We are delighted to be part of the British Patient Capital programme as they announce a £30m investment in Draper Esprit
UK and European tech start-ups are being starved of the growth capital they need to scale up and become the Googles, Facebooks and Amazons of tomorrow.
Although Startup funding in the UK is in abundance, with seed and series A round sizes increasing over the past 5 years, as stated within last November’s HM Treasury’s ‘Financing growth in innovative firms’ report, the UK is lagging in its ability to scale start-ups into high achieving companies, with the report going on to conclude that there are comparatively less young, large listed companies in the UK compared to the US.
As a result, UK and European tech start‐ups who are crying out for the capital they need to scale up aren’t making that jump to the next stage.
Consequently, it comes as no surprise that, in data released from the Organisation for Economic Co-operation and Development (OECD), the EU’s share of late‐stage investment has decreased from 62% to 43%, totalling 0.01% of the EU’s GDP contribution to total late‐stage investment amounts.
The result? A lack of growth capital at precisely the time it is most needed by those firms looking to grow and establish their businesses, despite the fact that there is a wall of institutional money that is crying out for further investment in technology companies given the dearth of IPOs in the tech sector.
We took the decision to list our business on the stock market back in 2016 to address both of these issues, providing entrepreneurs with the financing they need to grow their companies and investors with an alternative way to play high growth tech firms. Since then, we’ve backed 22 businesses, investing £140m in high growth firms spanning everything from electric car charging points and employee engagement platforms, through to digital healthcare providers and fintech businesses.
In each case, we’ve backed brilliant management teams that have been attracted to the fact that, unlike other venture capital firms, we’re not tied to the usual five‐year cycles of investment.
Today’s decision by the British Business Bank to launch a £2.5bn British Patient Capital programme that will see them enable investment in innovative, high growth companies across the UK is a massive shot in the arm for precisely those sorts of entrepreneurs who want long‐term funding to fuel their growth plans.
Just as importantly, it is a huge vote of confidence by the UK Government in the important role that Startup technology firms can play in helping to drive our economy.
By empowering the founders of the future, UK entrepreneurs will now have the ability to grow the companies that will shape the global technology landscape, safe in the knowledge that their investors are in it for the long‐term and the Government is stood shoulder to shoulder with them.
For our part, the evergreen investment from the British Patient Capital fund is also a ringing endorsement of our model and track record of supporting ambitious UK businesses such as Perkbox, Lyst, and Graze and we are delighted to welcome them onboard as part of our latest fundraise.
Patience may be a virtue, but it takes dedication, ambition and faith to make things happen. The entrepreneurs we have worked with over the years had all of these qualities in spades; today’s launch of British Patient Capital shows that the UK Government does as well.