Startup growth figures encouraging for early-stage investors

Over the past six years, 500 of the most successful startups created in the UK have grown by nearly a third (30 per cent) each year, new research shows.

According to the report, published by analysis by SyndicateRoom and Beahurst, those that went on to IPO (initial public offering) grew at an even faster rate of 43 per cent.

Fintech businesses have however shown the greatest growth, achieving a compound annual growth rate calculated at 63 per cent. Transferwise, one of the most high-profile fintech businesses, was found to be growing at a faster annual rate than any other startup (183 per cent per year).

One of the worst performers, however, was education technology startups with an average growth of six per cent.

Chief Executive and co-founder of SyndicateRoom, Gonçalo de Vasconcelos, says: “This cohort was worth just shy of £1.6 billion in 2011, grew to £8 billion in 2016 and now, just one year later, I’m delighted it is valued at over £10 billion.

“What’s more, the cohort has returned over £3.7 billion to shareholders, demonstrating the long-term profitability of early-stage investing.”

The report also shows that while 73 of the startups exited via an IPO or M&A, the same number failed (31 of them in 2017 alone), demonstrating that while early-stage investing can yield profitable returns, like any other investment, those returns are never guaranteed.

The UK offers some tempting tax incentives to support innovation and startup businesses, such as Entrepreneur’s Relief, Research & Development (R&D) tax credits, Enterprise Investments Schemes, and more.

At Beavis Morgan, we specialise in working with startups and entrepreneurial people across a wide range of sectors, providing guidance and strategic advice to help in formulating plans for your business in order to strengthen its prospects of success, achieve growth and maximise wealth.

If you would like to find out more about how we can assist you and your startup business, or to discuss how any of these tax incentives could benefit your business, contact Steve Govey or your usual Beavis Morgan Partner.