A London Stock Exchange (LSE) report published today shows more than 100 of the 1,000 fastest-growing SMEs in the UK are tech companies, providing further evidence that the UK technology sector is an increasingly important component in the UK economy.
The report, 1,000 Companies to Inspire Britain, features 105 technology companies, including the likes of Edinburgh-based travel firm SkyScanner, game developer Mind Candy and music streaming provider Omnifone.
The fact that over 100 sectors are represented in the report, from architecture and automotive to venture capital and wine, is further testamont that the UK technology sector is in good shape.
"Global demand for the latest gadgets and devices is powering the British tech industry and creating big opportunities for digital businesses with bright ideas," reads the report.
However, the tech sector still follows other industries such as manufacturing, which has 193 companies on the list.
Joanna Shields, CEO of the Tech City Investment Organisation (TCIO), said: "In the last three years, a large number of policy changes have ensured businesses, and high-growth tech businesses in particular, can flourish in the UK. The result is that we now have one of the world’s most ambitious packages of incentives and policies for entrepreneurs and their investors.
Indeed, the area around London's Old Street roundabout, also dubbed Silicon Roundabout or Tech City, is now home to more than 1,500 digital companies, up from 200 only three years ago. Meanwhile, the LSE estimates there are some 270,000 digital companies in the UK, considerably higher than the government's 167,000 estimate.
"We’re working with 13 technology clusters nationwide, ranging from established centres of innovation such as Cambridge, to Manchester, home to one-tenth of the UK’s IT workforce, and Sheffield, which has an amazing engineering talent base," said Shields. "These clusters are becoming the driving engine for regional growth, creating a ripple effect in their cities and helping other businesses expand and grow.
The average revenue for companies on the list is £37.1 million, while the average revenue growth over the last three years is 82 percent.
Justin Cooper, CEO of Shareholder solutions, Capita Asset Services, said: “A sure sign that the British economy is recovering can be seen in the number of new IPOs, particularly on AIM, highlighting both the success of these companies and investors’ renewed confidence in them.”
However, there are still signs that fast-growing tech companies are shunning London's stock markets and IPO'ing in New York, where many believe they can raise more money.
LSE CEO Xavier Rolet said: “Working with the government and the wider financial community, we need to foster an ecosystem that promotes the right type of funding for businesses at each stage of their journey, so that together, we can drive our own prosperity.”
The report was compiled and audited by Growth Intelligence, a UK software company specialising in monitoring the real-time data footprint of UK companies.
In order to be considered for inclusion in the report, companies had to meet a range of criteria. These included being UK based, having a turnover of between £6-250 million in the last 12 months and a minimum of three years in operation. Companies also had to demonstrate not only a positive growth in revenue over the last four years, but also an increase in employee numbers, workspace, contract wins or patent filings.