The technology sector as a whole has been one of the few parts of the UK’s private sector to perform well during the pandemic. Chief Economist at the Bank of England, Andy Haldane, suggested that technological adoption among firms is the key building back the country’s economy ‘not just better, but faster and smarter’.
A recent national survey revealed that 72% of UK tech businesses saw an increase in demand for their services between throughout 2020, suggesting tech firms are holding strong despite recent pressures brought by COVID-19.
And whilst it is apparent the demand for tech-based companies has continuously risen over the past decade in Britain, the UK’s ever-increasing digital dependency, rapidly accelerated by the pandemic, indicates that investing in innovative tech may never have been so crucial, but yet so lucrative.
The UK’s tech boom
The 2020 tech nation report shows the United Kingdom currently experiences the third highest level of investment into tech companies globally. With only the US and China boasting higher volume of venture capital invested.
VC investment in tech companies by country in 2019
The £10.1bn invested into UK tech companies in 2019 signalled yet another record breaking year for VC contributions. A £3.1bn increase from the previous year’s figures, in 2019 the UK received a higher level of investment into tech firms than Germany and France combined.
But whilst a heightened emphasis on digital services has seen the UK’s technology sector as a whole boom over the past decade, one branch in particular has outperformed the rest… fintech.
Annual figures have revealed that the UK accounted for half of Europe’s ten biggest fintech deals in 2019, and over 80% of Europe’s overall fintech funding of $58bn, placing the country second in the global rankings for VC investment.
Source: The Global Fintech Index 2020
Whilst this reflects the increasing ingenuity, innovation and profitability of British tech start-ups in recent years, continued investment to scale-up breakthrough businesses is crucial to ensure the growth of the sector and its retained level of job creation.
Craig Peterson, Chief Operating Officer at GCV commented:
“Once furlough ends, we need to be looking at new job opportunities as well as preserving existing ones. Building more sustainable businesses and supporting entrepreneurs and innovators, especially those in the tech sector, is going to be critical to the UK economy.”
One of the fintech companies at the forefront of this effort to sustain British business is challenger bank and GCV portfolio company B-North.
B-North will look to disrupt the £150bn SME lending market, offering business loans between £500,000-£5 million up to 10x faster than incumbent banks, facilitating the growth of small, profitable, British businesses, whilst creating thousands of jobs throughout the UK.
Now raising a minimum of £500,000 in a Bridge Stub Round via the GrowthFunders co-investment platform, the current raise will enable B-North an additional cash runway to complete complete the Series A Round which is already 94% funded at £18.8m, allowing the challenger bank to commence lending activities shortly thereafter.
Tech – a key player in post-pandemic recovery
In the wake of the most widespread pandemics in recent generations, technology has played a key role in how we have adjusted to the ‘new normal’, with people cut adrift from the physical world, digital solutions have already become increasingly important for both consumers and businesses.
International video communications software Zoom stands as testament to that. The video conference tool reported a total revenue of $328.2 million in three months leading up to April 2020, a 169% increase on last year’s figures that was largely attributed to increased COVID restrictions limiting social interaction.
But whilst many global tech firms have benefitted from their unique approach to making lockdown life easy and efficient, a host of innovative tech companies operating within the UK have also flourished – pioneer of self-service ordering systems and GCV portfolio company, Qikserve, being but one.
QikServe is the enterprise platform for guest self-service in hospitality. Using any channel from kiosks and tablets to web and mobile apps, hospitality operators can provide powerful off-premise and in-store solutions, offering guest the convenience to pay for their food and drinks whenever, and however they want.
The company was fast to react to the urgency for UK hospitality operators to find solutions for trading under social distancing restrictions, minimising cash handling and addressing consumer safety concerns.
As a result, businesses began taking stock of the need for QikServe’s solutions and their inherent social distancing elements. By April, incoming customers included larger chains such as TGI Fridays and Tesco´s Eastern Europe.
Characterised by its 76% in transactions since the start of the pandemic, the period saw Qikserve close deals with yet more key industry players – one notable example being Britain’s biggest motorway service operator, Moto.
Although it is evident technology has been one of the few parts of the UK’s private sector to perform well during the gruelling coronavirus pandemic, many in the industry suggest further investment into the sector is crucial to ensure economic conditions return to pre-coronavirus levels as soon as possible.
Speaking at industry body Tech Nation’s ‘Unlocking Global Tech’ event earlier this month, head of Europe and Eurasia at the World Economic Forum, Martina Larkin said:
“Overall the (economic) recovery needs to focus on transformation – the digital transformation. We have to have some creative disruption in our economies, and entrepreneurs and innovation will have a critical role to play in this process.”
Minister for Exports at the Department for International Trade, Graham Stuart, backed the vision for a tech-focused economic strategy, added:
“The government is determined to help UK firms embrace exciting new opportunities for trade and investment that are emerging across the globe, and tech is right at the heart of this endeavour.”