A Milestone for Beauhurst and the UK
Henry Whorwood, 27 July 2023
Beauhurst has been tracking the UK’s economy since 2010. One of our areas of focus is the high-growth and innovation economy; many of those companies use equity to finance their growth. That’s why we track every single equity investment into UK private companies. We track those deals through reading press releases, talking to investors, and watching Companies House for the relevant filings. As a recent Sifted article based on our data shows, more than two thirds of rounds go unannounced (you can read more about how we find those deals here).
July 2023 represents a milestone for Beauhurst and the UK because we’ve now tracked over £150b worth of private investment into the UK’s startups and scaleups.
Equity investment is a crucial component of economic growth. It allows risky, cutting-edge technologies to be explored and gives companies of all types the ability to scale rapidly. That we have now seen more than £150bn of investment into UK startups and scaleups is impressive. Even more important, however, is the impact these companies have had on the broader economy through employment, innovation and growth - many times that of the initial capital. We are proud at Beauhurst to have been shining a light on these companies and their important role in creating prosperity.
What happens next?
As you can see from the chart above 2021 was the record year for investment into the UK startups and scaleups – over £28b was invested. And it will probably not have escaped your notice that investment has slowed this year; we’ve only tracked about £8.5b of investment so far.
This chart shows that 2023, although tracking above 2020 and 2018, is below 2019 and well below 2021 and 2022. At the current investment rate the year looks on track to end around 2018’s levels – we’ll need a few megadeals to change that. But those are the deals usually backed by investors who are most impacted by interest rate rises. But I’m never one to be too gloomy. Yes, investment volumes are slowing, but what’s happening to the companies themselves.
The 27,359 companies that have received that £150b are faring quite well. Fewer than five thousand (17.4% to be precise) have died. Nearly 10% of them have exited. Of course, nearly ten thousand of them are still at the seed stage and of course those businesses still have a lot of risk associated with them. But overall the cohort is proving surprisingly resilient.
That’s why at Beauhurst we track much more than just equity investment. Venture debt and innovation grants have a huge role to play; as does the support provided by accelerators; and, moreover, many businesses finance their growth themselves – that’s why we track all scaleups (regardless of whether they’ve received equity).
This £150b milestone is great news for the UK, but only quantifies part of the UK’s platform for growth. The odds are currently stacked against them, but there are vast numbers of startups and scaleups valiantly trying to defy those odds.
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