3 min read
Unlocking the growth of scaling tech companies – Tech Nation’s impact on the UK’s tech sector
Since Tech Nation (initially as Tech City UK) was incorporated back in 2014, we are proud to have worked with many of the leading companies in UK tech, including Shazam, Farfetch, Skyscanner, Bulb, Deliveroo, Monzo, Depop, Mixcloud and Darktrace. After all, Tech Nation’s purpose is to fuel the growth of game changing founders, leaders and scaling companies so they can positively transform societies, economies and outcomes.
It’s so exciting to be a key part of UK tech’s scaling journey, and to see the incredible impact our programmes are having. The UK is 3rd in the world for tech unicorns behind only the US and China, with 77 companies valued at over $1bn. A total of 18 unicorns (26% of all UK unicorns ever created since 1990) have been through our programmes, which support the rising stars of UK tech at all stages of their growth journeys.
The UK is already Europe’s tech leader; UK tech investment increased by 44% in 2019, with £10.1bn invested, breaking the all-time record for tech investment in the UK. However, we know that there remains untapped potential across the country to build the tech companies of the future, and at scale. This is a crucial time for the UK, and tech businesses will be absolutely key to our economic recovery. The health of the tech sector has never been more important; providing the jobs we need for the future and contributing millions to the economy.
At Tech Nation, our current mission is to unlock the growth potential of 1,000 scaling tech businesses by 2022, releasing $1bn of value to the UK economy – playing our own role in steering us towards a prosperous and sustainable future. Monitoring our activity and output is all well and good but what difference does it make?
We can only continue to add value if we measure what’s working, and what isn’t working. That’s why Tech Nation and The UK Government’s Department for Digital, Culture, Media and Sports commissioned a report to do exactly that earlier this year. The Tech Nation Impact Report takes a deep dive into our success metrics and Key Performance Indicators, up to March 2020.
The good news is that we have already generated almost $600M for the UK economy.
Tech Nation’s depth and breadth of engagement spans many avenues. We deliver many reports, data insights, events (over 140 events in 2019), and engage with Governments in many ways, including roundtables, government reviews, campaigns, even Sandboxes. However at Tech Nation’s core, given our purpose, are the growth programmes; staying close to ambitious companies who want to grow.
Strength in numbers
The Impact Evaluation concentrates on Tech Nation’s activities since 2014, with a particular focus on two of our flagship growth programmes: Future Fifty, which is for the UK’s leading late-stage tech companies, and Upscale, our programme for fast-growing, mid-stage tech companies.
Over the past six years, a total of 697 companies have taken part in our 26 growth programmes, contributing more than £437m of Gross Value Add (GVA) to the economy. That means we have delivered £16 of value to the UK economy for every £1 investment by the Government.
The report covers from 2014, up to March 2020. A quick overview of the report shows:
- There are more than 500 UK tech companies in our alumni network
- There have been 9 IPOs and 30 M&As thus far
- Our cohorts + alumni companies have collectively raised $20bn over the last 6 years
- We’ve processed more than 2,800 visa applications (now, more than 3100)
- There have been more than 44,000 users of the Digital Business Academy (now more than 55,000)
- We’ve produced 35 reports on UK Tech
- We’ve held more than 500 events
Future Fifty cohorts from 2014 to 2017 led to an economic boost of £11 million to £20 million per cohort. Applying the same methodology to the most recent cohort shows that participation led to an economic boost of up to £60 million. It is both humbling and encouraging to see the positive effect that Future Fifty is having. Applications to join the next Future Fifty cohort are now open.
“Being part of Future Fifty not only provides us with direct benefits, such as peer-learning, but ensures that our experiences help shape the wider scale-up ecosystem.”Rhydian Lewis, CEO, RateSetter, Greater London, Future Fifty 3.0
When it comes to the Upscale programme, the cohort from 2016 generated from £4 million to £7 million. If we apply the methodology to the latest cohort, this figure rises to an economic boost of up to £15 million. It is so important for us to continue to support companies at this stage; the networks formed and mentoring received can be absolutely key to the overall success and longevity of the business, and in the current climate this has become even more vital. Applications to join Upscale are currently open.
“It’s absolutely the bees knees. If you’re a founder, and you’re either in dire straits or doing a perfect lap, you’ll learn so much you didn’t think about. Regardless of sector you’ll benefit.” James Hadley, Immersive Labs, Bristol, Upscale 4.0
There was also an encouraging finding when it came to job creation. Future Fifty, Upscale and Northern/Rising Stars programmes (our competition for early-stage UK tech companies) led to an increase in employment of between 14 and 25 per cent for businesses in the following one to two years after they were supported. Job creation for the tech sector will be critical to the UK’s economic recovery from Covid-19.
“In terms of peer-to-peer learning it’s been phenomenal. From the very first session we had founders sharing their warts and all stories. These are the people who’ve been there and done it. It was incredibly insightful being able to quiz people who’ve scaled businesses to billion dollar exits. But the best thing has been meeting the other businesses in the cohort” Mike Newman, My1Login, Glasgow, Cyber 1.0
We have seen a 175% increase in applications from companies outside London over the past two years, since the introduction of our Entrepreneur Engagement team – 11 colleagues who are based on the ground in every country and region of the UK. As more tech hubs grow and develop across the UK, we’re delighted that we are seeing an increasing amount of tech companies spread across the country. The results can be seen with our latest three programme cohorts: Applied AI 2.0’s cohort has 59% of companies based outside of London, Fintech 3.0 have 55% and Net Zero 1.0 stands at 57%.
“Tech Nation has been one of the most impactful programmes we have attended. All Tech Nation staff, speakers, content quality, communications and venues were top class. It pushed us forward on many fronts” Murat Tunaboylu, Antiverse, Wales, Applied AI 1.0
In many ways, Covid-19 has accelerated transitions that were already taking place, and the same is true for our vision at Tech Nation – we want to build a world in which anyone with the vision and drive can become a game changing leader.
The pandemic has initiated a powerful transition. The move to remote working has meant the breadth of founders we are able to reach on our programmes has markedly increased.
As we continue our work in making the UK the best place in the world to scale a tech business, it’s crucial that we work in the most effective way, with the resources we have. We’ll continue to measure all that we do and to be as transparent as possible, while setting ambitious goals to drive forward the growth of the UK’s tech scaleups.
We look forward to welcoming more cohorts and more companies as we move to generate at least $1Bn of value to the UK economy by March 2022, and much more.