Two thirds of young tech companies planning to raise investment

Hiring talent still biggest obstacle for UK’s booming tech sector, with 80pc hiring staff despite ongoing Brexit turmoil.

Two thirds of early stage UK technology companies hope to raise investment, an increase of 7pc over the last three months.

And eight out of 10 (79pc) of young tech companies intend to hire more staff, up 6pc compared with when they were last surveyed back in June.

See also: UK fintechs raise on average £20m each in 2019, up one-third since 2017

However, the ongoing Brexit uncertainty has dented the confidence of UK tech startups (down 7pc to 73pc), with nearly three quarters (73pc) saying that a no-deal Brexit would be bad for their businesses.

Indeed, the majority of tech entrepreneurs (57pc) favour cancelling Brexit and remaining with the EU. Just over one in five (22pc) favour a second referendum and 11pc would like the UK to exit with a deal agreed. Just 8pc would prefer a no-deal Brexit.

And nearly 60pc of entrepreneurial tech businesses think Boris Johnson as prime minister will be bad for business, compared to 18pc who think his premiership will be positive.

Studio Graphene surveyed more than 100 young tech businesses for its third quarterly Tech Tracker survey.

Hiring the right talent remains the biggest challenge facing UK tech startups. Two thirds cited this as an obstacle to growth – 12pc more than in Q2. This was followed by securing private investment (53pc), increasing sales (47pc), keeping pace with competitors (27pc) and developing new technology (21pc).

Ritam Gandhi, founder and director of Studio Graphene, said: “While there has been a dip in confidence over the past three months, it’s important to note that the vast majority of tech startups are confident they will grow in the year ahead. What’s more, significant numbers are looking to take on more staff and raise investment, which is positive news for the private sector.

“That said, we cannot ignore the impact Brexit is having on entrepreneurs across the country, more specifically, the threat of a no deal. Business leaders need clarity and certainty over what the future looks like – a no deal Brexit cannot provide this. So, while cancelling Brexit seems unlikely, it’s hugely important Boris Johnson and his cabinet listen to the concerns of UK tech startups, ensuring these businesses are supported and their interests are protected as much as is possible.”

Further reading

Europe raises record-breaking €10.6bn of venture capital in first half 2019