For a revealing insight into the UK’s booming technology sector, look no further than this year’s Sunday Times Hiscox Tech Track 100 league table.
Five of the companies, including last year’s top firm Ve Interactive, are ‘unicorns’ – privately-owned firms valued at over $1 billion. This year’s list also helps to debunk the myth that young tech firms don’t make money: over two-thirds of the companies made an operating profit in 2015/16, with an eye-catching average profit margin of 15%.
A quick comparison between this year’s list and the first Tech Track 100, published back in 2001 in the wake of the dotcom crash, shows how the UK’s technology sector has grown. The companies on this year’s list had a combined turnover of £2.2 billion in 2015/16 and employed 11,000 people, whereas the first Tech Track 100 firms had sales of £414 million and employed just over 5,000 staff.
And we know that the digital tech industry grew by 7.4% from 2008 to 2014, according to the 2016 Tech Nation report. So let’s hope the sector – one of the bright spots in the UK economy – is given all the help it needs to continue to flourish.
This year’s top spot is taken by UKCloud, which provides secure data processing, data storage and networking services to the UK government. Formerly known as Skyscape, it was top of last year’s ‘Ones to Watch’ list. Founded in 2011, UKCloud has sales of more than £32 million and has seen its annual sales rise by more than 260% in the past three years.
Top 10 Tech Track 100 companies 2016
UKCloud – cloud services provider
Roc Technologies – IT services provider
LoveCrafts – crafts communities platform
Immunocore – biotechnology developer
Smarkets – online betting platform
WorldRemit – money transfer provider
Semblant – liquid repellent nano- coater
Funding Circle – peer-to-peer lending
UNiDAYS – student verification service
Ve Interactive – ecommerce technology developer
On cloud nine
The transformation that cloud computing is having on everyday life is shown in the fact that over a quarter of the companies on this year’s list provide cloud computing services, including top firm UKCloud.
Epos Now, founded in Norwich five years ago by former bar owner Jacyn Heavens, offers cloud-based point-of-sales systems used by restaurants and shops, and helped one struggling shop featured on Channel Four’s “Secret Shopper” series to better monitor its sales and stock. Its technology has processed more than 5 billion transactions in 103 countries, and has recently opened an office in the US, as well as an app store.
Fairsail offers mid-sized companies cloud-based HR systems that enable them to hire, manage and better engage with their staff. Its sales have more than doubled in the past three years, and in May, accounting software giant Sage invested £10 million in the firm, in return for a 21% stake, illustrating how start-ups are showing big tech firms that the sky’s the limit when it comes to the cloud’s potential.
Room at the top for women
One of the most interesting aspects of the Tech Track 100 for me is its ability to highlight developing themes in the tech sector. One is the number of women now running, or owning, technology firms: this year, 11 firms on the index are run, while more than 20% are owned by women – up from 10 last year.
These include LoveCrafts, ranked third in this year’s list, which provides an online community for hobbyists in the UK, US and Europe. Founded by Cherry Freeman and two others in 2012, it expects to raise more venture capital funding in 2017, on top of the £18 million it has already received, to help it grow in the global crafts market, which is estimated to be worth $100 billion.
PrivateFly, set up by Carol Cork and her husband Adam Twidell in 2008, has been a big hit with jet-setting celebrities and pop stars, offering a choice of 7,000 privately owned jets to charter. Bookings hit £10 million in 2015, and the company set up a Miami office this year to support its fast-growing US market.
Ideal Networks, set up by Claire Hopkins and Moto Shakoori in Brighton in 2009, provides IT infrastructure to the likes of P&O Ferries and Ikea. It has grown by over 77% in the past three years and earlier this year created Ideal Academy, a partnership with local schools and colleges to promote careers in IT.
People who were behind other start-ups that have featured in previous Tech Track 100s founded a third of this year’s companies – evidence of a growing number of UK serial tech entrepreneurs. They include Simon Hansford, co-founder and chief executive of UKCloud, who previously set up Attenda, which featured on the Tech Track 100 in the early Noughties.
Also, David Martell, founder and boss of Chargemaster, the electric-car charging firm, who was also the man behind Trafficmaster. They’re proof that experience counts for a lot when it comes to creating and growing a thriving tech start-up.
Fintechs feature prominently
The UK has been among the leaders in the financial technology revolution, which has transformed the banking sector thanks to trailblazers like Funding Circle (eighth on this year’s list), and so it’s no surprise that this year’s Tech Track 100 features 13 fintech companies – the third-biggest sector after IT consulting and services and software. They include Zuto, the online car-loan specialist co-founded by former professional footballer James Wilkinson, and Paymentsense, which helps small firms process credit card payments.
We often see and hear about new and emerging technology trends but we as insurers don’t see those companies coming to market for insurance when we hear about the trend. It takes a couple of years for them to develop and then we see a surge in enquiries. That seems to be especially true for Fintech and we are seeing the number of enquiries increase rapidly this year.
It is great to see such a thriving and diverse Tech Track 100 list in 2016, a year of potential uncertainty. With 51 new entrants, and a resurgence of manufacturing-led businesses (high-tech manufacturers make up one in 10 of the companies on the list) it really shows how UK tech firms can successfully adapt to the challenges ahead. The technology sector will likely remain critical for UK Plc, and it is fantastic to know that companies like those on the list are leading the charge to protect the country’s position as a global technology hub.
View the full Sunday Times Hiscox Tech Track 100 league table 2016