Almost 1,000 UK startups in trouble despite Future Fund support
Plexal research shows which startups are thriving and which need urgent support
The success of a few early-stage UK tech companies must not overshadow the struggles of the sector as a whole during the coronavirus pandemic, a startup incubator has warned. Nearly 1,000 early-stage businesses are in trouble, with 263 in administration and 707 in liquidation, according to research from tech hub Plexal. This is despite the government's Future Fund support package.
Plexal, in partnership with statistical platform Beauhurst, analysed nearly 30,000 of the country's startups and fast-growth businesses to understand investment activity since lockdown.
From 23 March to 27 April the total value of investments in UK tech increased by 34% compared to the same period in 2019, with a number of British startups managing to raise £663 million in the first month of lockdown.
However, the positive figures and increased activity within the market must not mask over bigger issues within the sector, according to Plexal.
"While the Future Fund is an excellent first start, it's clear that more is required to protect the businesses that have driven job creation and economic growth in the UK for the last 10 years," said Andrew Roughan, managing director of Plexal. "This research is designed to cut through the doom and gloom and speculation to see which parts of the startup ecosystem are thriving, and which need urgent support. "While tech startups have shown remarkable resilience in their ability to continue attracting investment, the success of the few mustn't overshadow the struggles of the wider majority of British startups." Roughan went on to suggest that if we don't act now to stimulate the market and ensure funding is distributed widely and quickly, a generation of startups and entrepreneurs could be lost. Plexal will continue to monitoring liquidations and early-stage rounds in the coming weeks and months so it can update its research on a weekly basis.
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