The tech sector has proven resilient in the face of the pandemic as evidenced by the continued upward trends in investment levels, M&A volumes and employment statistics. The importance of the sector is not lost on Rishi Sunak and the Budget clearly recognises the role that tech scale-ups have to play in our economic recovery.
Here is a high level round-up of what the budget means for tech scale-ups:
- Funding – Building on the success of the ‘Future Fund’ as a means of providing scale-ups with access to capital during the pandemic, the new “Future Fund: Breakthrough” provides a further £375m of capital to support innovative and R&D intensive scale-ups with the British Business Bank co-investing in funding rounds of over £20m.
- Exit – Rishi Sunak expressly referenced Lord Hill’s review of UK listings and stated that he looks forward to working with the FCA on the implementation of its recommendations. We want and need tech businesses to access public markets in the UK and the proposed “dual class” share structure allowing founders enhanced voting rights and greater control is key to achieving that. See the attached link for further information on Lord Hill's review (Listing Review Jumping on the Bandwagon or....).
- Talent – The announcement of a fast track ‘Scale-up stream’ as part of the new elite points based visa process is a recognition that attracting talent and filling the skills shortage is key to the sector’s success.
- Support – The Help to Grow programme is set to provide free digital training and a 50% discount on the procurement of certain ‘productivity enhancing’ software.
- Environment – The Budget outlines support for the development of green energy innovation schemes as part of the £1 billion Net Zero Innovation Portfolio, the launch of a £20m programme to support the development of floating offshore wind technology and a £68m competition to implement new energy storage prototypes or technology demonstrators. Good news for clean-tech scale-ups developing carbon cutting technologies.
In summary, there is plenty here for the tech scale-up community and a clear appreciation of its importance to the future of the UK economy and it is particularly good to see the whole business lifecycle being addressed with access to capital, operational support and routes to exit all referenced. The direction of travel is welcome, let’s hope that the practical implementation is too.