UK Startups Poised for Growth, According to New Survey by Silicon Valley Bank
Results of First UK Startup Outlook Survey Released
LONDON -May 2, 2013 -Eighty three percent of technology startups in the UK anticipate positive business conditions in 2013, according to 125 startup executives surveyed for an interactive report by Silicon Valley Bank, financial partner to technology, life science and cleantech businesses and their investors worldwide. For the first time, Silicon Valley Bank surveyed UK based startups to gauge their perspectives on local business conditions and opportunities and challenges including hiring, raising capital and government support.
Startup executives are positive about the coming year, following a strong 2012. Sixty six percent of the respondents report that business conditions had improved in 2012 compared to 2011 and 73% met or exceeded revenue targets last year. Of UK startups earning revenue, nearly half expect their company to be profitable this year, while just 26% of their US counterparts report the same.
Joshua March, Co-Founder and CEO of startup business Conversocial says: "The tech scene in London has evolved dramatically since we started working on Conversocial in 2009. One of the most exciting changes is how much easier it is to hire great developers than just a few years ago. Undertakings like Silicon Milkroundabout and the Tech City initiative, backed by so much government and press support, have turned 'startups' into a viable career path."
Despite the positive outlook, the potential for growth could be hampered by continuing stagnation in the UK fundraising environment. Thirty-nine percent of respondents say they are looking to raise capital from venture capital and angel investors, yet the Startup Outlook findings reveal that there is a significant funding gap between Seed and Series A funding.
Startup executives say that reform of government initiatives would have a role to play in growing and supporting their industry sector. More than half (56%) want greater access to government grants and funds designed specifically for startups, while 52% would like to see tax reforms.
Hiring is a key priority for UK based startups. Eighty-seven percent of survey respondents plan to hire in 2013 and 77% say that finding workers with STEM (Science, Technology, Engineering and Maths) skills is absolutely critical to the success of their business.
Commenting on the research, Bindi Karia, Vice President at Silicon Valley Bank says: "The tech startup sector is thriving, with one in five businesses beating their revenue targets for 2012, and another strong year predicted for 2013. The flipside is that many executives have concerns around how they should fuel the next level of growth, since access to funding and talent are cited as challenges for many startups. Nevertheless, these are exciting times for the UK tech scene. Executives are optimistic and working hard to develop the 'next big thing.'"
Since 1983, Silicon Valley Bank has worked with tens of thousands of technology, life science and cleantech startup businesses, along with their investors, to help them grow, create jobs and develop innovative products and services that are used and sold worldwide. Today, Silicon Valley Bank works with about half of all venture-capital backed businesses in the US, servicing them as they grow into mature, multi-national corporations and increasing their probability of success along the way. Silicon Valley Bank works with innovative businesses through its offices in the UK, US, China, Israel and India. Over the years, Silicon Valley Bank has worked with companies including Mozilla, Pinterest, Cisco and Amazon and today is proud to work with companies including Shazam and WHO from its commercial banking branch in London, which opened in June 2012.
Independent market research firm Koski Research conducted the online Startup Outlook survey for Silicon Valley Bank in December 2012. For the purposes of this study, UK startups are primarily defined as companies in the innovation sector with less than £25 million in annual revenue and fewer than 100 employees. Silicon Valley Bank completed a similar survey of startup executives in the US for the fourth straight year, which is available here.
About Silicon Valley Bank
Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB Financial Group provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 28 US offices and six international operations. (Nasdaq: SIVB) www.svb.com.
Silicon Valley Bank is registered in England and Wales at 41 Lothbury, London, EC2R 7HF, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the Financial Services Authority, FSA reference number 577295. Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.
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