Could Your Digital Tech Company Be the Next Unicorn in the UK?
Earlier this year, the UK achieved the prestigious milestone of 100 tech unicorns (startups valued at over US$1 billion). The growth over the last decade has been rapid, from 10 unicorns in 2010 to 81 in 2020, including global juggernauts like fintech Revolut, event technology platform Hopin and CleanTech leader Octopus Energy.
By the end of this decade the UK is forecast to have 223 unicorns. It is therefore not surprising that many Australian scale-ups are prioritising the UK as the destination for their international expansion.
Australian success in the UK
The UK is proving to be an effective ecosystem for Australian tech companies looking for rapid growth. My team at the Department for International Trade (DIT) have already supported many of their journey to the UK by setting up introductions and connections, providing market and industry insights and supporting with recruitment.
Melbourne born Airwallex, a global fintech payment platform, launched in the UK in 2017 with a small regional office, focused on supporting their global business. After securing Series A funding, the company was primed for success in the UK. Leveraging the UK-Australia Fintech Bridge and support from DIT, Airwallex received their licence from the UK regulator in 2018. By March 2019 they became the fastest Australian unicorn following a successful Series C fundraising round of USD$100 million. Despite Covid-19, they continued to experience strong growth in 2020, raising US$200 million in Series D funding in summer 2020 and launching a number of new products. Airwallex has already raised an additional US$100 million in March 2021, nearly tripling its valuation to US$2.6 billion in just two years.
A more recent entrant to the UK is Sydney’s smart city software Vapar. Vapar uses AI and machine learning tools to help councils, utilities and contractors manage pipe infrastructure assessments. The opportunity to scale their product and the significantly larger market size spurred their expansion to the UK. With the support of DIT’s Global Entrepreneur Programme Vapar have now opened their UK office in Bristol and are undertaking a number of trials and implementation projects with UK based customers. We look forward to continuing to support Vapar’s expansion and growth in the UK.
What makes the UK so successful for Australian companies?
The similarities between our two countries makes the UK a relatively easy place for Australian companies to do business. But the UK‘s appeal goes much further than this:
Culture of innovation
The UK has a strong, innovative ecosystem backed by generous government incentives for innovation and Research and Development (R&D). It is ranked third in the Global Innovation Index 2020.
The UK has a dedicated Innovation Agency, Innovate UK. Their COVID-response programmes in 2020 delivered £400 million of new investment to over 3,000 R&D-intensive businesses in every corner of the UK.
The UK’s first Digital Trade Network also supports tech scale-ups to accelerate their overseas growth.
Strong investment appetite
The UK is a world-leader in attracting tech and digital investment:
- London alone attracted more than USD$10.6bn worth of investment in 2020, ranking fourth only behind San Francisco, Shanghai and New York
- Venture capital investment in the UK is the third highest in the world with a record high of US$15 billion – behind only the USA and China
- According to The future UK tech built: Tech Nation Report 2021, there was a 21% increase in climate technology and agritech companies in the UK in 2020
World class talent
The UK’s highly skilled workforce is backed by four of the world’s top ten universities which are based across the UK. With nearly 3 million people employed in the digital economy the UK is ranked number one in the world for attracting global talent.
Ambitions for the future
We have now finalised the core elements of the UK-Australia Free Trade Agreement (FTA). This is an important step on the path to seeing the FTA come into force. One of the ambitions of the FTA is to make it easier for Australian and UK companies to operate in both markets, supporting the growth of more unicorns over the next decade by:
- Better market access for services: The UK’s world leading services industry will benefit from better access through new digital and services provisions in this deal. Alongside the new investment provisions these arrangements will bring new opportunities to the whole of the UK.
- Digital: We expect the deal to be among the most advanced in the world – with provisions on AI and data innovation. We know that what we trade and how we trade will change radically in the years ahead so this will be the first ever trade deal to be updated as new technologies emerge in fields like artificial intelligence, space exploration and low emissions technology.
- Mutual Recognition of Professional Qualifications (MRPQ): The deal will help facilitate the recognition of UK professional qualifications across many sectors, creating opportunities for our professionals.
Through closer collaboration the UK and Australia can help lead the world in the industries of the future and build back better from COVID19.
At the end of this decade when we look back at the companies who have joined the growing number of unicorns, I hope there will be a strong presence of Australian founders and innovators who have benefited from the FTA. So if your ambitions are to expand to the UK and one day become the next the unicorn, please get in touch with my team today.
About the UK’s Department for International Trade:
The UK’s Department for International Trade (DIT):
- helps businesses export
- drives inward and outward investment
- negotiates market access and trade deals
- champions free trade
Find out more about DIT.