UK Tech Nation final report calls for deeptech scaling and cashing in

UK Tech Nation final report calls for deeptech scaling and cashing in

Business news |
By Nick Flaherty

The UK’s Tech Nation ‘accelerator’ has published its final report as it closes its doors next week after its funding was moved to Barclays bank.

The report highlights the need for more scale up support to build startups into larger companies, and also for founders to drive more exits at higher valuations, which appears to be suggesting actively driving a culture of asset bubbles.

The report explores conditions for growth created over the last decade, what tech companies can do to react to these conditions, and what needs to happen in order to accelerate the future growth of UK tech companies of all kinds and maintain strength on a global stage.

This comes after the collapse of Silicon Valley Bank in the US and the UK and ‘tech startups’ covering a wide range of companies, from used car startup Cazoo to delivery company Hello Fresh.  Tech Nation cites tech company alumni as Monzo and Revolut in fintech, Depop (clothes), Bloom & Wild (flowers), Zilch, Just Eat (Dutch food delivery), Darktrace, Marshmallow, Ocado (online supermarket and robotics), Skyscanner, Peak AI and Deliveroo (deliveries).

As a result it is calling for a 15x boost in investment in deeptech and climate tech must be made by the end of the decade to stimulate and sustain growth.

As a result it is calling for a 15x boost in investment in deeptech and climate tech must be made by the end of the decade to stimulate and sustain growth.

“Tech leaders in the UK must develop a Silicon Valley-like sense of exit intentionality, capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late stage growth,” says the report. “Enabling high value exits, and providing augmented support to founders to realise value created by their companies, could contribute up to $550bn in value to the UK tech ecosystem over the next decade.”

“The last decade of UK tech has been an incredible success story. One in which the UK is now third in the world for tech investment, after the US and China,” said Gerard Grech, Chief Executive at Tech Nation.

“But there is much more we can do and value to be unlocked if we create the right conditions for future growth over the coming years, as this report shows,” he said. “We urge ecosystem stakeholders, investors and government to continue optimising the business environment for tech businesses, from opening up new pathways for talent to increasing sources of funding. Despite the challenging headwinds at present, I’m optimistic about the next decade and the UK’s ambition to become a science and technology powerhouse.” 

Scaleups in the UK have returned just over $583bn in value over the last ten years (2014-2023) – achieved by an exit of some form, whether an acquisition, SPAC or a public listing. Over the next decade, to return around the same rate of value to the ecosystem (just over 3.7x investment) UK tech firms should target exits of $2tn which is a significant challenge, hence the call for more exits.

The UK tech ecosystem will reach $2.6tn by 2032 (up from $1tn in 2022) if the current momentum is maintained. However the report says more support for scaling up could create a $4tn ecosystem in the UK by 2032.

However investment in 2022 receded by 32% globally, and 28% in the UK. UK startups raised $30bn in 2022, which though 72% higher than the 2020 total, is down from the heights of 2021 when funding peaked globally.

In 2022, the UK tech ecosystem saw the lowest number of rounds in the past 5 years, over 1,200 less than 2021 levels. High value rounds equalling $250mn+ and low value rounds equalling less than $1mn (pre-seed) encountered the largest percentage falls (with pre-seed rounds falling by 41%).

The UK took back its position as the third largest tech ecosystem in the world for VC investment in 2022 after falling behind India, though it is likely to see increasing pressure from India and emerging ecosystems like Indonesia and Mexico over the next five years says the report.

Against its European neighbours, the UK remains the dominant player with investment into startups and scaleups remaining greater than investment into France and Germany combined.

However France, Italy and Sweden are the only countries to see positive investment growth after the record covid bounce back year of 2021 (compared to the UK which experienced its highest decrease in 5 years at 24.7%). France is the only country to have experienced positive growth in every year over the past decade. 

2022 also saw a decline in the rate of creating billion dollar ‘unicorn’ companies to 4%, one tenth that of the 41% in 2020-2021 . This is underpinned by a reduction in the number of new unicorn companies being founded year on year for the last 18 months.

On the other hand, future unicorn ($250mn – 800mn valued companies) numbers have risen with 45% growth from 2021 to 202, suggesting that either the UK is effective at supporting companies to scale, but not to the high end of the value spectrum, or that there is a glut of unicorns to come.

Some ethnic groups and women are still heavily underrepresented in UK tech highlights the report. No European country achieves a proportion of 30% of women in the tech workforce and tech roles for women in the UK are paid nearly 2.5% on average less than their male counterparts. Edinburgh is the city with the most women in tech, followed by Newcastle and Cambridge. All three are above 30% vs UK’s average of around 25% of the workforce.

The proportion of people from underrepresented ethnic groups working in tech has increased over the last five years, but by less than +2%, highlighting continued inequality of access to tech roles. 

The report calls for UK government statements to paired with policies and support mechanisms to match and for all ecosystem stakeholders to fuel conditions for growth.

“The Government needs to develop a plan that creates the environment and platform for UK tech to be the rocket fuel for growth in the economy and address some Achilles heels of the UK economy,” said Stephen Kelly, Chairman at Tech Nation. “The opportunity for UK Government with the impact of tech-enabled innovation, machine learning and automation has huge potential for all industries from Agriculture to Waste Management with a massive productivity boost where currently the UK languishes at the bottom of G7 productivity league.

This would need ‘patient capital’ long term investments into all stages of company growth, not just at early stages. This is where the 15x investment in deeptech is made. Addressing current gaps in access to finance for UK startups and scaleups could contribute up to $450bn in additional value to the UK tech ecosystem over the next decade.

Addressing current gaps in access to talent for UK startups and scaleups, and reducing inequalities in access to opportunity in tech for underrepresented people (as founders and employees) could contribute up to $400bn in additional value to the UK tech ecosystem over the next decade.

Dr. George Windsor, Data and Research Director at Tech Nation comments: “The last decade of UK tech has been explosive; growth has been unprecedented, and the positive economic impact created by founders has been almost unimaginable. As UK tech continues to mature, we must take every opportunity we can to collectively re-imagine, and change ecosystem conditions for the better.We argue that this should take the form of addressing access to finance, boosting diversity, and prioritising value realisation. Tech is at an inflection point, with a profound opportunity for future growth, and a number of both headwinds and tailwinds to get there. Let us continue to build this Tech Nation together; thoughtfully, for everyone, and for our future.”

An interactive version of the report is at


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