The Covid-19 pandemic was, unsurprisingly, the main theme of Computer Weekly’s 2020 startup coverage. From problems securing government bailout loans to the collapse of veteran players in the ecosystem, UK tech startups have been hit hard by the pandemic and subsequent lockdowns.
This is especially true for early-stage startups, where they struggle to raise investment year-round and are often locked out of access to government loans. In the year The problems faced by these companies in September 2020 reached a record 1,067 startups filed for administration, liquidation or dissolution since the lockdown began on March 23.
Despite the challenges faced by start-ups, some positive trends have emerged, such as increasing investment in net-zero and reproductive technologies. On top of that, several startups Computer Weekly spoke to focused on building tools to help people protect and use their privacy online.
1. More than 80% of UK startups are not eligible for the Future Fund’s coronavirus loan
On April 20, the UK government announced a £250m Futures Fund loan program to support start-ups and small and medium-sized companies during the pandemic. According to the original headlines, however, enterprises can only qualify if they are unregistered companies in the UK and have raised at least £250,000 in equity investment from private and third-party investors in the last five years.
According to data obtained by Computer Weekly from Dealroom.co, only 5,000 startups have raised £250,000 or more in the past five years. In the UK, there are around 30,000 start-ups in total, meaning 83% of enterprises were ineligible for a Futures Fund loan.
While leaders in the tech startup ecosystem are positive about support for startups, many early-stage companies continue to struggle year-round due to a lack of support.
2. Machine learning startups will help people learn to forget GDPR
Although the General Data Protection Regulation (GDPR) has certainly increased people’s awareness of their digital rights since its introduction in May 2018, there is still a lack of specific tools and methods to enable people to exercise them more easily.
Focused specifically on the GDPR’s right to be forgotten, machine learning startup My uses a “snooty” algorithm to monitor people’s email inboxes, cross-referencing subject line information with company privacy policies to determine exactly what data it contains. User, without needing to access the actual content of emails.
As of this writing, Mine has analyzed the privacy policies of more than four million digital services to understand what data it collects from users. While developing the app, I realized that the average user has 350-400 companies in their digital footprint, 80% of which the user interacts with only once.
Once users know where their data is, My Auto helps them answer forgotten rights requests by submitting them to the companies with the click of a button.
3. Early stage startups struggle to secure funding
In the year Despite the challenges faced by tech start-ups in 2020, they have managed to attract £663mn worth of investment in the month since the start of the coronavirus lockdown, most of them in fintech, artificial intelligence, digital security or blockchain startups.
By the end of May, this figure was over £1bn, but while overall investment was high, it was heavily concentrated in a few hands.
Only 5% of the funding received by tech start-ups went to companies raising initial investment, meaning early-stage tech startups received just £52m.
On average, this meant that investors were giving these companies less than £1m per funding round. In turn, the total cost per startup was reduced by 83 percent.
4. Hidden interest in reproductive technology
It’s clear the pandemic has fueled interest in healthcare technology, but a market analysis from July found that since 2014, billions have been invested in four health tech subsectors — $2.2 billion in fertility tech startups, $4.4 billion in cannabis tech companies, $4.5 billion in telemedicine firms and $7 billion in developing medical records systems.
Looking at the total number of deals in each sub-sector, the study found that each has seen an almost continuous increase in the number of deals made each year. Of the four, investment growth has been the most consistent for fertility-related technology startups.
“The trend is clear to see. “As fertility rates decline, demand for fertility treatments increases, but not everyone who needs treatment can afford it,” said Kamran Adel, an early stage investor in Octopus Ventures’ Future Health Group.
“We see a huge opportunity in the coming years, with new technologies and services that are cheaper and more scalable, new treatments. Ultimately, this offers a huge opportunity to change patient outcomes and should make childbirth more accessible to all.”
5. TechHub was forced into administration by the Covid-19 pandemic
In early August, TechHub, a self-proclaimed global community for tech entrepreneurs and startups, went into administration due to a significant drop in revenue caused by the pandemic.
In 2010, the company that offered workplaces in London’s silicon hub and provided tailored support to develop startups and entrepreneurs. Launched in 2010 and used by over 5,000 companies, it plays an important role in London’s startup ecosystem.
Founder and CEO Elizabeth Varley said the company’s London operations were operating at “full capacity in February this year” but lost three-quarters of its revenue between August 1, when the UK lockdown began, and March 23.
In an effort to stay afloat, TechHub draws up a plan from stakeholders – funders, consultants, employees and so on – to explore the risks of the pandemic, but this is rejected by the landlord. He said.
6. Comms startup Element helps enterprises secure communications during the pandemic
Video conferencing and other communications technology companies have done well during the pandemic because of the proliferation of remote work. One of these is British comms startup Element, which uses an open-source, decentralized network known as Matrix to help enterprises securely exchange real-time information during the outbreak.
Unlike centralized systems where all users are connected to a central network owner or server that controls the data, Matrix’s decentralized approach means that only devices involved in the conversation can decrypt the data.
The main difference between Element and other messaging services is that users can connect to servers of their own choosing, giving them more control over how their data is stored and shared.
“On our side, we’re trying to build the ecosystem with Matrix – it’s something that’s long-term and we think it’s better to have a much larger ecosystem with more companies adding value to it.” [rather] Instead of lots of little silos fighting each other over who will be better in the next few years,” said Matthew Hodgson, CEO and Chief Technology Officer.
7. The UK leads Europe with zero venture capital investment.
A survey by TechNation in September found that the UK leads Europe for venture capital in net zero technology companies working to reduce carbon and other greenhouse gas emissions.
Net Zero Companies They earned £336m in 2019, a 28% increase on the previous year, while French and German net zero companies earned £216m and £283m respectively.
To support the “pioneership of sustainable technology companies” and accelerate growth, TechNation has developed a government-backed Net Zero Scale program and recruited a portfolio of 30 companies that it believes can help the UK achieve its goals. Net zero greenhouse gas emissions by 2050.
8. The number of broken records of beginners in September
Shortly after TechHub went into administration, it was revealed that 1,067 startups had filed for administration, liquidation or dissolution since it was locked down on March 23.
Of these, 273 were fast-growing companies in September alone—a 181% month-on-month increase from August—the biggest single-month drop in startups in a decade.
According to Plexal’s managing director Andrew Rowhan, in the first months of the outbreak, the government’s various support schemes artificially held documents, but by the end of the summer, the results were decreasing.
“The government has surprisingly given a lifeline to many startups at the edge of the crisis,” he said. But despite a gradually improving funding picture, we are only now beginning to see the impact of the pandemic on UK businesses – particularly early stage start-ups.
“Government support has artificially kept companies afloat and delayed the real impact. We are only now starting to see a more serious blow to UK start-ups, threatening the survival of all new companies.”
9. Tim Berners-Lee’s startup launched enterprise-grade privacy-enabling technology.
Inrupt, founded by World Wide Web inventor Tim Berners-Lee, unveiled an enterprise-grade version of decentralized web technology that allows businesses and government organizations to build applications that give customers and users greater control over their personal data.
The story looks at how a number of early adopters, including Salford Royal NHS Foundation Trust, the Government of Flanders and the BBC, have been using Inrupt’s robust privacy platform, which allows users to choose how and where their data is stored. One can access it using private online data repositories.
CEO John Bruce told Computer Weekly at the time that unlike an arrangement between users and application developers, where all kinds of data are released without permission for the company’s profits, Solid will help create a more “inclusive capitalism” where people are more involved. How information about them is used.
10. Look at the growth of ‘impact startups’ investing
On top of the news that the UK is leading Europe in net zero investment, another positive development in 2020 is a tenfold increase in investment in UK tech startups addressing one or more of the UN’s Sustainable Development Goals. In six years.
Also known as “impact startups”, these firms raised €1.4bn between January and October, with cleantech and climate technology companies raising most of the capital.
TechNation’s Head of Insights, George Windsor, said: “The influence of UK tech companies has grown leaps and bounds over the past six years, and UK technology must continue to play a key role in tackling some of the world’s most pressing challenges, including climate change.”