please do take it by visiting this link. Every response helps the industry’s efforts to highlight to Government what is and what is not working, at a time when we need to ensure we make any necessary changes quickly. Your responses will directly impact the support available.
It’s times like these that adaptable leadership comes into its own. Everything we teach in our cohorts is aimed to improve management and leadership skills, which we know are crucial for tech companies to be globally competitive. Adaptability and creating the company culture to embrace that are the key skills for scaling companies.
Update: 23/03/2020 – Eligibility of ‘viable’ businesses will be key to loan success
From today, many businesses are able to access government support as a range of financial products go live. Please see our updated government links below on how to find details on the Coronavirus Business Interruption Loan Scheme (for SMEs) and the Covid Corporate Financing Facility (for larger corporates). A new BEIS website has also been set up to bring this all into one place. You can visit that here and a separate section that includes additional help from non-government organisations here.
We’re aware that speed and eligibility are the key questions many tech businesses have. On a call with the British Business Bank today our team was able to confirm that 100% unsecured loans of up to £250,000 will be available, though it will be up to individual lenders (there are 40 approved through the scheme with more coming) to show discretion on an individual case basis, taking a view that it was a viable business prior to the crisis. The loans can be obtained in addition to any EIS or SEIS scheme that a business has taken part in which is a useful addition.
On speed, the BBB is aiming for a swifter, smoother process but as a new product, there will be some teething problems.
Of course, I know too well the unique circumstances of many pre-profit tech start ups. We welcome any experiences you may wish to share over the coming days in ease or otherwise of accessing this funding and we continue to survey the sector for views on what further products might be needed. You can take that survey here.
Whilst we are awaiting whether there will be more intervention for the self employed, Covid Credit has been set up (as a proof of concept) helping self-employed workers to demonstrate their loss of income from Covid-19 to HMRC.
With self-isolation increasing healthtech companies are coming more into the public eye. Babylon Health, one of the latest cohort of our Future Fifty programme, is rolling out a symptom checker for coronavirus. BenevolentAI, also a 2020 Future Fifty 8.0 member, is busy using AI to crunch vast amounts of public data to see if existing drug combinations could provide any interim help to patients ahead of the development of a vaccine.
Other companies will also be actively considering how they can pivot their services to support the fight. As a few examples, Amplyfi (Upscale 5.0) mix AI with data capabilities to help scan the deep web for insights, Crisp (Future Fifty 8.0) is a cutting edge Social Media safety and crisis monitoring firm, that can help identify, understand and inform early interventions on growing societal issues. Thriva (Upscale 4.0) could help with health monitoring from home. CausaLens (Applied AI 1.0), an AI-powered prediction engine could help with staff and bed allocation during a time when the NHS will be under pressure like never before.
NHSX has sought to catalyse this area of tech further today in a new partnership with PUBLIC, called Techforce 19. They will award funding of up to £25,000 for a test phase (and potentially deployment) of a project that supports the elderly, vulnerable and self-isolating. Applications close 31st March.
As ever, any support you can offer please use the links in the government support section further down this blog.
Update: 20/03/2020 – Tech Nation is taking its programmes online
The Chancellor has just finished outlining additional measures the Government is taking to support employment during the months ahead. We recognise that speed is of the essence in getting this money out so we recommend you take a look at the new proposals, which are summarised below, to understand how they can support your specific situation.
We have also updated a survey questionnaire to take account of these. Please take it and give us feedback on how the crisis is impacting you, including how and whether the Government measures are helping mitigate the effects. This data from our tech community is invaluable and it will be used to give feedback to the Government on their announced interventions and to inform any future ones.
Amidst many of the difficult stories you have shared with me, I have received countless examples of how tech is stepping up across the country. I’ll release a specific blog on this over the weekend but please do keep these initiatives coming.
For our part, Tech Nation has successfully run the first three online digital events covering remote staff management and fund raising during crisis periods. We will continue to grow such opportunities for our networks over the coming weeks. If you are in the middle of a fund raise, we have also put this blog together, following one of those webinar sessions with over 100 founders and CEOs yesterday, who are doing precisely that. Hope it’s useful.
As ever, please email email@example.com if you have any questions.
The Government continues to keep options open for further measures to stem the spread of the virus, following yesterday’s announcement that schools would be shut down for all children bar some important exceptions.
We are awaiting final details on the various finance schemes from the Government and as soon as we have them we will share on this blog. For now, the Treasury has given a few more details around some of the initiatives, which can be found here. And Hambro Perks also have a useful write up of the Coronavirus Business Interruption Loan Scheme.
In the face of a dramatic shift in how we will lead our lives, the reliance on tech for education, health, nutrition and support are becoming ever more important. As a company we too are shifting much of our work online over the coming months and will seek to provide our networks with topical and useful information from our founders.
Update: 18/03/20 – The most high tech response to a pandemic in human history
Covid-19 is fast shaping up to be the challenge that defines us personally and professionally. We will confront this virus with the most high-tech response to a pandemic in human history. The tech industry like many others is facing huge challenges, but it also has a huge part to play in the fight against a once-in-a-century pandemic. Tech has the opportunity to help find rapid solutions to those challenges right in front of us, manage us through some trying times, and contribute to rebuilding an economy on the other side.
Like many organisations, we have specific challenges posed to us. But, just as we coach the businesses that go through our programmes, we are adapting what we do over the coming months to support you.
This will be a regularly updated blog that contains the latest advice from the Government to the sector, including details of the support they are offering to different industries, as well as being a constant source of innovation and inspiration about how tech is supporting the fight against this virus.
And we will pivot to offer advice on how to lead your business through this uncertain time, with regular webinars on a number of mission critical subjects.
As we all seek to isolate or distance ourselves physically from one another, let us digitally connect more closely than ever. We are all clear that there are significant challenges in healthcare, education, sustainability and perhaps even democracy in the months ahead. But across the piece, UK scaleup tech companies will be able to offer radical solutions in extraordinary times. Over the coming months, technological involvement in keeping services going, keeping businesses afloat and keeping people alive will be essential, impactful and exponential.
If you have a story you want us to feature, or need information that we currently don’t include, then please get in touch with us to let us know. Email us as firstname.lastname@example.org.
For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.