According to new Tech Nation data, nearly a quarter of UK tech companies will reach Series C or exit in 2022, but these large liquidity events must not overshadow the need to support the majority (50%) of tech companies in earlier stages of growth, particularly those R&D intensive firms with longer product development cycles and time to market.
New data from Tech Nation reveals that, more UK growing IT companies are leaving than ever before, with 23% of tech firms reaching Series C or a high-quality liquidity event by 2021.
Over the previous decade (July 2012 – July 2022), the UK has seen 54 IPOs (with firms raising a total of £3.22 billion) and 1,200 acquisitions (with companies selling for a total of £12.5 billion).
In 2022, the percentage of UK tech startups that achieve exit is higher than the percentage that fail.
However, the remaining 50% of computer businesses that continue to operate are experiencing slow growth, employment, and investment.
Almost a quarter of all UK IT startups reach Series C or exit.
23% of UK tech businesses have reached Series C or are exiting; these are significant stages in a tech company’s lifecycle.
Over the previous decade, 0.4% of the UK’s tech businesses have gone public. This translates to 54 IPOs in the previous ten years (37 of which will take place in 2021), with firms raising a total of £3.22 billion.
Over the same time span, there have also been a substantial number of acquisitions – over 1,200 in the previous ten years – with firms totaling £12.5 billion in value.
The number of IPOs has climbed over the previous decade, from four in 2013 to seventeen in 2021.
It is promising that more tech companies are achieving high-quality liquidity events than ever before, particularly in industries like as fintech and cyber, which contribute to the UK’s standing as a global tech and scientific powerhouse.
However, we cannot overlook the fact that an even higher proportion (50%) of tech firms, particularly those focused on creating new technologies, are not scaling.
If these seed and pre-seed digital enterprises are to become the scaling engines of the UK economy, the availability of finance that maintains their early growth must be prioritized, otherwise the UK risks suffocating potential global tech stars. Access to early stage finance must be prioritized throughout the startup ecosystem. This is especially true for deep tech businesses, who concentrate on cutting-edge technologies like AI and quantum computing, which underpin UK impact tech, and may require longer periods of intensive innovation at the start 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, it 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 require to accelerate their growth.