Positive business outlook buoys UK tech startups
3rd May 2013 | 14:39
But Silicon Valley Bank survey also reveals funding woes
Over four fifths (83%) of UK technology startups anticipate positive business conditions in 2013, according to a survey of 125 executives conducted by market research firm Koski on behalf of Silicon Valley Bank (SVB).
According to the SVB's Startup Outlook Report 2013, 66% of survey respondents reported an improvement in business conditions during 2012 compared with the year before, and 73% met or exceeded revenue targets. Of UK startups earning revenue, nearly half expected their company to be profitable this year, compared with just 26% of their US counterparts.
Hiring is a key priority for UK based startups. Nine out of 10 survey respondents planned to hire this year and 77% said that finding workers with STEM (Science, Technology, Engineering and Maths) skills is critical to the success of their business.
Joshua March, Co-Founder and CEO of startup business Conversocial, says: "The tech scene in London has evolved dramatically since we started working on Conversocial in 2009.
"One of the most exciting changes is how much easier it is to hire great developers than just a few years ago. Undertakings like Silicon Milkroundabout and the Tech City initiative, backed by so much government and press support, have turned 'startups' into a viable career path."
According to SVB, however, the potential for growth could be hampered by difficulties obtaining for startups.
Startup executives said that reform of government initiatives would have a role to play in supporting their industry sector.
Of those surveyed, more than half (56%) called for greater access to government grants and funds designed specifically for startups, while 52% wanted to see tax reforms.
Bindi Karia, Vice President at Silicon Valley Bank said: "The tech startup sector is thriving, with one in five businesses beating their revenue targets for 2012, and another strong year predicted for 2013.
"The flipside is that many executives have concerns around how they should fuel the next level of growth, since access to funding and talent are cited as challenges for many startups. Nevertheless, these are exciting times for the UK tech scene. Executives are optimistic and working hard to develop the 'next big thing'".
Figures released by job search engine Adzuna in September last year showed that tech start-ups would have to pay a premium to land suitable graduates.
About 7,000 students graduated with computer science degrees in 2012 against a backdrop of just 2,967 tech startup jobs.