UK startup exits totalled a record £26.7bn in 2021
Triple Point Ventures – part of the Triple Point Group – and Beauhurst, the research firm, have published a study showing the value of UK startup exits totalled a record-breaking £26.7bn in 2021.
The findings were published in the latest edition of a yearly co-authored report, Exits in the UK. The report, which has been published for a decade, identified 781 high-growth company exits in 2021. This is five times more than the number recorded in 2020, signalling a strong post-pandemic rebound, and twice the 10-year recorded average.
The mean exit valuation for B2B companies (£302m) in 2021 was almost triple that of B2C companies (£119m), but the median was similar – £51m for B2C firms versus £41m for B2B companies. This shows that while bumper B2C exits are less common, when they do occur they fit the classic ‘home run’ venture capital narrative. The B2B exit figures, by contrast, tend to be made up of smaller, strategic acquisitions.
Of the total number of exits, 732 were acquisitions. This continues a decade-long explosion in the number of acquisitions after only 23 were recorded in 2011. The research also identified 49 IPOs, a figure that represents an increase of 308% from the previous year.
Seb Wallace, Investment Director at Triple Point Ventures, said: “This research shows the UK startup community bounced back phenomenally following the pandemic – but it’s the longer-term success story that’s most interesting to me.
“Over the past ten years, we’ve seen the UK startup ecosystem mature, with world-leading companies proving compelling to venture capital investors. Far more businesses have therefore gone on to become attractive IPO candidates or acquisition targets, culminating in these bumper figures. We believe UK startups are innovative enough and resilient enough for this trend to continue long into the future.”
Increasing the number of IPOs in the UK has been a key objective for the UK Government recently. In December 2021 it made several changes to UK listing rules following recommendations made by Lord Hill, the UK’s former European Commissioner for Financial Services, in a report released earlier that year.
Henry Whorwood, Head of Research at Beauhurst, said: “Not only are these findings a major boon for the UK startup community and their venture capital partners, but they’re a boon for the entire UK economy. In addition to providing a rich reward for founders, exits of all shapes and sizes are vital to the wider health of the UK’s high-growth ecosystem.
“For one, exits provide liquidity to early investors, which allows them to re-invest in other early-stage companies. They also free up innovative, entrepreneurial people – founders – to focus on new endeavours. And of course, they provide a strong platform for the future expansion of the companies themselves.”