The 2021 coverage of Computer Weekly’s startups is shaped by the long-term but uneven success of the UK startup ecosystem, as well as the partial recovery from the ongoing Covid-19 pandemic.
For example, while many stories touched on record-setting investment in UK tech startups, others showed that this investment was heavily concentrated in a relatively small number of London-based scale application firms.
Despite the long-term growth of the ecosystem – with one tech business being created every 30 minutes – due to the pandemic, the government has been forced to take equity stakes in more than 150 startups.
Other stories focus on specific companies, such as Glitch, which signed a collective agreement with its white-collar workers and strives to achieve the United Nations’ Sustainable Development Goals (SDGs).
1. London gets a quarter of Europe’s tech funding by 2020
Earlier in the year, London-based tech startups in It was announced that they will receive 10.5 billion USD in venture capital (VC) investment by 2020, accounting for a quarter of all European technology funding.
Research by market intelligence firm Dealroom and investment agency London & Partners found that a record $4.3 billion in investment went to London-based financial technology (fintech) companies, with $1.9 billion going to companies building enterprise software technologies – up 82 percent from last year.
The figure dwarfs the capital raised by London companies in 2017 and 2018 – $7 billion and $5.9 billion respectively – and is close to eclipsing the record $10.7 billion raised in 2019.
2. UK ‘impact startups’ raise £2bn by 2021
UK tech startups will raise £2bn by 2021, up from £1.7bn in 2020, to meet one or more of the UN’s Sustainable Development Goals (SDGs).
Investment in these companies, also known as “impact startups,” has increased by 127 percent since 2018, and the UK now has nearly 900 startups and large-scale technologies.
These companies are worth a combined £50 billion and employ more than 35,000 people, with the majority of capital raised going to companies working on clean energy and other climate-related technologies.
Overall, climate technology companies accounted for 65% of the deals signed by impact startups in 2021. Electric car subscription platform ONTO raised £130 million; and waste management and recycling firm Plastics Energy, raised £123m.
Outside of climate tech, a number of UK influencers are looking at how technology can help solve global health problems. BenevolentAI, for example, uses big data and deep learning to find more effective drugs, while Huma enables remote patient monitoring to reduce hospital readmissions in countries including the UK and Germany.
3. Glitch signs a collective bargaining agreement with union workers
Workers at the software startup, Gluch, have signed a collective bargaining agreement with the company through their union, which is the first time such a contract has been signed by white-collar tech workers in the U.S., they said.
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The effort to bring the Gilich workers to the CWA is part of the union’s Campaign to Organize Digital Workers (CODE-CWA), launched in January 2020 to empower workers in the tech industry.
Although the agreement – the legal contract between the union and Gilich – does not include anything about higher wages, which according to a union spokesman is “already generous”, it includes important protections for workers.
4. By 2020, a UK tech business was created every 30 minutes
A new tech business was created every half hour in 2020, with a total of around 19,500 being registered in the UK in March 2021, industry figures revealed.
Data analyzed by industry body TechNation for the Department for Digital, Culture, Media and Sport (DCMS) – based on figures provided by the Office for National Statistics (ONS) and Companies House – recorded 19,465 new businesses in the data and communications sector between January and December 2020.
The increase in the number of tech businesses coincided with a record year for venture capital (VC) investment, with UK-based tech companies raising a total of $15 billion, the largest share of the $43.1 billion raised in Europe in 2020. Most of the capital raised by UK companies ($10.5 billion) went to those in London.
5. A fifth of UK tech investment went to just 10 scale-up companies by 2020.
According to Tech Nation’s seventh annual report, 10 tech industries received 1/5 of all UK venture capital (VC) investment in 2020.
Investment in UK tech sector to hit $15 billion by 2020 That’s up from $200 million in 2019 – but 20% ($3.5 billion) went to just 10 scales, eight of which are based in London.
E-commerce business Gymshark and semiconductor manufacturer Graphcore are based outside the capital in Solihull and Bristol respectively.
Seven of these firms – Octopus Energy, Arrival, Cazoo, Gymshark, infobip, Gousto and Hopin – reached unicorn status by 2020, meaning they are now valued at more than $1 billion each.
6. The UK tech sector has grown tenfold in 10 years.
The UK tech sector has seen a tenfold increase in both venture capital investment and the number of billion-dollar “unicorn” companies (those valued at more than $1 billion) over the past decade. Council and Dealroom.co.
In the year Between 2010 and 2020, investment in the UK technology industry grew from £1.2bn to £11.3bn, with most of the increase coming from £4.1bn invested in 2015.
The number of unicorns has increased tenfold, from eight in 2010 to 81 by the end of 2020. 10 more unicorns are created between 2021 and early May.
Of these unicorns, 32 were fintech companies, 14 focused on enterprise software, and 13 were in health tech — the sectors that have consistently attracted the most capital over the past decade.
7. The British government takes an equity stake in more than 150 startups
British Business Bank data released in September showed that the UK government has taken a stake in 158 high-growth start-ups since its Covid-19 support loans were converted to equity.
Launched in April 2020 by Finance Minister Rishi Sunak to support start-ups and loss-making companies with the investment needed to stay afloat during the pandemic, the Future Fund’s planned investment came in the form of convertible debt notes, giving the UK government an equity stake in the UK. Organization when finances change.
Tech-related companies on the list include Vaccitech plc, which developed a Covid-19 vaccine with the University of Oxford. Century Tech, an education platform that uses artificial intelligence (AI) to personalize children’s learning; gig ticketing app Dice FM; and Ripple Energy, which allows customers to buy shares in wind farms.
Catherine Lewis La Torre, chief executive of the British Business Bank, said the Future Fund investment was critical to continuing to flow into high-growth start-ups, with more than £1bn of revolving loans given to a total of 1,200 companies.
8. UK tech sector on record for another year of investment.
The UK will create around $1bn of “unicorn” tech businesses a week after inking £13.5bn of venture capital (VC) funding in the first six months of the year, making the tech sector another investment record in 2021.
The UK is currently home to 105 unicorns, with 20 reaching unicorn status in the first six months of 2021, including Trackable, Zego and Depop. By comparison, TechNation says it took the UK from 1990 to 2014 to create its first 20 unicorns.
Of these 20 companies, 11 were financial technology (fintech) firms, attracting a total of £4.2bn raised as a sub-sector. After fintech, healthtech attracted the second largest amount (£2.7bn), followed by enterprise software (£1.3bn) and transport (£1.1bn).
The number of future unicorns has also increased, up from 132 companies in May 2021 to 153 in the latest figures.
9. The British government announced the winners of the Safety Tech Challenge Fund
The UK Government has announced the five winners of the Safety Tech Challenge Fund, who will each receive £85,000 to develop new digital tools and applications to help them develop technical proposals to stop the spread of child sexual abuse (CSAM) through encrypted communications.
Launched in September 2021, the challenge fund is designed to advance innovation in AI and other technologies that can scan, detect and flag illegal child abuse images without breaking end-to-end encryption (E2EE).
The funding is being administered by the Department for Digital, Culture, Media and Sport and the Home Office, which will provide additional funding of £130,000 for the strongest projects after five months.
Digital Minister Chris Phillips told Computer Weekly that CSM-scanning is the only natural use of the technology and the government will not allow it to be used for more than that purpose.
10. Tech startups turn to digital PR platforms for media exposure
Early stage tech startups in the UK are using digital public relations (PR) platform Newspage to increase media visibility and secure additional funding.
Conceived during the UK’s first national lockdown, Newspage allows start-ups to create and distribute their own publicity work without the involvement of expensive PR agencies, at the expense of many early stage start-ups.
While Newspage is designed to be used by any small business operating in the UK, the founders are targeting the latest vertical tech startups.
“I’ve worked with a lot of tech startups, people who are starting up and have no money – they come to see PR agencies, it’s £1,000 a day or even £500 a day, but it’s over budget. Until you get an angel investment or VC [venture capital] Supporting them is off the radar,” said co-founder Dominic Hiatt.
He added that the basic concept of News Page is to be a “port” to connect media and news organizations with hard-to-find stories, and for startups themselves, the platform can help them raise money through visibility.
