The Scaleup 2017Index Foreword The ScaleUp Institute has always companies and charities have • The more equity investment believed in the need for better specific qualities that will be they receive, the faster they data on the UK’s fastest- better examined by a separate grow. The majority of scaleups growing companies. We can approach. raised less than £5m. If investors only effectively support these had deeper pockets to give the companies if we know who they companies more investment, are, where they are, and what The Scaleup Index they would grow faster. they do. To this end, we are shines a spotlight pleased to work with Beauhurst in on a particular segment of • Many scaleups are more than creating the Scaleup Index which 20 years old. Many of the UK’s the UK landscape that is shines a spotlight on a particular older and more stable segment of the UK’s scaleup adding billions to the companies clearly have the “economy and hundreds of landscape that is adding billions potential for growth, though to the economy and hundreds of thousands of jobs. they are most likely to be thousands of jobs. It shows the Irene Graham growing at a moderate pace (20 diversity of our scaleups, their CEO, The ScaleUp Institute to 40% per annum). breadth of sectors and presence up and down the country. They • Nearly half of scaleups have a are vital to the strength of the This first Index establishes the female director, but only 4% UK’s economy. benchmark levels against which have a female founder. future editions of the Index can The ‘visible’ scaleups, which measure change, and brings We would like to thank our are the subject of this report, to our attention some very key partners and in particular, Smith are those companies that are attributes our scaling community & Williamson, without whose private commercial concerns has, in particular: support we would not have been large enough to be declaring able to undertake this research their turnover and employee • The majority of scaleups are with Beauhurst and shine a numbers in filed annual accounts ‘non-tech’ . These companies further light on our UK scaleups. at Companies House. Where a will be using technology but scaleup comprises more than usually not creating it irene graham one entity/subsidiary, these are themselves. ceo, the scaleup institute counted as one scaleup. We fully recognise there are many other • Companies receiving equity types of scaleups and it is our investment are more likely to intention to carry out separate grow faster (in turnover at research on other scaleup groups least). not in this report. Publicly listed 9,225 legal entities that filed 9,225 full accounts matched the visible scaling legal entities OECD scaleup criteria in at examined least one three-year period in 2011 to 2017. We did not include 1,918 companies that are part of foreign-HQ, LLPs, a business headquartered abroad. We also excluded financial vehicles excluded LLPs and financial vehicles. If a group has many scaling 1,077 subsidiaries, only the single subsidiary companies overarching business has excluded been included. Many listed companies (or 1,076 subsidiaries thereof) are listed companies scaleups but we have not included them to focus on excluded the unsung private heroes. This report has not looked 1,060 at charities as their aims charities, trusts, CICs are materially distinct from those of fast-growing com- excluded merical enterprises. The OECD definition of a 238 scaleup excludes companies acquired companies that began scaling only after excluded being acquired. 3,856 unique scaleup businesses About this report about this report This report examines ‘visible scaleups’ in the UK: a visible scaleup is a visible scaleups company that (i) meets the OECD definition of a high-growth firm (see (i) meet the OECD definition below) and (ii) files full accounts at Companies House. of a high-growth firm (ii) file full accounts at oecd high-growth firms Companies House All enterprises with average annualised growth greater than 20% per annum, over a three year period, with at least 10 employees at the start of the observation are defined as high-growth firms. Growth can be measured by the number of employees or by turnover. Companies that have grown because of mergers, takeovers and acquisitions are excluded. full accounts UK companies are only required to disclose their turnover if two of the following are true: • annual turnover exceeds £10.2m • assets exceed £5.1m • more than 50 employees Only companies that meet two or more of these criteria or those have chosen to declare their turnover count as visible scaleups. We look forward to the fulfilment of current policy recommendations making ‘invisible scaleups’ discoverable too. sectors The businesses in this report have been classified according to Beauhurst’s proprietary sector matrix and are tagged with as many sectors as are relevant. In this report scaleups operating in multiple sectors have been double-counted. acknowledgements We would like to thank BGF, Innovate UK, Smith & Williamson and the ScaleUp Institute for all of their support in the production of this report. Contents Foreword i About this report iii Summary infographic 1 Geography 2 Sectors 8 Grants 14 Investment 16 Top investors 20 Growth rate demographics 22 Founders and executives 28 Scaleup directory 30 Afterword 43 About the authors 44 Methodology equity investMent into visible scaleups over tiMe 9,225 visible scaling legal entities £1.5bn 85 87 examined 79 72 68 £1bn 5,369 48 legal entities excluded (charities, plcs, foreign HQ, duplicate subsidiaries) £500m 3,856 £1,383m £825m £664m £1,060m £838m unique scaleup businesses £751m 2011 2012 2013 2014 2015 2016 top sectors by nuMber of visible scaleups top LEPs/regions by nuMber of visible scaleups Property/land development 546 London 790 Distribution 283 Scotland 229 Misc. manufacturing & engineering 277 South East 219 Builders 255 Greater Manchester 162 Food and drink processors 219 Leeds City Region 144 top visible scaleups by eMployee count top visible scaleups by turnover Best-One 26k Greenenergy £13.7b 2 Sisters Food Group 23k Palmer & Harvey £4.4b Home Bargains 16k CurrencyCloud £4.2b Haven 14k Best-One £3.5b Edinburgh Woollen Mill 10k 2 Sisters Food Group £3.1b Key figures 01/11/2011 – 30/09/2017 3,856 £62m 47% number of visible scaleups IUK grant funding scaling 2+ years 214 623 17% visible scaleups MBO’d visible scaleups using equity scaling 3+ years top equity investors by deals into visible scaleups 01/11/2011 – 30/09/2017 55 21 14 13 12 12 Eden Notion Lloyds Woodford Index Ventures Capital Development Investment Ventures Capital Management BGF visible scaleups in london by visible scaleups in britain by local authority local authority Camden City of London Cheshire East 82 124 40 Leeds 68 Birmingham 50 Bristol Westminster 40 145 Geography. London dominates the UK with 21% of the scaleup population. The North West performs well, with 10% of scaleups resident there. HEATMAP OF REGIONS BY NUMBER OF SCALEUPS Geography 2 Scotland 229 (6%) North East 130 (3%) Yorkshire and Humberside 301 (8%) East Midlands 260 (7%) East of England 393 (10%) London 803 (21%) South East 526 (14%) N.Ireland 111 (3%) North West 395 (10%) Wales 111 (3%) West Midlands 320 (8%) South West 277 (7%) 100 800 Local authorities in London also top the charts. Outside London, Leeds is home to the most scaleups. HEATMAP OF LOCAL AUTHORITIES BY NUMBER OF SCALEUPS Geography 3 Aberdeen 32 Edinburgh 31 County Durham 28 Leeds 68 Cheshire East 40 Birmingham 50 Milton Keynes 24 Bristol 40 1 50+ Within London, the highest density of scaleups is in Westminster. Lewisham has the fewest scaleups. TOP LOCAL AUTHORITIES BY NUMBER OF SCALEUPS Geography 4 Camden 82 (10%) City of London 124 (15%) Westminster 145 (18%) 1 50+ Discounting London, scaleups are more evenly distributed across LEPs: the average population is 81 scaleups. HEATMAP OF LEPS BY NUMBER OF SCALEUPS Geography 5 North Eastern 95 Greater Manchester Enterprise M3 162 98 West of England Coast to Capital 78 111 South East 219 100 800 Cumbria LEP has the fewest scaleups, South East LEP has the most except for London. Ten LEPs have more than the average number of scaleups (81). TOP LEPS BY NUMBER OF SCALEUPS London 790 Geography 6 South East 219 Greater Manchester 162 Leeds City Region 144 Coast to Capital 111 Enterprise M3 98 North Eastern 95 Hertfordshire 94 Derby, Derbyshire, Nottingham & Nottinghamshire 90 Greater Cambridge & Greater Peterborough 88 The City of London is home to more scaleups than Birmingham, Bristol and Manchester combined. TOP LOCAL AUTHORITIES BY NUMBER OF SCALEUPS Westminster City Council 142 Geography City of London 126 7 Camden London Borough Council 82 Leeds City Council 68 Birmingham City Council 50 Bristol City Council 40 Cheshire East Council 40 Islington London Borough Council 39 Manchester City Council 35 Aberdeen City Council 32 Sectors. The majority of scaleups operate in non-technology sectors. Most will use technology but few are creating it. 1,358 (35%) of scaleups sell services to other businesses. top-level sectors by nuMber of scaleups Business & professional services 1,358 Sectors 8 Industrials 1,245 Built environment & infrastructure 692 Retail 466 Supply chain 452 Tradespeople 412 TechnologyIP-based businesses 409 Leisure & entertainment 332 Personal services 222 Energy 139 Transportation operators 118 Media 100 88 Agriculture, forestry & fishing 78 Telecommunications services 62 Within the Professional services sector, the combined Consumer/Business banking & financial services sub-sector has the largest number of operating scaleups, with 198. TOP BUSINESS & PROFESSIONAL SERVICES SECTORS BY NUMBER OF SCALEUPS Recruitment agencies & personnel supply services 195 Sectors 9 Civil engineering services 192 Waste management services 131 Business banking & financial services 116 Consumer banking & financial services 82 Security services 81 IT consultancy services 80 Marketing services 73 Insurance services 72 Advertising & branding services 67 IT support services 67 Food & drink processors is the fifth most populated sub- sector, with 219 scaleups.