Kane Fulton, July 13, 2020 5 min read
Last year, Tech Nation Talks: Scotland took place under very different conditions at the University of Edinburgh’s Bayes Centre, where we heard about Scotland’s world-class research base, supportive ecosystem and strong international engineering (and developer) talent.
Delegates to our latest online event were welcomed by Mike Jackson, Tech Nation’s Director of Entrepreneur Success, who reminded digital tech companies that we currently have a call out for ambitious FinTech, AI and Net Zero companies. It was followed by a recap of Scotland’s tech sector’s performance provided by our Entrepreneur Engagement Manager for the country, Hazel Gibbens, who also moderated the panel.
According to Tech Nation Report 2020, £200m of venture capital was invested in Scottish companies in 2019. A total of £93m was invested in emerging tech between 2015 and 2019, of which £25m went into AI companies. Leading lights in Scotland’s FinTech and HealthTech sectors include Money Dashboard and Lending Crowd, in addition to Care Sourcer and Current Health, respectively.
Before we proceed, we would like to thank our partners Openreach and Barclays for supporting our Tech Nation Talks events. Both are pivotal in supporting digital businesses through the provision of valuable infrastructure, and in championing the UK tech sector.
Hazel kicked off the panel session by asking our digital tech experts how their companies had coped during the lockdown period.
Edinburgh-based SnapDragon Monitoring develops brand protection tech that combines with an expert analysis team to identify fake products on major online marketplaces. CEO and founder Rachel Jones said it had been an “incredibly tough” period as the company lost half of its income overnight and opted to use the UK Government’s furlough scheme.
“We were in a moral dilemma as people couldn’t afford to pay us to keep fakes at bay yet, if we didn’t, the situation for those businesses was only going to get much worse,” she said. “However, clients came back much faster than we thought they would and we have everybody in the team back now too – which is brilliant.”
SnapDragon was even able to add a new revenue stream during lockdown by lending other companies its expertise and knowledge on identifying dubious supply chains and counterfeit PPE.
Results of our poll conducted with event attendees
Edinburgh’s Pawprint, which we recently featured in a piece highlighting sustainability-focused tech companies, was readying itself for a crowdfund raise before the pandemic hit. The company is gearing up to execute its plan to allow people to measure (and lower) their carbon footprint (called a ‘Pawprint’) and compete against others in challenges through its mobile app.
Founder and CEO Christian Arno said that the company had to do “a bit of soul searching” about the ethics of running a crowdfunding exercise in the current climate – and whether one would succeed.
After receiving a message from an investor, who contributed £10 and said that Pawprint “gave them hope about building a world that’s better equipped to address global threats”, the company was inspired to press on. It met its crowdfunding target in just six hours, raising £352,440 (or 352% of its original target) from 1,172 investors.
At the start of the pandemic, many startups and scaleups ran trials to see if a home working policy would be feasible for their teams. Corporates, on the other hand, were more inclined to enact a full working from home policy from the get-go.
Amy Burnett, Manager at KPMG Private Enterprise, said that the professional services company opted for the latter and immediately began helping its clients and communities access Covid-19-related government support packages. KPMG also began running webinars while emailing a weekly newsletter to its startup and scaleup customers.
“We’ve seen real innovation from our customers who have pivoted, crowdfunded and done phenomenally well tracking ahead of budget,” Amy said. “We’ve seen clients go through four stages of response: ‘reaction’; ‘resilience’; ‘recovery’, and now ‘new reality’, where conversations are changing again.”
Moving beyond Covid, the topic turned to the investment opportunities for digital tech companies based in Scotland. The location is “neither an advantage nor disadvantage” for Pawprint’s Christian, who said that the success of crowdfunded drinks company Brewdog – which was founded on the very North-Eastern tip of Scotland and is now worth $2.2bn – shows that alternative finance is a viable route for companies based there.
SnapDragon’s Rachel said that Scotland’s formerly angel-dominated landscape had improved in the last decade. In seeking a VC with national reach, her company chose Manchester’s Mercia as an investor, which made the initial investment to begin the automation of what was largely a manual process of counterfeit detection and report production.
“When you’re a non-technical female founder in your 50s, it’s a tough place to raise money wherever you are – I’m just in the wrong box for raising money,” Rachel said. “But it doesn’t matter where founders are based so long as they have a good business proposition, a really sound team and people who will buy what you’re trying to sell.”
The topic of investment continued during the closing Q&A session. When asked whether the ability as a founder to pitch remotely is an advantage or not, Amy stressed many VCs and founders have adapted well to virtual pitches; but in some cases, investors would still prefer to meet founding teams in-person to build rapport – especially when potentially investing millions. “Zoom helps, but it won’t always get people over that final hurdle,” she said.
Sharing key learnings, Christian advised bringing high-calibre recruits on board as soon as possible. New recruits who have existing relationships with investors that trust them are even more valuable, he added.
For Rachel, hiring diverse teams is essential for succeeding in business. In each of the three businesses that she has founded, her first hire has been of international origin (British-born Pakistani, American-born African-American, and Chinese), “simply because they were the best people for the job”.
“I haven’t had to think outside the box about diversity – it’s simply common sense and what I want around me to make the world a better place,” she explained. “Ethnicities apart, we have many women over 40 in the technical team who have learnt entirely new skills and work part-time. People’s brains don’t just fall off when they get to a certain age or have additional responsibilities.”
As the panel session drew to a close, it was evident that being based in Scotland is far from a hindrance for its ambitious digital tech founders. They’re pragmatic, optimistic and see opportunity as we enter the “new reality” of tomorrow.
