Who’s scaling up in the UK?
Earlier this month, Beauhurst and The ScaleUp Institute launched The Scaleup Index 2019. This report examines the 5,456 unique visible scaleup businesses across the UK. A visible scaleup is a company that (i) meets the 20% OECD definition of a high-growth firm (see below) and (ii) files full accounts at Companies House. The report analysed everything from investments, investors and growth rate demographics, to geographical distribution, founders and executives.
In 2019, the Index shows how the cohort of private scaleups has swelled to more than 5,000, growing from 4,420 to 5,456 in a year — an increase of 23%. Additionally, 249 scaleups are listed on Alternative Investment Market (AIM) who continue to show higher turnover growth rates than their non-listed peers.
2018 saw £1.3 billion invested into visible scaleups through 63 deals: the largest of these was £150 million into Oxford Nanopore. In terms of number of investments BGF remained the top investor for the third year in a row. Despite this, 2017 remained the record year thanks to a handful of megadeals (>£50M).
“The UK relies heavily on the growth of its scaleups for jobs and future wealth creation. Now, more than ever, there is a clear national interest to safeguard this by increasing Investment,” Stephen Welton CEO, BGF. “We need to send clear signals to both promote entrepreneurship and to have dynamic policies to support the whole ecosystem. As economies around the world adjust to the industries of the future, driven in large part by knowledge-based enterprises, and newly emerging sectors such as autonomous vehicles and the wider green agenda, this year’s research shows the potential of the bold and bright businesses of today to become the big businesses of tomorrow.”
According to the Index, over £45 million of Innovate UK grant funding went to visible scaleups in 2018. These grants were larger on average than in previous years. By value, scaleups in the Midlands received a third of all grants awarded to scaleups.
Simon Edmonds Deputy Executive Chair and Chief Business Officer, Innovate UK, said: “High growth and scaling businesses are core to future economic growth. To best support those businesses we focus on creating an enabling environment that encourages innovation in all businesses with the potential to grow and scale, right across the country. We are placing more emphasis on identifying and investing in high-growth SMEs with the potential and ambition to grow through innovation. This is reflected in the way we assess and fund innovation projects and the wider support delivered, including for high potential scale-ups.”
The Index showed that representation of women at the C-suite of visible scaleups saw small improvements. Last year, 41% of scaleups had at least one female c-suite member, increasing to 48% this year. However, the proportion of scaleups with a female founder remains at 4%.
According to Sam Smith CEO, finnCap Group Plc: “There is a lot of work to do to improve the number of female founders of scaling businesses and getting the right access to finance is critical to this. At finnCap, our Ambition Nation female leaders programme aims to make the investment landscape easier to understand and provide stories of ambition to help encourage others to scale. We need to make those stories as visible as possible to unlock the realms of options and possibilities to our fellow female founders. I am immensely proud that finnCap continues to achieve our scaleup aims and I am determined we help others do the same.”