UK heading for Unicorn boom post-pandemic
The last 18 months has provided every aspect of society with an unprecedented challenge, not least to small firms and founders. The response of this section of business, however, has been nothing short of inspiring, with nearly 800,000 new firms incorporated in 2020. The response of the investors who back them has been equally stirring, with new figures showing that small firms received a record breaking £8.8 billion worth of equity investment last year.
This combination of entrepreneurial ambition and investor appetite has led many to look to the future and what the impact will be over the next few years. Since 2012, the average time it took from founding to Unicorn status was a little under four years, which points to a potential boom in the number of Unicorns in the UK in around 2024.
But with a return to normal fast approaching, is this trend set to continue or run out of steam? In our latest research, we found that this may be just the start. The data revealed that 13% (4,245,000) of Brits are planning to start a business in 2021 and fortunately, 16% of investors are set to back startups and small firms. Overall, our research indicates that 2021 could be an even bigger year for startups and SMEs in the UK, with £4.5 billion of equity investment in the first 3 months of the year alone.
The past year or so has signalled a step-change in the way we view startups in the UK, with trust in large firms dwindling and the trust for entrepreneurs and self-starters growing rapidly. We all know someone who has taken the plunge into business as a result of furlough and lockdown and I don’t doubt that many have started on a path toward Unicorn status.
This desire to startup and go it alone looks set to continue in 2021 and beyond as the drive to support small firms grows from the point of view of both consumers and investors, as our research shows. This is also true of what we have seen at IW Capital, investing in a number of innovative growing businesses throughout the pandemic with the support of our investor base.
The 20s could well be the decade of the startup and the Unicorn, perhaps it will be a few years before we see the true impact of this, but encouraging entrepreneurship and investment should be at the heart of the UK’s economic recovery. Extending schemes such as the Enterprise Investment Scheme (EIS) could be a great way to boost this, as several companies receiving investment through EIS have now gone on to achieve Unicorn status.
CEO of IW Capital, Luke Davis, recently commented on this topic in an article about London heading for a post-pandemic unicorn boom in City A.M. To read the full article, visit: https://www.cityam.com/golden-year-for-startups-london-may-be-heading-for-a-post-pandemic-unicorn-boom/
To find out more about IW Capital, or for more information on investment and non-executive opportunities, please speak to a member of the IW Capital team today on 020 7015 2250, or email info@iwcapital.co.uk