How UK Tech SMEs Can Secure the Investment They Need
As the leading technology trade association, techUK is dedicated to empowering companies of all sizes to harness the full potential of digital technology and its positive impact. Together, we forge an innovative network across businesses, governments, and stakeholders, striving for a brighter future for all - empowering people, strengthening society, driving the economy, and protecting the planet. To join our tech community, click here.
Technology SMEs are at the heart of the UK’s thriving tech industry. Our SMEs have pioneered innovations in emerging technologies, created highly skilled and highly paid jobs, transformed public services, and led the emergence of regional tech clusters.
However, despite these successes, tech SMEs continue to face significant challenges that hinder their growth and innovation. A major barrier is insufficient funding, with just 7% of SMEs nationwide receiving equity investment. Research shows that only 43% of SMEs use external finance, while 35% are permanent non-borrowers.
Many of the SMEs interviewed in our UK Tech SMEs report became established without any external finance, with nearly 50% of respondents not receiving any private investment. One company, which has grown from two employees in 2021 to 45 employees in 2024, explained they were entirely boot-strapped and have never tried to get any external finance in the belief they could build the company alone. Another company based in Birmingham explained they had grown from 16 to 40 employees the “old-fashioned way, by ensuring we keep profitable all the time.”
Yet, while some SMEs have successfully scaled without external finance, it remains a crucial tool for those looking to expand or invest in further research and development. Challenges persist, particularly when seeking later-stage investment. The UK is recognised as a world-leading destination to innovate and create new technologies, some of which are outlined in the SMEs interviewed. However, as companies begin to scale, domestic capital becomes much scarcer.
For female founders, raising equity investment can be even more challenging. Research from the British Business Bank shows that in 2023, all-female founder companies received just 2% of equity investment. One female founder commented that when she was raising seed investment, male founders with businesses less advanced were finding funding much easier and recalled receiving comments from investors related to choosing between having a family and a business. Another commented that female founders do not have the same access to high-net-worth individuals, who are typically men, and there are simply not enough women making decisions around investment or enough female-led organisations. As such, “talking to tech companies and investors, 99% are male, and the unconscious bias is still very noticeable.”
Location also plays a significant role in raising investment. The percentage of SMEs receiving equity funding varies by region. A company based in Leeds shared that when they sought investment in 2019, only six private equity and venture capital firms were operating in the region. When they pitched to 30–40 investors in London, they did not receive a single offer—many investors “switched off the minute they found out we were from Leeds.”
At techUK, we are committed to helping tech SMEs overcome these challenges. As part of our work on the UK Tech SMEs report, we are launching a series of events, titled "Meet the Investors," designed to support SMEs in navigating scale-up finance. These events will connect SMEs with investors and experts, providing insights, funding advice, and networking opportunities. To address regional disparities in investment access, we are hosting events across the UK.
Our first event will be in Birmingham on the 18th of March, as part of UK Tech Week . Followed by Manchester on the 1st April (as part of DTX 360 ) and Glasgow on the 17th June.
Additionally, to increase awareness of the funding gap, we invited techUK members to submit blogs and videos as part of our diversity, inclusion, and equity campaign, #TechTogether. Find out more about how you can take part in this campaign here or read all content written by other techUK members here.
领英推荐
?? In case you missed it ??
??NEW REPORT: UK plan for Chips??
Semiconductors power everything from consumer electronics to AI. With the industry set to hit $1 trillion by 2030, securing the UK’s role is key for growth and resilience. We welcomed the 2023 National Semiconductor Strategy, but progress has been slow. Now is the time for decisive action. Click the image to download the full report.
??Opportunities for techUK Members??
?? Upcoming Events???
Some techUK events that might interest you:
--
2 周I appreciate this event