Five UK tech scale-ups most likely to succeed
The acceleration of digital adoption by both businesses and consumers across nearly all sectors of the UK economy is proving a boon to UK technology companies. Many of them are emerging quickly from initial seed fund and startup status into fast-growing and successful scaleups.
The ScaleUp Institute’s 2020 report revealed that these high growth companies remain the most innovative and international of the UK’s SMEs. In 2018 they contributed £1trillion to the UK economy — accounting for 50% of the total contribution by all UK SMEs. They are 54% more productive than their peers.
Scaling up demands that companies grow quickly enough to maintain momentum but not so fast that they corkscrew out of control. Hampleton Partners’ technology M&A analysts highlight five UK tech scaleups that look set for continued success, three of which have used carefully targeted acquisitions to fuel their growth, giving them rapid access to cutting-edge technology, expertise, new markets, or all three.
1 Insurtech Zego
London-based on-demand insurance platform, Insurtech Zego provides pay-as-you-go insurance for drivers and riders. It means mobility service providers can offer a range of policies from minute-by-minute insurance to annual covers. The company gives customers greater flexibility than traditional insurers, with pricing based on usage data from vehicles.
In 2019, Insurtech Zego became the first in the UK to gain its own insurance licence. Last year it bought Drivit, which turns smartphones into telematics devices; and partnered with Broker Network and Compass Networks to gain access to 60% of the UK’s independent broking community. It also agreed a deal to cover all of the UK escooters belonging to TIER, which holds 20% of the global e-scooter rental market and operates in 70 cities.
In March 2021, a $150 million investment round valued Insurtech Zego at $1.1 billion. The funds will be used for its global expansion, product development and growth in existing markets. To date, Zego has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries. It has raised over $200 million in total VC funding.
People increasingly demand flexibility and convenience in every sector, and vehicle insurance is no different. The way drivers use vehicles is undoubtedly changing, and the traditional model of insurance needs to change too.
Europe's fastest-growing company in 2020, Hopin enables brands and communities to create all-in-one, live experiences. Attendees can learn, interact and connect with people globally via live virtual, hybrid and in-person events. Its clients include the United Nations, Apple and Spotify.
In August 2021, Hopin announced that it had raised approximately €380 million in a Series D funding round. Since February last year, when it gained a place on Europe's unicorn list, the company has raised more than €844 million.
Hopin has a good chance of sustaining growth even as people return to physical venues. This year, it has already made five acquisitions: it has become an all-in-one event management platform with the acquisition of event technology solutions provider, Boomset; enhanced its event marketing suite with the purchase of Attendify; and boosted its online video capability with the acquisition of video hosting service, Streamable, video technology company, Jamm, and live streaming studio, StreamYard.
Hopin isn’t resting on its laurels and understands the value of acquisitions to accelerate its growth and product and service offerings.
For free access to Hampleton’s latest M&A Market Report on Digital Commerce and service providers: https://www.hampletonpartners.com/reports/digital-commerce-report/
University of Cambridge spinout, Darktrace uses AI-powered machine learning to detect and counter cyber threats for businesses across the world by identifying behavioural anomalies. It was the first company to develop an AI system for cybersecurity purposes. Since launching in 2013 it has released numerous technologies, including Darktrace Antigena, an autonomous response technology that reacts to cyber-attacks in real-time.
The company has secured £173m across nine funding rounds and doubled its customer base in 2020, with major growth across Asia Pacific. In April 2021, Darktrace had its IPO, raising £143.3m through the listing.
The pandemic has accelerated the shift to digital and is likely to create new opportunities and markets for DarkTrace as companies scale up their operations to meet demand, with cybersecurity an ever increasing priority not only in the office, but for remote workers too.
For free access to Hampleton’s latest M&A Market Report on Cybersecurity: https://www.hampletonpartners.com/reports/cybersecurity-report/
Founded in 2012, Checkout.com is now one of Europe’s top online payments processors, helping merchants including Deliveroo handle online transactions, and connecting them with card providers such as Visa or Mastercard in over 150 currencies.
The company secured a record $230m Series A funding— the largest of its kind in Europe, taking it to unicorn status — and last year it announced that it had raised funds again at a $5.5bn valuation, boosted by a tripling of transaction volumes during the pandemic. It was also named 'Scaleup of the Year' at the 2020 London Business Awards.
Last year the company made its first acquisition in French payment company, ProcessOut, and this year it acquired Estonian software development company, Icefire, whose 110 technology engineers have been integrated into Checkout.com’s global technology teams, giving it the capability to speed up the delivery of key products and features.
The growth in online shopping, coupled with the demand for secure and seamless ecommerce — and the relatively untapped potential for social commerce — puts checkout.com in a strong position.
BenevolentAI combines advanced AI and machine learning with leading edge science to decipher the complex biology of diseases, discover new treatments and develop new drugs. It aims to speed up scientific discovery through mass analysis of scientific data.
The company has evolved from a traditional drug-discovery company to a healthtech company, and was the third British startup to ever achieve unicorn status (following Zoopla and JustEat). It has raised £246m across six rounds to date.
BenevolentAI entered the Future 50 accelerator last year and is due to graduate in 2022. It featured in The London Tech 50 and the Alantra Pharma Fast 50 in 2020, and now numbers over 280 employees in London, Cambridge, and New York.
In July 2021, BenevolentAI appointed experienced biopharma executive, Dr François Nader as Chairman, bringing late-stage, high growth expertise to its board. Dr Nader's most recent operating role was as President, CEO and Executive Director of NPS Pharma, ultimately engineering the company’s sale to Shire in 2015.
Healthtech has huge potential, and we have only scratched the surface of what AI can do. BenevolentAI is well-placed to lead the way.
For free access to Hampleton’s latest M&A Market Report on Healthtech: https://www.hampletonpartners.com/reports/healthtech-report/.
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Read other parts of this series:
Part 2: Five UK tech scaleups most likely to succeed