New data published today (25 April) in Growth Index 2023, shows the capital is loosening its grip on the UK’s fastest growing companies Top 100, as a sharp reduction in PE/VC funding saw the growth of many heavily reliant, London-based, tech companies take a tumble.
Growth Index 2023, the annual ranking of the UK’s 100 fastest growing brands includes just 32 London companies, down from 47 last year.
However, rather than demonstrating the emergence of Levelling Up, the likely reason for this is London’s poorer year for tech and fintech, two of its flagship sectors. Large tech and fintech firms, which had previously attracted massive late-stage funding, have fallen out of Growth Index 100 in 2023. Indeed, the total number of tech companies featured in this year’s Growth Index has dropped by almost a third (32%) from 22 to 15.
Less funding to go around, but to what effect? – Though the drop in the number of the Top 100 fastest growing companies that received venture capital, private equity or Angel investor funding this year isn’t huge – a 13% reduction from 47 to 41 – the drop in the total amount raised is – plummeting from $13.1bn in last year’s Index to just $4.6bn. Fintech companies in Growth Index 2023 raised 56% less funding than those in last year’s ranking.
Growth Index 2023 does also show this shouldn’t raise undue concern, however, as half the hyper-growth companies in the Top 100 have earned their place without any form of equity funding, public or private.
Now in its second year, Growth Index is the definitive independent league table of the UK companies with the fastest growing sales, created to celebrate the companies that have supercharged growth and the leaders that have inspired and driven it. Companies are ranked by compound annual growth rate (CAGR) in sales over their last two financial accounting years (including filings up to February 2023). The ranking shines a spotlight on the most successful sectors and companies in the UK, championing good growth and the equitable democratisation of business opportunity in the UK.
Read the full Growth Index 2023 report here.
Legacy of UK tech industry body Tech Nation – With the findings of Growth Index 2023 coming shortly after the demise of Tech Nation, the UK industry body created to champion the tech industry, growing founders, leaders, and scaling tech, it is interesting to note that only five companies in this year’s Top 100 have worked with the organisation, whereas 20 of last year’s 100 fast growing companies had done so.
No signs of Levelling Up – Despite the lack of tech funding, London and the South still loom disproportionately large over Growth Index 2023, with 59 of the 100 fastest-growing companies being based in the capital or its surrounding regions. The East Midlands, once a powerhouse of the Industrial Revolution, has only four companies on the list, while the North East and Northern Ireland have none.
Orlando Martins, founder of Growth Index and CEO of executive search consultancy ORESA, said: “While it may present some challenges in the short term, it also offers an opportunity for businesses to focus on sustainable growth and long-term success, rather than relying on quick fixes and short-term gains. By taking a more strategic approach to growth and investing, processes, and technology, businesses can position themselves for success, regardless of the funding environment. With the recent demise of Tech Nation, the UK industry body created to champion the tech industry, growing founders, leaders, and scaling tech, when its own funding was withdrawn, it may be interesting to see how tech features in the Growth Index 2024.”
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