During ‘normal’ times, high-growth companies play a crucial part in developing an economy and supporting job creation. But it’s fair to say these are not normal times – pictures a few weeks ago of Royal Navy ships patrolling the waters around Jersey (hopefully) confirmed that fact. To get through the challenges of Brexit and COVID-19, entrepreneurial spirit must be encouraged – a culture supporting growth nurtures businesses as they develop from start-up and grow revenue, profits and employment. This will be fundamental to the UK, boosting the economy and helping to shape the technologies of the future. Success will breed success.

 

My colleagues at Beauhurst recently identified the 12 fastest-growing start-ups and scale-ups in the UK, out of the 32,000 businesses we track. There are myriad ways of classifying growth – and indeed start-ups and scale-ups. In this instance, we looked at private companies that have used equity investment to fund their expansion – as measured by the increase in turnover from 2019 to 2020. 

 

This research identified a broad range of businesses in terms of both size and sector – from a veterinary surgery to fintech companies to a supplements manufacturer. 

 

Perhaps unsurprisingly, tech dominated. That said, the biggest wasn’t a tech company – green energy provider Bulb had turnover of £1.52bn last year. It has raised £65.3m – £60m of that in 2018, at a pre-money valuation of £351m. With its sustained sales growth since, it’s likely the next funding round will confirm it has reached unicorn status. 

 

The smallest, Insurwave, is a venture-stage software business, whose turnover was £239,000 last year (up 119% on 2019). It has raised £9.2m over three funding rounds since it was founded three years ago. Insurwave is the youngest company on the list. 

 

The oldest company was founded more than 10 years ago – Wigan-based Challenge-trg Group, which provides temporary staffing, training and haulage services to the logistics and warehouse sector. 

 

Even the amount of external financing varies: from £110,000 (Manchester-based Yumi Nutrition, which produces chewable supplements and vitamins) to £164m (fintech start-up and challenger bank Capital on Tap, which provides an online service through which SMEs can obtain credit cards and loans). 

 

Together, the 12 companies have raised £466m of external funding, from 45 different funds across 58 rounds of investments. Interestingly, 27 of those funds are based in the UK and 18 are from outside the UK. It is, of course, excellent to see these investments translating into substantive growth for the company – and indeed the economy.

 

It bodes well given that, following 2020’s tumult, the first quarter of 2021 has already proved to be a record-breaker. An astonishing £5.2bn was invested in UK start-ups and scale-ups in the first quarter of 2021, across 647 funding rounds, secured by 641 UK companies. The previous quarterly records – £3.4bn invested in Q4 2019 and 571 deals announced in Q4 2020 – were both blown out of the water. 

 

However, we need to be very clear that these 12 fast-growing companies don’t rely solely on private capital investment to fuel their growth. One company – Panaseer – received a £5,000 grant from Innovate UK when it was less than a year old; two of the companies have made acquisitions; and three have been members of accelerator programmes. 

 

A not-insubstantial 16,672 UK companies have received an innovation grant, the vast majority (some 14,645) from Innovate UK. The rest have been awarded by the EU Horizon 2020 programme, or by programmes run by the UK’s devolved administrations, among a handful of others. It really is the case that public and private capital need to work together to support early-stage innovative companies.

 

Henry Whorwood, head of research and consultancy, Beauhurst, a publisher of data and analysis on UK high-growth and ambitious companies, and a member organisation of the Corporate Finance Faculty