Half of the UK’s 30,000 larger-scale businesses plan to raise funds this year, either through debt or equity.
But 40% of scaleups believe there isn’t enough capital available to meet their growth needs, according to a Scaleup Institute survey.
Last summer, the Scaleup Institute identified a Â£ 15bn funding gap between what fast-growing UK businesses need and what is actually available. Other countries have much larger institutional funding reserves for the entrepreneurial economy.
> See also: Scale-ups in the UK account for a third of all venture capital investments in Europe
In 2019, there were 33,445 scaleups in the UK, according to the Office for National Statistics. A scale-up is defined as a business that grows 20% revenue or the number of employees over a three-year period.
These 30,000 plus scaleups achieved an average turnover of 32.6 million pounds each in 2019, up from 29.5 million pounds in 2018.
And there are 17,000 other developments underway, defined as growth of 15% or more year over year.
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In 2019, these 33,445 scaleups generated Â£ 1.1 billion for the UK economy, a 10% year-over-year increase, and accounted for 50% of total SME turnover ( Â£ 2.2 billion generated by 5.9 million SMEs).
When it comes to the main obstacles facing scaleups, the founders told the Scaleup Institute that the five key challenges are:
- Accessing UK and international markets, securing the right sourcing opportunities and dealing with businesses (74%)
- Access to long-term growth capital, whether debt or equity (47%)
- Access to qualified talent, both from junior employees but also at board level, good non-executive directors (46%)
- Infrastructure (19%)
- Leadership development (18%)
Irene Graham, CEO of the Scaleup Institute, said: âHistorically, access to talent has always been seen as the number one problem for scaleups, but now market access is emerging as the most pressing concern. . “
To address this, the Scaleup Institute unveiled three new initiatives this month.
First, he created 14 Scaleup peer networks across the UK in partnership with Innovate UK, connecting 200 founders, CEOs and CEOs of growing companies to bounce ideas off each other.
Graham said: âIt is structured regionally to provide access to scaleups to other peers working within Innovate UK at the local level with access to funding and mentors. It’s about connecting with talent and capital. Many of our scaleups want to engage more in the opportunities offered by the innovation agency. “
Second, starting this month, he is hosting a series of seminars and training events for business leaders and their professional advisers to raise awareness and better understand all of the financing options available for partnered scaleups. with British Business Bank.
Third, he launched Invest in Creative, an educational platform to showcase investment opportunities in the UK’s creative industries, in partnership with the UKBAA angel investor association.
Graham was speaking at a successful Virtual Scaling Week event, with 13,000 people participating in the weeklong series of seminars and events. Speakers included Business Secretary Kwasi Kwarteng, Small Business Minister Paul Scully and Scaling Up Champion Sherry Coutu.
Graham is backed by the government which is at least making the right rumors when it comes to supporting British scaleups.
Addressing Scaling Week, Prime Minister Boris Johnson said with typical Johnsonian enthusiasm, âToo often we politicians have overlooked the crucial stuffing of our entrepreneurial sandwich. The tens of thousands of well-established and rapidly growing small and medium-sized businesses. It is among these scaleups that the magic happensâ¦ when you scale up, we all level up â.
In the budget, Chancellor Rishi Sunak announced that the UK would introduce an ‘elite, points-based’ visa, including a ‘scale-up’ component, allowing those with a job offer to ‘a British scale recognized to be accelerated by March 2022.
The Scaleup Week initiative was part of the Scaleup Institute’s continuing mission to educate and inform the scaleup community – what Graham calls âknowledge asymmetriesâ.
Graham said: âWe know it is difficult as a founder to navigate what is available nationally or locally. But there is much more local and national support for scaleups available which we identify through our support finder as well as more specific programs. “
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