So far, this autumn has got off to a great start. There’s been an investment surge, an increase in M&A deals, and new opportunities are on the horizon in the form of scale-up programmes from the likes of TechNation.
So, in this instalment of What’s the Buzz, let’s take a moment to appreciate the positive momentum generated this month. Here’s what October has brought us so far…
Good news for entrepreneurs: VC investment in UK start-ups is booming
UK start-ups held onto the top spot for VC investment in 2018’s third quarter, according to a new report. Funding has increased by £9m since the same time last year, thanks to an influx of £1.4bn from VCs across roughly 200 deals.
And the investments are not just large in scale – they are of serious size too. Two of the European top ten deals closed in the quarter came from British companies: biotech start-up Orchard Therapeutics’ obtained £111m in series C funding, and pharmaceutical firm Artios secured £65m in their series B.
This is a real sign of strength in the face of Brexit uncertainty. It demonstrates that there are still plenty of opportunities for UK start-ups to succeed – they just need to put themselves in the right position to take advantage of them, starting with a solid long-term plan.
UK government asks: are tech giants making digital markets uncompetitive?
The government has put out a call for evidence, seeking to discover if data aggregation by the tech sector’s biggest players is holding start-ups back. Between now and the seventh of December, businesses across all sectors will be invited, alongside experts and the general public, to provide insight into issues such as AI-driven price colluding, the exchange of free services and data, and the benefits and challenges of the current market set-up.
A fair environment is essential to ensure that start-ups and scale-ups have an opportunity to grow. As Chancellor Philip Hammond noted, "there are concerns that the big players could be accumulating too much power in our new digital world. Therefore, we must ensure we have the right regulations so that our digital markets are competitive and consumers are protected."
This consultation certainly seems like a step in the right direction.
Fintech is thriving with 140 M&A transactions in 2018 so far
The first half of 2018 saw the fintech sector undertake a total of 140 M&A transactions, at a value of nearly $40bn (£30.48bn). This surge in M&A activity represents a 26% increase on the same period last year, according to The Fintech M&A Market Report from Hampleton Partners.
Interest in the fintech industry has been rising since large financial corporations are turning to technological solutions to streamline back-office operations, improve the digital customer experience and cut costs. There is also a significant consumer-side demand for things like digital banking, payments and financial data services.
UK businesses make up one-fifth of the Global InsureTech List
A global list recognising the world's top 100 insurance technology businesses has included a total of twenty UK companies. The firms were chosen based on how they used technology to solve a significant industry problem or to generate cost savings or efficiency improvements across the insurance value chain.
This news shows the huge potential of UK InsureTech start-ups. To sustain this growth the technology scale-up community – from investors, advisors and businesses themselves – will need to focus on the right things. With fast growth, often people rush their business plan, but this is the stage in which planning is crucial.
Applications for Tech Nation programmes now open
This month saw Tech Nation open applications for Upscale and Future Fifty.
These programmes look for start-ups or fast-growing tech companies which are on a journey to becoming future unicorns. Start-ups participating in the programme will be coached by UK tech investors including Brent Hoberman, Saul Klein, Niklas Zennstrom, Lesley Eccles and Wendy Tan White. It’s free, and Upscale doesn’t take an equity stake in the business.
Upscale companies have now raised $1.3 billion since joining the programme, with prominent participants including BorrowmyDoggy, Flyt, Zego and ASI Science.
Clearly, the huge success of Upscale speaks for itself. This kind of programmes is vital in helping scaling tech companies to discover their full potential and unlock funding opportunities.
London remains a global leader in the technology sector. Tech companies in the capital are lucky to have access to investment, a high concentration of skilled talent, and strong networks. Consequently, they should take full advantage of any schemes they can.
So there concludes our news round-up for this month.
It’s been an overwhelmingly positive start to autumn. Make sure to join us next month, when we hope to see the confident trend continue!
Look out for next month’s instalment of ‘What’s the Buzz?’