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 East of England closely follows a 50:30:20 ratio, and Cambridge exhibits a desirable ratio, at 47:29:22. Yet Peterborough, with a scale ratio of 16:30:52 is over reliant on late stage tech scaleups and has 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 East of England 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 East of England Riverlane and Speechmatics:
Riverlane (Cambridge, Deeptech) Founder: Steve Brierley
Pioneering quantum software, Riverlane is building the operating system for quantum computers. Over the next year their operating system will run on 20% of the world’s quantum computers, with an ultimate mission to run every program on every quantum computer in the world. See also: Riverlane secures $20 million in Series A funding
Speechmatics (Cambridge, Deeptech) CEO: Katy Wigdahl
Powering applications that require mission-critical, accurate speech recognition, Speechmatics®’ any-context speech recognition engine processes millions of hours of transcription worldwide every month in more than 30 languages. Their speech recognition technology is used by enterprises in scenarios such as contact centres, CRM, consumer electronics, security, media & entertainment and software.
The Upscale Programme
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.”
Rebecca Simmons, COO, Riverlane, comments: “We are thrilled to join the Upscale 6.0 cohort. This is perfect timing for the team here at Riverlane. We’ve just raised $20M in Series A funds and are looking forward to learning from Tech Nation experts and peers about recruitment, international expansion and building company culture while we work remotely and continue to scale.”
Katy Wigdahl, CEO, Speechmatics, comments: “As a high-growth, scaling business, the Upscale programme provides an exciting opportunity for us to learn from other companies in a similar position to us which is extremely powerful. Scaleups are now more crucial than ever given the economic landscape since the pandemic began. They inject new and exciting technology into the world in order for us to change and adapt to the challenges around us which ultimately has a positive impact on the economy.”