This year’s Hiscox Tech Track 100, published in yesterday’s Sunday Times, shows how a new Google generation of digital marketing firms is feeling the algorithm to grow in leaps and bounds.
A fifth of the firms that feature in this year’s ranking are in this sector – no surprise considering that online advertising is likely to hit $100 billion this year. These companies seek to blend rocket science (in the form of complicated analytics which track internet users’ activity) with old-fashioned sales and marketing nous.
MVF, a digital marketing firm based in North London, takes this year’s number one spot. MVF, which was only created in 2009, had annual sale growth of 278% last year; its turnover is £14 million, has 125 staff, and is already posting a profit.
This year’s table also features 18 companies that provide cutting-edge manufacturing technology. E-Leather, in 12th spot, has developed a multi-patented eco-friendly material that is lighter and more durable than others, which is being widely used to upholster seats for airplanes, trains and buses.
In 18th place is Tech21, a Twickenham-based firm that briefly attracted investment from Dragons’ Den members Peter Jones and Theo Paphitis, which designs and makes protective cases for mobile phones, laptops and tablets made from a revolutionary material.
The size of the firms featured in the Tech Track table, which ranks the fastest-growing private tech, media and telecoms firms by sales, has mushroomed. They had combined sales of £2.6 billion, whereas the companies that featured in the first table (back in 2001) had total turnover of only £414 million. Firms in the class of 2013 employ 12,200 people, nearly 40% more than their 2001 counterparts.
The ranking shows the increasing contribution that tech companies are making to the British economy. There are now at least 270,000 of these firms, according to research by the National Institute of Economic and Social Research, and they need more help from the government to flourish, as Steve Langan, our managing director, said in the Sunday Times.
He suggests tackling the skills gap that prevents young British tech firms from hiring, by putting computer science on the syllabus of all our schools.
But despite the economic headwinds and lack of government support, tech firms are growing fast. Those in the top 100 posted average annual sales growth of 92% over the past three years, much higher than the 81% average growth posted by the firm’s in last year’s ranking. Most are making money as well, with 78 of the firms already in the black.
More than half the firms (57) were still majority owned by their founders or by an entrepreneur. Of the remainder, 39 are owned or backed by venture capital, including Bowman Power, a turbogenerator maker, which is ranked number 21 in this year’s table.
Only nine companies raised new funds in the past 12 months. These include Shazam, the music-recognition app maker (in 88th position), which used the money to fund its international expansion. It will be interesting to see how many firms in next year’s list use the new stock market listing laws unveiled by Chancellor George Osborne in April (at the office of Unruly Media, the winner of the Hiscox digital innovation prize at last year’s Tech Track 100 awards) to raise more cash to fund their growth.