New ‘Scale Ratio’ reveals South West Tech is well positioned for sustained growth
Tech Nation, the scaleup network for entrepreneurs, launches its inaugural Scale Ratio, which compares the number of seed stage, early growth and late growth companies in the UK’s tech ecosystems.
Tech Nation reveals that a 50:30:20 ratio of seed (50%), early growth (30%), late growth (20%) companies in a UK regional tech hub is indicative of a mature, balanced ecosystem, well placed to benefit from the accelerated growth of late stage companies while creating the next wave of tech scaleups.
Tech Nation’s newly launched ‘Scale Ratio’ suggests the 50:30:20 ratio results in the highest performing hubs – areas with the largest number of scaleups attracting the most significant VC investment. London, Manchester and Cambridge generally exhibit the 50:30:20 ratio and attracted the most investment in the UK in 2020, with 70% of investments made into late stage companies.
As a whole, the South West closely follows a 50:30:20 ratio, and Bristol exhibits a desirable ratio, at 50:27:23. Exeter, with a Scale Ratio of 59:14:27, is revealed as a tech hub to watch in 2021, with one of the highest proportions of seed stage companies in the UK. However, Bath, with a Scale Ratio of 37:33:29 has a high reliance on late stage tech scaleups and a less developed seed stage pipeline, which is crucial to driving sustained growth.
Dr. George Windsor, Head of Insights, Tech Nation, comments: “Crucially, the Scale Ratio tells us about the growth potential of the UK’s tech hubs and provides the levelling up agenda with new evidence to boost regional ecosystem development. It highlights exactly where scaleups are not receiving the support they need to grow from seed stage upwards to ensure these gaps are plugged. Despite the challenges of the past 12 months, the growth and potential of homegrown tech pioneers gives us something to celebrate.
“Tech scaleups hold the key to the UK’s competitiveness in the next decade through job creation and investment. Scaleups are already driving investment into UK tech, representing 81% of the UK total and creating employment, with approximately 150,000 jobs in 2019. From established firms to startups, it’s important to remember that companies at all stages make up the local and regional economies that give UK tech its global reputation.”
Tech Nation identifies two South-West firms as the UK’s most promising tech companies
This report comes as Tech Nation reveals the latest cohort of its Upscale programme, 33 of the fastest-growing and most promising home-grown tech businesses in the UK. The Upscale programme supports the growth of leading scaleups, exploring the fundamental growth challenges between peers and established tech founders.
The programme has been able to increase participation from across the UK, with 48% of finalists coming from outside London. Two of the 33 companies joining the programme are from the South West, Rovco and Virti.
Rovco (Bristol, Energy) Founder: Brian Allen
As the energy market evolves, Rovco is disrupting the sector, combining innovative robotic platforms and cutting-edge technology to support energy transitions. Rovco are pushing the boundaries of offshore robotics, optimising operations and reducing the need for offshore teams. They support clients automation and decarbonisation strategies, driving operational efficiency, saving money and time.
Virti (Bristol, Edtech) Founder: Alex Young
Virti uses XR, artificial intelligence and gamification to help employees learn faster and remember training for longer. Virti’s mission is to make experiential education affordable and accessible for everyone. It uses virtual and augmented reality coupled with AI to transport users into difficult to access environments and safely assesses them under pressure to improve their performance.
Now in its sixth year, the Upscale programme has continued to evolve, completely online. The programme this year is helping founders and scaling teams tackle the particular challenges which have arisen as a result of the Covid-19 pandemic, such as: scaling culture and building a team remotely, and raising funds in a lockdown, pivoting strategy.
Liam Ward, Upscale Programme Lead, Tech Nation comments: “We’re incredibly excited to launch Upscale 6.0, our most regionally diverse cohort ever, alongside the Scale Ratio Report, and to continue to champion and support the UK’s most exciting fast-growth companies.
“Despite the events of the last 12 months, we’re still seeing some exceptional companies scaling at Series A stage, with healthtech and the future of work being represented particularly strongly. We’re excited to adapt Upscale to support the new challenges that founders are facing around remote work, fundraising and culture; and to work with such an exciting group of leaders.”
Alex Young, Co-founder & CEO, Virti, comments: “We’re excited to be a part of Upscale 6.0 and to work with the team, mentors and other companies as we scale and grow our customer base at a rapid pace. As a hyper growth company that has grown by over 1000% the timing is perfect as we focus on strategies to help ensure sustainable growth during what has been a challenging time for many. Scaleups will be a vital part of bouncing back from the pandemic with our particular focus on helping the workforce of the future in any industry perform at their best whether they are remote or in-person.”