Five things we learned from the ScaleUp Annual Review 2020

The ScaleUp Institute’s ScaleUp Annual Review was published last month, giving a definitive guide to the scale-up business community in 2020.

But what does it mean for UK businesses and how does Lancashire compare nationally?

1. ScaleUps will continue to grow despite the challenges they have seen in 2020

The Scaleup Survey, which focused on the views of 645 scale-up leaders nationally, highlighted the continued ambition in the scale-up community.

Eight out of ten expect some form of growth next year, with five in ten scaleups expecting to scale more than 20 per cent in 2021.

The expected growth includes staff numbers, with two thirds expecting to grow their headcount.

2. Growth capital remains a key barrier to scale-ups

Both nationally and within Lancashire, access to finance remains a key barrier to scaling up.

The Scaleup Survey showed the Government-backed Covid-19 support schemes were a popular source of funding this year. However, nationally, just 28 per cent of scaling businesses outside London are currently using equity finance.

Among those not currently using external funding, an unwillingness to give up control of the business and a perceived short-term focus of investors were cited as two of the top reasons.

3. The equity finance knowledge gap is closing

Despite the barriers to accessing finance continuing among the scale-up community, the knowledge gap among scaleup leaders about equity finance options does appear to be closing.

The percentage of leaders claiming they do not know anything about equity finance has from 10 per cent in last year’s report to 5 per cent this year.

4. Scale-up companies’ contribution to the Lancashire economy is growing

Despite the number of scale-up companies declining in Lancashire over the past year, the total turnover of Lancashire scale-ups has grown from £10.8bn to £11.1bn.

In addition to funding, UK market access and talent were cited by Lancashire leaders as key growth barriers to scaling.

5. Lancashire has a great ecosystem for scaling companies

The ScaleUp Review shone a particular light on the Lancashire scale-up community and the support for local scale-up leaders driven by Two Zero and Boost; Lancashire’s Business Growth Hub.

Analysis as part of the ScaleUp Review showed 10 of the 14 Lancashire local authorities have an above median density of scaleups measured by employment growth and 8 of the 14 local authorities have an above median density of scaleups measured by turnover growth.

The review also highlighted the impact of Two Zero’s focused pilot programme for scale-ups and the ongoing support the 49 companies who have so far engaged with Two Zero will continue to receive.

The full analysis of Lancashire’s scale-up community can be viewed here.

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