What is the current market potential for startups in the UK?

We asked Anna Flockett, the UK-based editor of Startups Magazine, for her thoughts on the UK’s current market potential for startups, this is what she had to say:

UK Market Potential

When it comes to startups, the UK, and in particular London, has always been a huge marketplace – also known as the business capital of Europe, London is home to 40% of all European headquarters. With the rich number and quality of businesses, the UK is a hub for finance and funding, and provides good education, meaning entrepreneurs have access to large number of skilled and qualified employees. The UK market also provides the opportunity for businesses to easily upskill and continually develop their knowledge.

With the current climate, the whole world has turned upside down and there are a number of uncertainties. The UK is no different, but the Government has taken a number of actions, provided help and prioritised businesses as much as possible. This has meant that a lot of businesses have had to focus on adapting their operations post-pandemic to maintain increased levels of accessibility, looking at what changes need to be made both short and long term.

UK Businesses, and in particular startups, have been lucky in the sense that the UK Government has designed specific initiatives, grants and schemes to help across all sectors wherever possible, as getting the economy and business marketplace thriving is one of Britain’s main priorities. But how have these businesses been coping, and what have they been doing to adapt to this, perhaps temporary, but uncertain climate?

A lot of businesses have pivoted to a slightly different model, or have added new elements to their business to keep them going short-term. Whether these plans are going to be taken forward or not, it has worked for a large percentage of businesses, one of the biggest sectors being hospitality.
There has obviously been a lot of speculation about the ‘change of the business world’ and the end of the office scene in the UK after COVID, however research shows that over 90% of workers are looking forward to getting back into the office but want to adopt more of a hybrid working approach. This means businesses who heavily relied on the morning commuters and peak time travellers will see the marketplace boom again.

Whether this be through a transformation of the entire company or pivoting to business models conducive to short-term survival along with long-term resilience and growth. Pivoting is a lateral move that creates enough value for the customer and the firm to share.

The past year will be one to forget, but it is the year food delivery came into its own. Although some restaurant and cafes did take away services before, delivery and collection for food has seen one of the biggest increases in the business world. According to a report by Statista the market value of food delivery service has increased from £8.1bn to £8.5bn, and this is set to grow even further.

Software has been developed to help with this – apps and websites have been created and utilised to ensure that this new side of the business can run seamlessly for both the business and customer. ePOS Hybrid is just one example of this, as they have created technology to help transform the hospitality sector including online and mobile ordering apps, self-checkout kiosks, contactless ordering, payment solutions and many more.

The thriving sectors

Healthtech
It is no surprise that the healthtech industry has seen a huge acceleration over the past year, and the UK market is a hot spot for this.

Across Europe there are over 600 funded digital healthtech startups, and 63% of these have been founded in the past five years. The number has been growing steadily over the past decade, and the past year has been no different as it continues to grow. The UK also remains the European leader in healthtech, as it is a highly capitalised market – receiving twice as much investment as the DACH region.

The combination of technology and healthcare has always seemed to be a million-dollar idea, but with the COVID-19 crisis, technology and science has played a huge part in helping us fight back against it. It is crucial that the healthcare industry and investment into it continues to grow, so we can understand the digital health landscape further.

Education
Edtech can sometimes be seen as an underestimated sector, and not as appealing as some others, but is always an industry that has seen growth. Being a sector that is needed arguably more than ever, a lot of edtech businesses have had to adapt and accelerate the roll out of new technologies and abilities to help over this past year.

Technology has been a saviour for the education space, with learning becoming completely remote for a large part of the past academic year and COVID-19 pushing so many students to learn from home, and schools investing in new tools and digital capabilities.

Therefore, naturally we have seen a huge number of VCs pour funding into edtech startups as COVID shook the funding market, and we now can see a strengthening exit market, not just for edtech but for a number of sectors.

Travel and sports
This is an interesting industry – as expected during a global pandemic a lot of the travel market have been affected, and in some cases completely closed down – a lot of international flights, ferries and other modes of travel stopped. However, certain parts of the travel market, for example cycling, ebikes and scooters, have seen an increase with people choosing different modes of transport to normal when having to make necessary trips; and stats show a large number of people have taken up more cycling and exercising as a hobby during the lockdown.

The travel industry has been hit hard, but is definitely one that will bounce back. The need to travel will only keep increasing and the industry is constantly evolving – the pace of change is now faster than ever before. This is again down to emerging technology and is a real opportunity for companies that have, adapted and survived this year and kept up with the latest travel trends in order to embrace new ways of doing business.

To conclude
Business in the UK has always been a dominating marketplace, and with the amount of upcoming skill, innovation and digital transformation that we have, it is clear to see what has always been considered a highly developed, sophisticated, and diversified market and it is certainly a space to watch. The global market has been through a turbulent year, and as we come out of it, we can clearly see that the UK has built up a resilient and durable market for businesses to thrive. There will be a number of new businesses born from this pandemic, and the next few years will be exciting to see what new innovations come from the pandemic era.

Anna Flockett, Editor at Startups Magazine, has been in the technology and business industry for over five years. She enjoys speaking to small businesses, new innovators and entrepreneurs that have a drive to change their industry. Anna has a passion to learn about everyone’s story and see how Startups Magazine can help startups along their journey.