2020 in review: UK tech sector shows growth and resilience
While 2020 has been a year of both personal and economic hardship, the UK techsector has demonstrated its resilience through continued job creation andinvestment deals.In fact, data for the last year shows that the tech sector is making positivesteps towards recovery from the impact of Covid-19, with job vacanciesclimbing 50% since the year’s lowest point in July. Since then, jobopportunities have increased at a rate of 2.6% a month, reaching 75,353 openjob advertisements in November.Digital Secretary Oliver Dowden said: “It’s fantastic to see the UK’s techcompanies flourishing, despite all the challenges of 2020. The thousands ofhigh skilled jobs they are creating will be a crucial part of our economicrecovery and the government is committed to supporting the tech sector throughan unashamedly pro-tech approach.”According to new data compiled for Tech Nation and the Government’s DigitalEconomy Council, 10% of all current UK job vacancies are for tech jobs,beating the benchmark from the Office for National Statistics that 9% of theUK workforce are already employed in the digital tech sector. Not only doesthis represent the increasing importance of tech to the economic health of thecountry but also highlights the extent to which the digital tech sector isproviding jobs at a critical time for the UK population.
This digital tech boom of 2020 is creating jobs with good salaries andprospects across the whole of the UK. Whilst London makes up nearly one-fifthof all tech vacancies, the South East comes second with 15,038 opportunitiesand North West England has over 7,000 available jobs. This year, Manchestercemented its reputation as the fastest-growing tech city in Europe, in partdue to the successful IPO of e-commerce giant The Hut Group.The UK’s regional tech clusters have also seen sharply higher levels ofventure capital investment in 2020. Four cities – Oxford, Cambridge, Bristoland Newcastle – achieved more VC investment than last year. Oxford has alsoovertaken Cambridge to rank second for tech investment by city in the UK.Oxford’s startups and scaleups raised $479.6m in investment this year, thanksto interest in the city’s dynamic health-related companies including OxfordNanopore which raised $84.4m in October.“The success of our regional tech hubs is something to celebrate, as is theindustry’s resilience by offering high-levels of employment opportunitiesacross a variety of disciplines,” said Digital Minister Caroline Dinenage.“Over the upcoming months, we will work closely with the sector to supporttech firms and ensure this momentum can be maintained.”
Investor confidence remains high
The venture capital investment that UK tech companies have attracted this yearshould be seen as a vote of confidence in the UK’s fast-scaling innovativebusinesses. The UK continues to outperform every other country in Europe forVC investment, as it has done for the past 10 years. In 2020 UK companiesraised $15bn+, exceeding last year’s record total of $14.8bn, according toDealroom. This investment figure is more than Germany and France combined($14.5bn).It was boosted by a series of mega-rounds raised by companies includingfintech Revolut and digital insurance provider Ki, which both secured $500m infunding.Gerard Grech, chief executive, Tech Nation, said:> “The UK’s tech businesses have faced one of the biggest upheavals in a> century, and still pulled in more than $15bn. At Tech Nation we have been> delighted to continue supporting these incredible businesses and are on> track to support over 1000 tech scale-ups by March 2022, delivering over> $1bn of Gross Value Add to the UK economy.”
2021: a new wave of entrepreneurship
Looking ahead to 2021, the prospects for the UK’s startups and scaleups looksstrong. The last financial crisis catalysed an entrepreneurship wave in the UKwith the launch of TransferWise, Farfetch and Zoopla – and the ongoingcommitment to VC investments throughout lockdown is set to catalyse a similarresponse following coronavirus.Charlotte Bax, Captur founder explained: “The coronavirus pandemic has causedmajor shifts in the way we live and work. It’s the perfect opportunity forentrepreneurs to rip up the rule book and use tech to rethink how we can makeour post-coronavirus world more inclusive.> “Open-access technology is the key to building trust and this will be> central to rebuilding the UK in 2021.”There are 100 UK tech unicorns, a third are fintechAlternative LendingDigital BankingSavings and InvestmentOf the private companies that have achieved a valuation at $1bn or more, morethan one in three are fintech firms.Image source: Photo by mark glancy from PexelsThe UK joined the US and China as the only nations to have more than 100privately held companies that have achieved ‘ unicorn’ status by being valuedat more than $1bn, according to new data from Dealroom and Tech Nation.Of these 100 firms, just over a third – 34 – are fintech companies.Tractable, an AI startup building computer vision tools, was the 100th firmwhen it raised a $60m Series D round last week.Number of tech unicorns in the UK, France and Germany (2000-2021)Source: Dealroom.comSo far in 2021, 13 UK tech unicorns have already been created, compared to 7in the whole of 2020.Collectively, the UK’s 100 tech unicorns have raised almost $32bn (€28.9bn) inVC investmentThese high levels of tech unicorn creation reflect the continued strength ofthe UK tech sector, which reached record highs in the first half of this year.UK tech startups have raised €13.2bn ($14.5bn) since the start of the year,beating the previous record of €8.1B ($8.9bn) (H2 2020), with two weeks stillleft to go.VC investment in UK tech companies by stage of investment (2011-2021)Source: Dealroom.comGerard Grech, Chief Executive, Tech Nation, said: “With UK tech unicorncreation growing by 127 per cent over the last 3 years, it’s clear that the UKtech sector has become a rapidly growing hub for unicorns, culminating in 100companies with unicorn status today.”In contrast to the UK milestone, Germany has 42 unicorns, France 22 and theNetherlands 18. Less than the UK combined.
Founder/s: Steve BrierleyFounded year: 2017Funding: NARiverlane builds ground-breaking software to unleash the power of quantumcomputers. Backed by leading venture-capital funds and the University ofCambridge, the company develops software that transforms quantum computersinto commercial products. Riverlane works with chemical, pharmaceutical andmaterials industries to improve algorithms.Earlier this year, Riverlane raised $20 million (nearly £14.2 million) inSeries A funding round led by European technology venture capital fund DraperEsprit along with existing investors, Cambridge Innovation Capital, AmadeusCapital Partners, and the University of Cambridge.The company will use the investment to build Deltaflow, its operating systemfor quantum computers. Also, it will focus on expanding internationally to theUS, Europe and beyond. The funding will accelerate Riverlane’s mission tobuild a high-performance operating system that makes quantum computers useful.Image credits: Focal Point Positioning
Focal Point Positioning
Founder/s: Ramsey FaragherFounded year: 2015Funding: £10.8MFocal Point Positioning has revolutionised navigation and positioning softwarefor smartphones, wearables and autonomous vehicles through the development oftwo core products: S-GNSS and D-Tail. S-GNSS improves the sensitivity andaccuracy of GPS receivers, making it far easier to track people indoors and inremote environments. D-Tail taps into sensors within a smartphone or wearabledevice to more accurately track users in three-dimensions, producing data thatcan be trusted more than ever before.In March, Focal Point Positioning secured £6 million Series B funding fromDraper Esprit. The company will use the investment to accelerate deployment ofnext-generation positioning technology into chipsets and devices acrossmobile, wearables, vehicles and IoT.Image credits: Fetch AI
Founder/s: Dr Sabine Bahn, Dan CowellFounded year: 2015Funding: £24MPsyomics is an innovative healthtech company, with a diagnostic platformcalled Censeo that draws on the psychiatric process. which seeks to transformthe way mental health concerns are identified and defined, paving the way forearlier diagnosis and improved outcomes. A spinout from the University ofCambridge, Psyomics has developed unique technology to radically improve theway mental health conditions are assessed and triaged.Back in October 2020, Psyomics bagged £1.5 million led by University spinoutspecialists Parkwalk along with fellow existing investors Jonathan Milner,Martlet, and Cambridge Enterprise. The funds will be used to bring its mentalhealth assessment and diagnosis platform, Censeo, to market in the UK.Image credits: Speechmatics
Founder/s: Tony RobinsonFounded year: 2009Funding: £10.2MSpeechmatics provides automatic speech recognition technologies. Speechrecognition is one of the hardest challenges to solve due to the complexity ofhuman speech, resulting in large memory footprints. Using neural networks withthe latest developments from academia and industry, Speechmatics has developedcloud-based and real-time speech-recognition technology – in many languages.The technology can be used anywhere, by anyone, in any language.Back in 2019, Speechmatics secured £6.35 million Series A funding led byAlbionVC; IQ Capital alongside several angel investors. The funding wasannounced to be used to support Speechmatics’ global growth ambitions.it willbe used to enable product development and geographical expansion, with newoffices globally.Image credits: Nu Quantum
Founder/s: Mike HulseFounded year: 2017Funding: £4MAgile Analog is a company with a mission to transform the landscape of theAnalog IP market space. Analog chip design is slow, complex and manual. AgileAnalog is changing the way analog chip circuits are designed. Agile Analogallows customers to customise the chip for their specific needs, whether theInternet of Things, Security, Automotive, Artificial Intelligence, or othersegments within the vast semiconductor space.Back in 2019, Agile Analog grabbed $5.1 million (nearly £3.6 million) in apre-Series A funding round led by Delin Ventures, firstminute Capital and MMCVentures. The company will use the funding to expand the existing engineeringteam in Cambridge and deliver analog IP products to a wide range of waitingcustomers.Image credits: Cambridge GaN Devices
Cambridge Gan Devices
Founder/s: Giorgia Longobardi, Florin UdreaFunding: £10MFounded: 2016CGD has been created to explore and develop a number of unique opportunitiesin power electronics made possible by the team’s proprietary application ofGallium Nitride to the silicon-based semiconductor transistor manufacturingprocess.With silicon transistors widely acknowledged as having attained maximumefficiency, CGD’s power design engineers have developed a range of GalliumNitride transistors that are over 100 times faster, lose five to ten timesless power and are four times smaller than existing silicon equivalents, andprovide ease of use against alternative Gallium Nitride transistors. Thepossibilities and range of potential applications for these transistors residein the energy-efficiency and power density applications, supporting energysavings and making the world a greener and better place.In February, Cambridge GaN Devices (CGD), secured a $9.5 million (nearly £6.8million) funding in a Series A round. The funding round was co-led by IQCapital, Parkwalk Advisors, and BGF. It also included investment fromForesight Williams, Cambridge Enterprise, Martlet Capital, Cambridge Angels,and Cambridge Capital Group. The funds will be used to double staff and expandits GaN product portfolio following decades of research in power devices.The biggest tech hubs in the UK – and which is right for your business?
The biggest tech hubs in the UK – and which is right for your business?
The UK tech sector is speeding ahead of other areas of the UK’s economy, butwhere are these hubs, and which is right for your business?It is evident that there is a healthy mix of both established technologycompanies and an increasing number of tech start-ups across the tech hubs inthe UKWhat are the fastest growing and largest technology hubs in the UK — based ontech investment, the emergence of a start-up culture, the companies residingthere and the innovations being driven?This article will seek to answer this umbrella question, and hopefully providesome insight as to where you should set-up base if you are thinking of movinglocation or looking to expand your global reach into the UK.Before breaking down the country by city, it should be noted that the UK – byin large — represents a tech hub that is increasingly attractiveinternationally. For example, investment deals from Silicon Valley into UKtech companies have increased by 252% since 2011.On top of this, despite concerns surrounding the controversial Brexit — areport from UK law firm Pennington Manches found that there had been a 62%increase in foreign investment into UK firms in 2017, a third of which were byNorth American investors.>See also: Yoox Net-a-Porter opens London tech hub to develop AI capabilitiesInternational investment is not restricted to North America, and TechMahindra, the $4.7 billion IT service provider of digital transformation,recently announced significant strategic investments in the UK.A research and development centre ‘Makers Lab’ has been established to work incollaboration with its long-term client and partner, British Telecom (BT), atthe Adastral Park research campus near Ipswich, home of the world-renowned BTLabs. Makers Lab is also a part of the growing business incubation clusterInnovation Martlesham.The Indian-based tech giant is also setting up a brand new office in Salfordto strengthen its presence across the UK, while rolling out its apprenticeprogram in 2018.So, it is evident that the UK represents a global tech hub, but what about theindividual cities?>
UK tech sector leads Europe in AI — but what about the rest of the
> world?>> New data reveals that the UK creates more artificial intelligence jobs than> any other European nation, and more than half of them are outside of London.> Read here
Oxford and Cambridge
Both these cities are also famed for their universities. These institutions,along with, significantly, the number of academic research bodies relating toclinical medicine, have turned both Oxford and Cambridge into significant techhubs in the UK.In Oxford teleheath companies, like Oxehealth, are aplenty and innovation,spurred in part by the University of Oxford and it’s associations, is rife.The city has built a repuation as one of the leading tech hubs in the UK, withcomputing and health tech representing particularly strong sectors.VIDEOIn 2016, Oxford Sciences Innovation (OSI), the investment arm for theuniversity’s spinouts, grew to £580 million. At the same time, the commercialside of the university — Oxford University Innovation — launched 24 high-techfirms, while raising £52.6 million in seed stage funding. Of those 24 firms,21 were offshoots from the university, including; OxStem, Mind Foundry andEnzBond.One of the major success stories from Oxford — confirming the city as a techhub – has to be the computer software company Sophos, which achieved thelargest IPO for a UK software company in 2015, and now has more than 100million users in 150 countries relying on its security solutions.>See also: Technology dominates Autumn Budget as key to UK’s growthCambridge is similar to Oxford, in that it has an internationally recogniseduniversity, and it is second, only to Oxford, in the number of academicresearch associations relating to clinical medicine.According to the 2017 Tech Nation report, there are 30,219 people employed intechnology jobs in Cambridge, and on average — between 2011 and 2015 — 353startups were created in the city each year.However, where the city differs to hubs like Edinburgh, is in the talent pool.There isn’t a lack of talent emerging every year from Cambridge University.However, they are not matching with the local start-ups and businesses in thearea.Fiona Nielsen, founder and CEO of genomic data platform Repositive, said sheis yet to hire, or even interview, people from the Cambridge University poolof local talent. The University of Essex, according to Nielson, has a goodrelationship with Cambridge-based startups, but this can’t be said of thecity’s own university.This area could be improved, and connections built. However, the cityrepresents a significant tech hub in the UK.Cambridge’s tech sector is worth £2.4 billion, and is home to 1,500 techbusinesses – Europe’s largest technology cluster.‘The growth of Cambridge’s tech sector,’ according to an article from JLL,‘has also led to the creation of some of the city’s most innovativeworkplaces, including Microsoft Research and Amazon’s offices near the stationand the Bradfield Centre on Cambridge Science Park.’>See also: Silicon Valley: Here’s why China is the next global home of techAccording to the 2018 Tech Nation survey, 79% of the Cambridge tech communitythink the scale of tech businesses will expand in the next 12 months, while84% believe the number of tech businesses will increase.>
As the Northern Powerhouse becomes an increasingly attractive
> destination for tech start-ups, could London suffer from a brain drain?>> Whilst there can be no denying that London remains the UK’s tech hub, signs> are that Manchester and other cities across the Northern Powerhouse region> are growing increasingly attractive to tech start-ups. Read here
Manchester is the largest technology hub in the UK outside of London. The cityhas a range of tech-led businesses and startups, but it’s IoT community standsout from the other tech hubs in the UK. Indeed, Manchester ranks the highestfor startups that focus on IoT tech. This emphasis on IoT is reflected byCisco’s 2016 launch of an IoT innovation centre in Manchester, which looks atbuilding smart city projects.VIDEOManchester is somewhat different to the other cities in this article, however,experiencing more development, growth and what some would call a rebirth overthe last 20 years; following the 1996 IRA bomb in the city centre. It is now,arguably, the UK’s second city.Sir Howard Bernstein, the Manchester council’s chief executive, is largelycredited with leading this transformation and helping bridge the private andpublic sectors.He said: “Over the past 40 years, I’ve witnessed a dramatic change inManchester’s local economy. But today, the city is on the verge of assumingits potential as a global leader in the digital economy.”“The public and private sector has to work together to ensure that everyMancunian business has the opportunity and resources to reach its potential.”Sir Howard Bernstein at the MIPIM 2012 UK cities debate UK cities debate.Image source: EG FocusThe close links to the universities in Manchester, like many of the othercities in this article, is a significant factor for attracting technologycompanies to the city.>See also: What UK cities need the most digital investment to solve urbanIndeed, the growing reputation of Manchester’s universities – among otherfactors – is seeing tech companies flock to the city, and the tech sectoraccounts for nearly half of all enquiries for city centre office space.
UK leads Europe in scaleup investment, according to Tech Nation
>> Investment in the UK tech scene continues to grow at a rapid rate, despite> all the economic and political uncertainty. Read here
There is a clear trend here that defines a successful tech hub in the UK; thepresence of renowned universities that attract world class talent, who can becherry-picked by the technology companies located in the area.Some cities mentioned, like Manchester, are associated more closely withspecific technologies. However, in general, the tech hubs mentioned have arange of businesses offering a variety of services, all with the same goal ofinnovation.It is evident that there is a healthy mix of both established technologycompanies and an increasing number of tech start-ups across the tech hubs inthe UK.The only thing holding back the continued growth of these tech hubs is thedigital skills crisis currently facing Britain and the rest of the world.However, there is a strong emphasis from both public and private sectors toreverse this crisis and fill the roles of the increasing number of technologyjobs available. Addressing diversity issues is critical in this fight, gettingmore girls interested and involved in STEM subjects at both school anduniversity level.