New data from Tech Nation reveals that nearly a quarter of UK tech companies are making it to Series C or an exit in 2022, but warns that these large liquidity events must not detract from the need to support the majority (50%) of tech companies who are in earlier stages of growth, especially those R&D intensive firms who tend to have longer product development cycles and time to market.
Nearly quarter of all UK tech companies are reaching Series C or exit
23% of UK tech firms are reaching Series C or exiting; major milestones of success in a tech company’s journey.
In total, 0.4% of the UK’s tech companies have undergone an IPO over the last decade. This equates to 54 IPOs over the last 10 years (with 37 of these taking place in 2021), with companies collectively raising £3.22bn to date.
There have also been a significant number of acquisitions over the same period – over 1,200 in the last 10 years – with companies cumulatively valued at £12.5bn.
Over the last decade, the number of IPOs has increased from 4 in 2013 to 17 in 2021.
15% of IPOs and 13% of acquisitions have taken place in the fintech sector
The majority of these IPOs have taken place for companies in the fintech sector over the last decade; confirming fintech as one of the UK’s strongest tech sectors. In addition, digital security and fintech share the top spot for sector acquisitions over the last decade, at 13% of all acquired companies apiece.
Deliveroo, The Hut Group, and Funding Circle top the charts for IPO volume, collectively raising £1.91bn.
Emerging tech companies need our support
It is encouraging that more tech companies than ever are achieving high-quality liquidity events – particularly in sectors such as fintech and cyber, which are helping contribute to the UK’s status as a global tech and science powerhouse.
However, we cannot ignore that an even greater percentage (50%) of tech companies – particularly those focussing on developing emerging technologies – are not scaling.
If these seed and pre-seed tech firms are to grow into the scaling engines of the UK economy, the supply of capital that sustains their early growth must be prioritised, or the UK runs the risk of stifling future stars of the global tech stage. Across the entire startup ecosystem, renewed emphasis must be placed on access to early stage funding. But this need is especially true for deep tech startups – working on cutting edge technologies like AI and quantum computing, which fuel UK impact tech – and can require longer periods of intensive innovation at the outset of their scaling journey.
If the tech sector is to succeed long-term in boosting the UK economy, employment and solving complex societal and environmental challenges, the tech sector must focus on nurturing these early-stage or slow-growing tech companies across all regions of the UK, and providing them with access to the resources, support, coaching and networking opportunities they need to accelerate their growth.
Tech Nation’s mission is to unlock the full growth potential of these companies primarily through its government-backed growth programmes, regional support networks and its new Growth Platform for tech startup and scaleups’ leadership teams.