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i Scaleups2020 The Index Scaleup ii Scaleups Foreword 2020 marks the publication of the fourth edition of the ScaleUp Index, the only report that examines all the UK’s ‘visible’ scaleups in depth. Each year we seek to expand the analysis as part of our commitment to improving the quality of data that is publicly available on the scaleup community and this year is no diff erent. With the onset of the Covid pandemic in 2020 it has never been more important to understand who our scaleup growth champions are, as it is this community of scaleups who with the right support, will drive the UK’s economy forward in 2021 and beyond. Despite everything, as an ecosystem we should be very encouraged by the good news that with the concerted eff orts over the past fi ve years we have more scaleups breaking through the £10m+ turnover than ever before. In 2020 we now have 7,474 visible scaleups - a 37% jump year on year, with 250 more listed on the London Stock Exchange’s Alternative Investment Market (AIM). And pleasingly, the number of female founded visible scaleups has doubled in a year. The Index continues to map the state of the UK’s scaleups across sectors, geographies and more. In this year’s edition we have found: ● The overall number of visible scaleups has almost doubled since we fi rst published an Index in 2017 when we were able to identify 3,856 visible scaleups. ● For the fi rst time we have been able to analyse scaling events and have found that on average, 40% of scaling events are based on headcount and turnover; 41% are just turnover; and 19% are just headcount. ● Visible scaleups are found across sectors and across the UK with notable scaleup clusters outside of London in Leeds, Birmingham, Manchester, Glasgow, Edinburgh and Cardiff . ● Visible scaleups have shown resilience during the Covid-19 pandemic, with almost 80% showing indications of moderate to positive impact. Even more positively, 1,048 scaleups (14%) have created job opportunities throughout the crisis. ● £5.32b was invested into visible scaleups in 2019. ● There were 20 deals worth more than £50m accounting for £3.82b (72%) of the total invested amount. ● BGF remains the top investor in visible scaleups for the fourth year in a row, having made 124 investments worth £0.95bn since 2011, while Soft bank has invested the greatest amount (£1.85bn over 4 deals). ● The Index again reinforces the importance of Innovate UK grants to scaleups with £286m leveraging £5.2bn of private sector money, highlighting the ‘kitemark’ eff ect Innovate UK has in crowding in private sector backers to scaling businesses. ● Nine new investors have entered the top 20 list for investments into visible scaleups: Octopus Ventures, Notion Capital, Scottish Investment Bank, MMC Ventures, Parkwalk Opportunities EIS Fund, Passion Capital, Archangels, Cambridge Innovation Capital (CIC) and Angel CoFund. ● We have expanded our investor research to include business angels and networks given the key early stage role they play as investors in our scaling businesses. This report highlights their essential role with a signifi cant £2.4bn worth of investments made by angel investors to these visible scaleups since 2011. ● The Scottish angel syndicate Archangels is the top Angel investor into visible scaleups, having made 22 investments into visible scaleups since 2011. This shows the impact of this model. ● The total number of female founded visible scaleups has doubled in a year. And 52% of scaleups have at least one female c-suite member, up from 48% in 2019. The 2020 ScaleUp Index continues to show the breadth of the sectors these companies operate in; that they are scaling up and down the country; that they are more resilient to external shocks like the Covid-19 pandemic; and that they grow faster with the right kind of fi nance - whether it is private equity, public markets, or public sector grants. We must continue to support these companies because their growth adds billions of pounds to the UK’s economy and hundreds of thousands of jobs. Getting more scaleups to a £10m+ threshold should be a constant goal for us as we move forward. We are grateful for the continued support of our partners. Without this we would not be able to produce with Beauhurst such critical research that helps further the understanding of a vital segment of the economy. irene graham ceo, the scaleup institute 59,494 visible scaling legal entities examined 7,474 unique scaleup businesses 26,339 subsidiary companies excluded 1,877 acquired companies and acquirors excluded 7,145 parents and subsidiaries of listed businesses excluded 3,815 charities, trusts, CICs excluded 14,488 foreign-HQ, LLPs, financial vehicles excluded 59,494 legal entities that filed full accounts matched the OECD scaleup criteria in at least one three-year period in 2011 to 09/2020. This report has not looked at charities as their aims are materially distinct from those of fast-growing commercial enterprises. If a group has many scaling subsidiaries, only the single overarching business has been included. We exclude companies that began scaling only after being acquired, or only scaled due to making an acquisition. Listed companies are excluded for the majority of the report, except for in the final section which focuses on scaleups listed on AIM. We did not include companies that are part of a business headquartered abroad. We also excluded LLPs and financial vehicles. Note: Companies that have more than one reason for exclusion will be double counted in the exclusion figures above. reasons for exclusion About this report about this report This report examines ‘visible scaleups’ in the UK: a visible scaleup is a company that (i) meets the 20% OECD definition of a high-growth firm (see below) and (ii) files full accounts at Companies House. oecd high-growth firms All enterprises with average annualised growth greater than 20% per annum, over a three year period, with at least 10 employees at the start of the observation are defined as high-growth firms. Growth can be measured by the number of employees or by turnover. Companies that have grown because of mergers, takeovers and acquisitions are excluded. full accounts UK companies are only required to disclose their turnover if two of the following are true: • annual turnover exceeds £10.2m • assets exceed £5.1m • more than 50 employees Only companies that meet two or more of these criteria or those who have chosen to declare their turnover count as 20% visible scaleups. We look forward to the fulfilment of current policy recommendations making ‘invisible scaleups’ discoverable too. sectors The businesses in this report have been classified according to Beauhurst’s proprietary sector matrix and are tagged with as many sectors as are relevant. In this report scaleups operating in multiple sectors have been double-counted. acknowledgements We would like to thank the ScaleUp Institute for all of their support in the production of this report. visible scaleups (i) meet the 20% OECD definition of a high-growth firm (ii) file full accounts at Companies House 1 Overview 4 Types of scaling 5 Scaleups facing COVID-19 6 Scaleups tackling 21st century challenges 7 Investment 9 Beyond mega 10 Top investors 13 Investor type 14 Angel investors 15 Turnover growth demographics 16 Headcount growth demographics 17 Equity investment and turnover 18 Longest scaling companies 19 Grants 20 Top sectors for grants 21 Grants by region 22 Grants and equity Contents. 23 Company ages 24 Growth by age 25 Equity by age 26 Exports by age 27 People: Age 28 People: Gender 29 People: Nationalities 30 People: Employee distribution 32 Advisors 33 Regions 35 Local authorities 37 Local Enterprise Partnerships 39 Sectors 40 Top business and professional services sectors 41 Top industrial sectors 42 Top built environment & infrastructure sectors 43 Top technology sectors 44 Largest scaleups by sector 51 Directory 45 AIM Scaleups 2 OverviewMethodology announced equity investMent into visible scaleups top sectors by nuMber of visible scaleups top leps by nuMber of visible scaleups (excluding london) top visible scaleups by eMployee count top visible scaleups by turnover 59,494 visible scaling legal entities examined 52,020 legal entities excluded (chari- ties, PLCs, foreign HQ, dupli- cate subsidiaries) 7,474 unique scaleup businesses 2011 2012 2013 2014 2015 2016 2017 2018 2019 £5.32b £3.24b £5.55b £2.20b £2.48b £1.91b £0.84b £0.96b £0.90b Amount raised Number of deals 190 174 172 166 250 221 222 233 127 920 622 548 416 398 Property/land development and construction Other manufacturing and engineering Other business and professional services for businesses Distribution Food and drink processors (including quality control) 354 341 300 201 183 South East Leeds City Region Greater Manchester Enterprise M3 Greater Cambridge and Greater Peterborough OCS Cordant Group BestWay Wholesale Home Bargains 2 Sisters Food Group 77,701 39,513 29,172 22,816 20,746 Greenergy Sovereign Global ED&F Man Sunbelt Rentals Palmer and Harvey £16.8b £6.56b £6.22b £5.05b £4.44b 2 OverviewKey figures 01/01/2011 – 31/08/2020 top equity investors by deals into visible scaleups 01/01/2011 – 31/08/2020 visible scaleups in london by local authority visible scaleups in uK by local authority 7,474 number of visible scaleups £286m Innovate UK grants 493 female-led visible scaleups 1,550 visible scaleups using equity Camden 174 Westminster 371 City of London 303 Number of Scaleups 1 100+ BGF Growth Capital Index Ventures Crowdcube Balderton Capital Accel Octopus Ventures 124 53 52 51 41 41 50% scaling for 2+ years 31% scaling for 3+ years 3 Scaleups 4 Scaling Types of scaling. On average, 40% of scaling events are based on headcount and turnover; 42% are just turnover; and 19% are just headcount. age of scaleups and type of scaling achieved (1/11/2011 - 31/08/2020) <5 years 5 to 10 years 10 to 15 years 15 to 20 years 20+ years Scaled both headcount and turnover Scaled headcount Scaled turnover 31% 28% 29% 28% 23% 13% 18% 20% 20% 18% 56% 54% 51% 52% 59% “ Through our Goldman Sachs 10,000 Small Businesses UK program, we are proud to support the next generation of UK Scaleups and encouraged by their continuing success. Small businesses are vital to the economic recovery and as they navigate the challenges of COVID-19 it is more important than ever that entrepreneurs are supported to continue their growth journey.” Charlotte Keenan Head of the Off ice of Corporate International, Goldman Sachs 5 COVID-19 Scaleups facing COVID-19. Scaleups have shown resilience during the COVID-19 pandemic, with almost 80% indicating moderate to positive impact. Even more positively, 14% have created jobs throughout the crisis. the impact of covid-19 on scaleups 10% 12% 46% 21% 11% <1% covid-19 impact by amount of private investment received No fundraisings Less than £100k £100k to £500k £500k to £1m £1m to £5m £5m to £10m £10m to £25m Greater than £25m 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1,048 scaleups creating job opportunities throughout the crisis 0 scaleups have ceased operations as of yet Critical Severe Moderate Low Potentially positive Positive (Recovery) Beauhurst analysts have manually classified all visible scaleups based on the impact that Covid-19 is having on operations. Classifications are based on company websites, press coverage, social media and business model analysis. 6 ChallengesNAVENIO Oxford, South East Co-founded by Professor Niki Trigoni (CTO) and Tim Weil (CEO), this scaleup tracks the location and path of people in indoor environments using machine learning and smartphone data. It has partnered with a number of NHS trusts to improve safety and eff iciency in the face of Covid-19. In June, the company was awarded a £50,000 Innovate UK grant. FIRST MILE Islington, London First Mile is a waste recycling company, processing a variety of materials such as food, clothes and batteries. In July, the company launched a new personal protective equipment (PPE) waste disposal service to help organisations tackle the infl ux of Covid-19 related waste. Also in July, First Mile expanded its portfolio of London-based customers with the acquisition of waste and recycling collector Giraff e Recycling. FINNEBROGUE Downpatrick, Northern Ireland This County Down sausage and bacon producer is investing £25m in a new factory as part of a push into the plant-based food market. It is expected that the move will create 300 jobs, taking the company’s headcount to 1,200 by the end of 2021. The Environment Secretary, George Eustice, has praised Finnebrogue's investment. MAGTEC Sheff ield, South Yorkshire, Yorkshire and The Humber Founded in 1992, Magtec produces electric drive systems for a range of vehicle types, including off -road and military. In June, the business led a consortium of transport companies to win a £6m grant from the Advanced Propulsion Centre (APC) to support the creation of low-carbon transportation technologies. It is expected that the work will support another 65 employees at Magtec and an additional 165 across the region. Scaleups tackling 21st century challenges. 7 Investmentannounced equity investMents in scaleups (1/1/11– 31/8/20) Investment. Despite a number of megadeals (£50m+), 2019 fell slightly short of the 2017 record for total equity investment into scaleups. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (incomplete) Greensill £1.13b babylon £454m Deliveroo £449m OakNorth Bank £340m CMR Surgical £195m OVO Energy £200m £2.70b £5.32b £3.24b £5.55b £2.20b £2.48b £1.91b £0.84b £0.96b £0.90b 90 190 174 172 166 250 221 222 233 127 8 Investment166 announced equity deals £5.32b total raised £36.2m average deal size top scaleups by total aMount of equity raised in 2019 2019 Key figures sector Business banking and fi nancial services how much have they raised? £1.13b sector Mobile apps; Personal healthcare services how much have they raised? £454m sector Internet platform; Takeaways how much have they raised? £449m sector Medical instrumentation how much have they raised? £195m sector Business banking and fi nancial services how much have they raised? £340m sector Energy utilities services how much have they raised? £200m 166 announced equity investments were made into visible scaleups in 2019. The two largest deals were secured by Greensill, worth £615m and £511m. 9 Investmentequity investMents in scaleups by siZe (1/1/11 – 31/8/20) Beyond mega. There were 20 deals worth more than £50m in 2019, accounting for £3.82b (72%) of the £5.32b raised. <£500k £500k to £1m £1m to £2m £2m to £5m £5m to £10m £10m to £50m >£50m £15.13b £10.80b £0.81b £0.26b £3.05b £0.39b £2.38b 1,496 550 579 764 447 536 113 Deal numbers Amount invested Top figure 10 Investorstop investors by nuMber of equity investMents into visible scaleups (1/1/11 - 31/08/2020) Top investors. Of the 40 fi rms backed by the British Business Bank in 2019, 29 have invested in one or more visible scaleups since 2011. fund Manager nuMber of deals BGF Growth Capital 124 Index Ventures 53 Crowdcube 52 Balderton Capital 51 Accel 41 Octopus Ventures 41 Draper Esprit 38 Woodford Investment Management 35 Notion Capital 33 Seedrs 33 Scottish Investment Bank 32 MMC Ventures 26 Parkwalk Opportunities EIS Fund 25 IP Group 24 Lloyds Development Capital (LDC) 24 Passion Capital 24 Archangels 23 Cambridge Innovation Capital (CIC) 23 Angel CoFund 22 Touchstone Innovations 22 Active fund Inactive fund New entry to Top 20 “ British Patient Capital has now committed over £1 billion across 42 investments in venture and venture growth capital funds. With over 500 innovative high- growth companies in the underlying portfolio, we are proud to be supporting so many entrepreneurs with the ambition to build successful, world-class business. It is encouraging to see that in this year’s ScaleUp Index, almost 75% of the funds backing scaleup businesses are invested in by the British Business Bank.” Catherine Lewis La Torre, CEO, British Business Bank 11 InvestorsGreenoaks Capital Management £771m 4 T. Rowe Price £808m 3 Ribbit Capital £831m 11 Balderton Capital £908m 50 BGF Growth Capital £949m 124 Digital Sky Technologies £1,150m 8 Index Ventures £1,150m 53 Woodford Investment Management £1,340m 35 Accel £1,370m 41 Softbank Vision Fund £1,850m 4 Top investors. With 124 deals, BGF remains the top investor into visible scaleups by number of investments. Softbank takes the top spot by amount invested with £1.85b spread over four deals. top investors into scaleups (1/1/11 – 31/8/20) 12 InvestorsCambridge Innovation Capital £521m 24 Fidelilty Management & Research Company £523m 2 Draper Esprit £533m 41 Kinnevik £547m 3 Eight Roads Ventures £555m 17 Toscafund £568m 6 Clermont Group £571m 3 Technology Crossover Ventures £645m 5 CPP Investment Board £675m 1 Temasek £723m 5 Total number of investments Total value of investments Top figure “ This is a very promising and timely report on the performance, growth and motivations of scaleups against the unprecedented backdrop and economic challenge of the global pandemic. The UK is one of the world leaders when it comes to innovation, discovery and creativity – but that potential can only be driven by supporting the country’s scaleups. We are proud not only to be the most prolifi c investor in these companies, but also to have continued to build momentum and maintain our investment run rate throughout the pandemic. This has been enabled by our regional and decentralised model, allowing us to deploy capital quickly into businesses who are continuing on their growth journey. However, the UK urgently needs more equity capital if we are to drive the future growth of scaleups at large, and the economy more broadly.” Stephen Welton Executive Chair, BGF 13 InvestorsPrivate Equity and Venture Capital Angel Networks & Business Angel(s) Corporate 118 387 1,021 Investor type. Scaleups use a range of private equity finance options, dominated by venture capital and angels. 2011 2012 2013 2014 2015 2016 2017 2018 2019 0 20 40 60 80 100 120 140 Number of dealsAngel Network & Business Angel/s Corporate Private Equity and Venture Capital top private investor types by the number of announced deals into scaleups (1/11/2011 - 31/08/2020) announced deal numbers by top private investor types (1/1/11 - 31/08/2020) “ This year’s ScaleUp Index has identified the vital role that Business Angels have been playing in bringing both early stage equity and business experience to a significant number of the UK’s scaleups. Many of the Angel groups in our community have been specifically identified as making a considerable number of investments into businesses on their scale up journey, with Archangels topping the list with 22 deals into scale ups since 2011. This clearly shows the importance of angels and the need to increase the capacity of the Angel investment community to enable many more scaling businesses to benefit from early stage equity in all parts of the UK.” Jenny Tooth OBE CEO of UK Business Angels Association 14 AngelsArchangels Envestors Cambridge Angels London Business Angels TRI Capital Juno Syndicate Angel CoFund Mustard Seed Cambridge Capital Group Clearly Social Angels (CSA) 23 14 12 10 7 7 7 5 5 4 Angel investors. Scottish angel syndicate Archangels tops the ranking with 22 investments into scaleups since 2011. £283m total value of deals backed by angel networks £2.40b total value of deals backed by business angel/s investMent by angels and angel networK (1/1/11 - 31/08/2020) top angel networKs by nuMber of investMents into scaleups (1/1/11 - 31/08/2020) 15 Growth Turnover growth demographics. Correlation or causation; companies with higher turnover growth are more likely to have raised equity funding. turnover growth (1/1/11 – 31/8/20) 20-40% 40-60% 60-80% 80-100% More than 100% 80% 69% 61% 60% 61% 20% 31% 39% 40% 39% Did not use equity Used equity financing 16 GrowtheMployee count growth (1/1/11 – 31/8/20) 77% 68% 64% 64% 73% 23% 32% 36% 36% 27% 20-40% 40-60% 60-80% 80-100% More than 100% Did not use equity Used equity financing Headcount growth demographics. Headcount growth rate correlates with the use of equity finance up to 100% growth. It is rare for companies to grow their employee count by more than 100%. 17 Growthturnover growth rate by aMount of equity investMent (1/1/11 – 31/8/20) Less than £1m invested £1m to £5m invested £5m to £10m invested £10m to £20m invested £20m to £50m invested More than £50m invested 20-40%40-60%60-80%80-100%More than 100%20-40%40-60%60-80%80-100%More than 100%20-40%40-60%60-80%80-100%More than 100%20-40%40-60%60-80%80-100%More than 100%20-40%40-60%60-80%80-100%More than 100%20-40%40-60%60-80%80-100%More than 100%76%13%5%2%5%67%17%6%3%6%72%16%5%3%5%69%11%10%7%4%62%17%11%6%3%46%20%12%14%8% Equity investment and turnover. Scaleups that have raised more equity show higher turnover growth rates. 18 Growthspotlight scaleups sector Telecommunications services years scaled 10 years sector Business banking and fi nancial services years scaled 11 years sector Insurance services years scaled 10 years Longest scaling companies. GH Financials persists as the longest scaling company, having qualifi ed as a scaleup by turnover for 11 years. sector Agriculture and farming; Food and drink processors years scaled 8 years sector Supply chain; Transport operators years scaled 8 years sector Building materials; Plastics years scaled 8 years 19 Grants1,262 grants to visible scaleups £286m IUK grant funding £227k average grant size innovate uK grants to scaleups (1/1/11 – 31/8/20 ) Key figures (1/1/11 – 31/8/20) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (incomplete) £24.4m £36.3m £43.0m £45.9m £23.6m £34.3m £26.4m £31.0m £17.1m £4.3m Value of grants Top value Number of grants 31 114 168 139 188 101 164 143 103 112 Grants. Over £36m of Innovate UK grant funding went to visible scaleups in 2019 via 103 awards. This resulted in a record average annual grant size of £352,000. 20 GrantsMETHODOLOGY NOTE: As we fi nd new scaleups, we include their entire grant history. For example, this means a scaleup found in 2018 can cause the 2011 fi gure for grants awarded to scaleups to increase. The chart on the facing page therefore depicts all grants ever awarded to a company that has become a scaleup between 01/01/2011 to 31/08/2020. top sectors by nuMber of scaleups receiving innovate uK grants Top sectors for grants. Scaleups in manufacturing sectors remain the top recipients of Innovate UK grant funding, with automotive and cleantech emerging as focus areas. 316 141 141 118 95 88 83 80 73 63 Other manufacturing and engineering Other CleanTech Automotive Other hardware Other technology/IP-based businesses Research tools/reagents Other business and professional services Materials technology Other software Energy reduction technology 21 Grantsall grants to scaleups by region (1/1/11 – 31/8/20) North West £9.4m Wales £9.1m N.Ireland £2.3m West Midlands £32.6m South West £22.7m Scotland £24.4m Yorkshire and Humberside £17.9m East Midlands £18.3m North East £6.3m East of England £38.7m London £40.1m South East £64.6m 1 1 2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 7 8 9 10 11 12 £2m £65m 6 Grants by region. Scaleups in the South East have received £64.6m worth of grant funding since 2011— the most grant funding received by any region. 22 Grants£26.3b total equity investment into non-IUK backed companies £20.9m average amount raised in equity by non-IUK backed companies £5.21b total equity investment into IUK backed companies £24.4m average amount raised in equity by IUK backed companies NOTE: Innovate UK also off ers innovation loans for SMEs. A total of up to £50 million has been committed in fi ve initial competitions and a further two competitions will make £25 million available for business innovation projects. Grants and equity. On average, companies that win an Innovate UK grant raise more equity finance than those that just rely on equity finance. equity investMent into scaleups with and without iuK funding (1/1/11– 31/8/20) “ We welcome all the fi ndings in this years ScaleUp Index report and it is especially welcoming to see that this year despite the conditions brought about by the Coronavirus pandemic we have a 37% increase in scaleup companies over the previous year and that we are just shy of 7,500 visible scaleups in the UK. Especially welcome is that female founding scaleups have doubled this year, this is something to celebrate and follows closely the eff ect we have seen through Innovate UK’s Women in Business programme. Regionally we now have much more representation from scaleup clusters outside of London including clusters in the Devolved Nations.” Simon Edmonds Deputy Executive Chair and Chief Business Off icer, Innovate UK 23 Ageproportion of visible scaleups by age Company ages. Companies incorporated more than 15 years ago make up 72% of the scaleup population. <5 years 5 to 10 yrs 10 to 15 yrs 15 to 20 yrs 20+ yrs 11% 16% 16% 56% 1% “ The majority of visible scaleups have been trading for 20 years or more. 86% of these older businesses achieved scaling without the external investment available to the youngest generation of high-growth companies (p. 25). While an impressive achievement, this also alludes to an exciting future for scaleups, enabled by the increasing availability of public and private investment in the UK. We expect to see more scaleups and increasing growth among them, both for the emerging cohort of growing companies who will soon reach the £10+ turnover visibility threshold, as well as for older companies that may be fundraising for the first time.” Ava Scott Research and Consultancy Associate, Beauhurst 24 Ageaverage turnover growth rate by age of coMpany 20-40% 40-60% 60-80% 80-100% More than 100% < 5 years5 to 10 years10 to 15 years15 to 20 years20+ years< 5 years5 to 10 years10 to 15 years15 to 20 years 20+ years< 5 years5 to 10 years10 to 15 years15 to 20 years20+ years< 5 years5 to 10 years10 to 15 years15 to 20 years20+ years< 5 years5 to 10 years10 to 15 years15 to 20 years20+ years13%19%15%50%3%20%21%15%37%6%26%23%11%35%6%10%23%23%13%31%12%28%16%10%34% Growth by age. Companies more than 20 years old are most likely to have turnover growth rates of over 100%. 25 Age Equity by age. Older scaleups are the least likely to use equity finance. Introducing new shareholders becomes more di¬icult over time. proportion of scaleups using equity financing by coMpany age Did not use equity Used equity financing 10 to 15 years < 5 years 5 to 10 years 15 to 20 years 20+ years 63% 58% 72% 78% 86% 37% 42% 31% 22% 14% 26 Exports£11.3M £12.6M £22.1M £21.8M £6.5M <5 years 5 to 10 years 10 to 15 years 15 to 20 years 20+ years Exports by age. Nearly a third of scaleups declare overseas turnover. Scaleups that are more than 15 years old have the highest average overseas turnover. average overseas turnover by scaleups in 2019 28% of visible scaleups declared overseas turnover in 2019 27 People53 average age of scaleup directors People: Age 72% of directors are between 30 and 60 years old. age of directors at visible scaleups 27% 73% 99% <1% Director over 60 Director under 30 “ It’s been a tough year for all and yet I could not be more encouraged at the resilience of our scaleup companies or the ambitious tenacity of our SME community. Growth capital is available to the innovator, and on that note we’ve seen more and more rapid transitions from Series A to Series B funding rounds. It’s a very impressive performance all round that, despite the challenges of 2020, the number of scale-ups in this country is rising considerably, including poignantly those listed on AIM. Indeed, after completing AIM’s two largest IPOs this year we’re seeing AIM is proving a haven for high growth companies with ambitions to list publicly. I’m also particularly pleased that the number of female-founded scale-ups has doubled. At finnCap, through Ambition Nation, we continue to champion and support female leaders in business. We also recognise that environmental, societal and governance commitments are central to all scaleup investment decisions as we move forward and, with the help of our new ESG handbook and scorecard, we are dedicated to delivering our clients’ ambitions for a sustainable future.” Sam Smith CEO, finnCap Group Plc 28 People10% scaleup founders are female 493 female-led visible scaleups visible scaleups with at least one feMale c-suite MeMber visible scaleups with at least one feMale founder visible scaleups with at least one feMale director 86% 9% 5% All female founders All male founders Mixed founding team 39% 61% No female directors At least one female director 52% 48% No female c-suite members At least one female c-suite member People: Gender Female representation at the C-suite level and in directorships is improving, although founders remain predominantly male. 29 People People: Nationalities The clear majority of scaleup directors are from the UK. The most common origin nations among directors are the United States and Ireland. 22,090 number of directors from the UK 3,205 number of directors from outside the UK scaleup directors by nationality nuMber of scaleup directors by continent (excluding the uK) nuMber of scaleup directors by country (excluding the uK) Europe (excluding UK) North America Asia Oceania Africa South America 1,793 779 281 162 72 18 678 658 241 181 150 127 98 90 64 59 United States Ireland France Germany Italy Australia Netherlands Canada Spain South Africa 30 People People: Employee distribution Over 50% of scaleups employee more than 100 people. Almost 2 million people are employed by scaleups across the UK. scaleup population by nuMber of eMployees <5 employees 5-9 employees 10-24 employees 25-49 employees 50-99 employees 100-249 employees 250-499 employees 500-999 employees >1000 employees 23% 11% 31% 13% 2% 7% 2% 6% 5% 31 Scaleups 32 Advisors Advisors. BDO maintained its lead as top advisor this year, while Grant Thornton has moved into second place, followed closely by PwC. 248 198 174 154 153 103 97 74 60 49 47 42 42 42 40 BDO Grant Thornton UK PwC RSM UK KPMG Deloitte Mazars Ernst & Young Baldwins Audit Services Saffery Champness Nexia Smith & Williamson PKF Francis Clark MHA Macintyre Hudson Crowe UK Moore Kingston Smith top advisors to scaleups 33 GeographyheatMap of regions by nuMber of scaleups 1 1 2 3 4 5 6 7 9 10 11 12 2 3 4 5 7 8 9 10 11 12 North West 10% Wales 3% N.Ireland 3% West Midlands 7% South West 7% Scotland 6% Yorkshire and Humberside 7% East Midlands 6% North East 3% East of England 9% London 25% South East 14% 0 25% 8 6 Regions mapped. Although London is home to the largest proportion of scaleups (25%), it is less dominant here than among all high-growth companies, where 33% of all companies reside in the capital. 34 Geographytop regions by nuMber of scaleups Regions ranked. While London and the South East remain the top two regions for scaleups, the West Midlands has now overtaken Yorkshire and the Humber, and Wales has jumped above Northern Ireland. 1,842 1,057 729 701 554 541 507 443 437 229 224 208 London South East North West East of England Yorkshire and The Humber West Midlands South West East Midlands Scotland North East Wales Northern Ireland 35 Geographytop local authorities by nuMber of scaleups Local authorities mapped. The top three local authorities for density of scaleups are in London, with Westminster having the largest population of them all (371 scaleups). 4 7 8 3 300+ 11 13 14 15 16 17 18 19 20 1 2 3 5 6 9 10 12 36 Geographytop local authorities by nuMber of scaleups Local authorities ranked. Leeds, Birmingham and Manchester remain the top locations for scaleups outside London. Leeds 371 303 174 124 103 101 97 87 77 72 70 67 66 64 64 57 56 50 50 48 Westminster City of London Camden Southwark Islington Birmingham Manchester Tower Hamlets Hackney Bristol Hammersmith and Fulham Cheshire East Glasgow City City of Edinburgh Wycombe South Cambridgeshire Trafford Sheffield Cardiff 1 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 37 GeographyheatMap of leps by nuMber of scaleups (excluding london) Local Enterprise Partnerships mapped. Enterprise M3 and Greater Cambridge and Greater Peterborough have overtaken the South East Midlands and the North East for fourth and fifth most populated LEP. 35 300+ Number of visible scaleups South East 354 1 Enterprise M3 201 4 Greater Manchester 300 3 Greater Cambridge and Greater Peterborough 200 5 Leeds City Region 341 2 2 3 4 5 1 3 Geography Local Enterprise Partnerships ranked. Leeds City Region has jumped above Greater Manchester, while Coast to Capital has climbed from 9th place to 6th place. top leps outside london by nuMber of scaleups 354 341 300 201 192 186 183 181 170 South East Leeds City Region Greater Manchester Enterprise M3 Greater Birmingham and Solihull Coast to Capital South East Midlands Derby, Derbyshire, Nottingham and Nottinghamshire North East Greater Cambridge and Greater Peterborough 200 39 Sectorstop-level sectors by nuMber of scaleups Sectors. This year, Technology widened its lead on Retail as the fourth most populated top-level sector. 2,899 2,331 1,206 1,124 803 687 673 580 446 230 226 187 133 116 111 Business and Professional Services Industrials Built environment and infrastructure Technology/IP-based businesses Retail Supply chain Leisure and Entertainment Tradespeople Personal services Media Energy Transportation operators Agriculture, Forestry and Fishing Telecommunications services Craft industries 40 Sectorstop business & professional services sectors by nuMber of scaleups Top business and professional services sectors. Civil engineering services continues to be the most populated business and professional services sector. 338 325 292 209 207 189 184 168 155 131 130 130 123 123 109 Recruitment agencies and personnel supply services Business banking and financial services Civil engineering services Waste management services Consumer banking and financial services IT consultancy services Marketing services Analytics, insight, tools Security services (physical and virtual) IT support services Advertising and branding services Insurance services Design services Management consultancy services Outsourcing and shared services 41 Sectorstop industrial sectors by nuMber of scaleups Top industrial sectors. The Automotive sector has seen an increase in the number of scaleups, leading to a tie for third place with the Machinery sector. All sectors show an increase in the number of scaleups 622 398 236 236 229 128 116 109 105 92 91 87 69 68 67 Other manufacturing and engineering Food and drink processors (including quality control) Machinery Automotive Building materials Packaging and printing Household goods Clothing (including footwear and accessories) Furniture Other consumer goods Metals Electrical components Steel Healthcare products Aerospace 42 Sectorstop built environMent & infrastructure sectors by nuMber of scaleups Top built environment & infrastructure sectors. 62% of Built environment scaleups operate within the Property/land development and construction industries. 920 314 161 79 Property/land development and construction Other built environment and infrastructure Property/land management Property/land ownership and trading “ This year saw Technology widen its new lead on Retail as the fourth-most represented top-level sector by number of visible scaleups (p. 39). SaaS businesses accounted for just under 25% of all the technology scaleups with internet platforms and other soft ware businesses also dominant (p. 43). As more technology companies reach sizes where their revenues become visible, it will be interesting to see whether this sector can displace the established top three and come to dominate the UK’s scaleup population. Policymakers and investors need to start considering what ramifi cations the rise of technology scaleups will have for the UK economy.” Daniel Robinson Research and Consultancy Associate, Beauhurst 43 Sectorstop technology and ip-based sectors by nuMber of scaleups Top technology sectors. The top sector for Technology scaleups is Sofware-as-a-service (SaaS), followed by Internet platforms by a considerable margin. 274 175 154 109 75 74 72 66 57 55 41 37 36 33 30 Software-as-a-service (SaaS) Internet platform Other software Mobile apps Other CleanTech Other technology/IP-based businesses Pharmaceuticals Clean energy generation Other hardware Research tools/reagents Desktop software Internet and networking hardware Energy reduction technology Medical devices Mobile and wireless hardware 44 Scaleupstop scaleups in 2019 by turnover & eMployMent in top sectors 2 sisters food group sector Food and drink processors turnover £2.74bn 2 sisters food group sector Food and drink processors employees 20,749 marshall group sector Manufacturing and engineering services turnover £2.48bn places for people sector Property/land ownership and trading employees 6,256 uk fuels limited sector Fleet management and logistics soft ware turnover £1.55bn giant group sector Recruitment soft ware employees 2,513 sovereign global sector Business training services turnover £6.56bn the staffing group sector Recruitment agencies employees 18,087 Largest scaleups by sector. 45 AIM AIM Scaleups. Despite a decrease in the overall number of companies listed on AIM, the number of scaleups has increased from last year. 250 unique AIM scaleups 825 unique companies listed on AIM 224 foreign operating and financial vehicles excluded 645 companies incorporated in the UK 474 unique scaleup companies Companies require at least four years of annual accounts with sales or number of employees to determine scaling status. AIM typically attracts smaller companies than the main London Stock Exchange. 825 companies were listed on it at the time of analysis. Companies operating outside the UK and investment vehicles were excluded. Companies from outside the UK can list on AIM if they meet the requirements. This analysis only looks at UK- incorporated companies. “ This year it is more important than ever to recognise the contribution that scaling companies make to the UK economy as highlighted by the findings contained in the 2020 ScaleUp Index. As AIM celebrates its 25th anniversary, the data contained in the Index reinforces the important role that AIM plays in providing equity finance to ambitious companies. Already this year over £4.2bn has been raised on AIM by companies conducting IPOs and further issues and London Stock Exchange remains committed to ensuring that these companies have long term access to the equity capital and support they need to grow their businesses.” Marcus Stuttard Head of AIM & UK Primary Markets, London Stock Exchange 46 AIM4 4 4 3 4 4 4 5 5 6 8 14 Business and professional services for businesses Other software Business banking and financial services Analytics, insight, tools Software-as-as-service (SAAS) Online games publishing Automotive Mobile apps Other manufacturing and engineering IT consultancy services Property/land development and construction Recruitment agencies and personnel supply services top sectors by nuMber of aiM scaleups Companies delivering services for other businesses are the most common among AIM scaleups. Companies developing soft ware technology also occur frequently. 47 AIMnuMber of aiM scaleups Mapped by region London and the South East account for almost half of AIM scaleups. The North West and Yorkshire and The Humber are the third most populated, home to 9% each. 1 2 3 4 5 6 7 9 10 11 12 2 3 4 5 7 8 9 10 11 12 North West 9% Wales 3% N.Ireland 1% West Midlands 6% South West 6% Scotland 2% Yorkshire and Humberside 9% East Midlands 6% North East 2% East of England 8% London 30% South East 18% 0 29% 8 6 1 48 AIMnuMber of aiM scaleups and private scaleups by region 2% 1% 2% 3% 6% 6% 6% 8% 9% 9% 18% 30% London South East North West Yorkshire and The Humber East of England West Midlands East Midlands South West Scotland Wales North East Northern Ireland 3% 3% 3% 6% 7% 6% 7% 9% 7% 10% 14% 25% AIM companies Private companies Scaleups listed on AIM are more likely to be found in London and the South East than the wider scaleup population. 49 AIMAnnual turnover £500M + £100m to £500m £50m to £100m £25m to £50m £10m to £25m Less than £10m 31% 12% 16% 17% 20% 5% 20% 34% 24% 13% 8% 1% AIM scaleups Private scaleups turnover siZe of aiM scaleups coMpared with private scaleups (2019) AIM scaleups have a wider spread of turnover than private scaleups, with more companies bringing in more than £500m or less than £10m. 50 AIMlatest eMployee counts of aiM scaleups coMpared with private scaleups (2019) AIM scaleups tend to have more employees than private scaleups. Companies with 250 or more employees make up 47% of AIM scaleups, and 23% of private scaleups. 17% 15% 15% 21% 9% 9% 10% 3% 1% Latest employee headcount <5 employees 5-10 10-24 25-49 50-99 100-249 250-499 500-999 1000+ 5% 6% 12% 33% 24% 11% 6% 1% 2% AIM scaleups Private scaleups 51 Directory Scaleup directory. 52 Directory 53 Directory 54 Directory 55 Directory 56 Directory 57 Directory 58 Directory 59 Directory 60 Directory 61 Directory 62 Directory 63 Directory 64 Directory 65 Directory 66 Directory 67 Directory 68 Directory 69 Directory 70 Directory 71 Directory 72 Directory 73 Directory 74 Directory 75 Directory 76 Directory 77 Directory 78 Directory 79 Directory 80 Directory 81 Directory 82 Directory 83 Directory 84 Directory 85 Directory 86 Directory 87 Directory 88 Directory 89 Directory 90 Directory 91 Directory 92 Directory 93 Directory 94 Directory
