Scottish tech firms are “resilient” in the face of economic headwinds

Scottish tech firms are

The 6th annual Scottish Start-up Survey has revealed that the nation’s tech companies are in a resilient mood in the face of concerns around economic headwinds.

While 89% of survey respondents said they are concerned by the global economic outlook, 88% said their start-up had grown in 2022, although 68% said Brexit had slowed growth.

Run by the EIE Investor Readiness Programme at the University of Edinburgh’s Bayes Centre in association with the Freer Consultancy, the survey sample included the current EIE22 cohort, EIE alumni companies, and a number of other early to later stage start-ups from across Scotland.

While 93% of respondents said Scotland is a good place to launch a start-up, 88% of start-ups are targeting investors outside Scotland. London and Rest of the UK (46%), followed by North America (30%), and Europe (21%) are the most targeted investor regions.

The survey also revealed that Scottish tech founders are targeting venture capital and angel firms in near equal measure (83% versus 80%). A total of 71% of start-ups say they have come out of the pandemic in a stronger position to achieve growth.

Almost half of start-ups, 48%, are back in the office while retaining hybrid or remote working, 33% are remote working, with only 19% fully back in the office. At the same time, 87% of start-ups have allowed their employees to decide where they want to work from.

The survey revealed that 69% of start-ups have found it difficult to hire talent over the last 12 months. 76% of respondents said engineers and developers were the hardest roles to fill, as a result,  67%of start-ups are targeting talent pools outside Scotland.

A further 81% of respondents said the Scottish Government-commissioned Logan and Stewart reports are positives for the evolution of Scotland’s technology ecosystem. While 55% of start-up leaders think that Scotland’s tech ecosystem is in a stronger position compared to a year ago.

Karen Wood, director of enterprise at EIE, Bayes Centre, said: “EIE is Scotland’s leading tech investor programme, punctuated by our annual showcase that is designed to build stronger connections between our brightest lights in the start-up firmament, and investors in the UK and across the globe. This year’s start-up survey informs these audiences and other stakeholders, giving them a snapshot of sentiment from tech founders here.”

Nick Freer, founding director, Freer Consultancy, added: “Now in its sixth year, our hope is that the findings are instructive and provide insight for both the Scottish tech ecosystem and investors, and other interested parties from tech hubs outside Scotland. One of this year’s more revealing findings is that, alongside targeting homegrown investors, so many of our start-ups are looking for investment outside Scotland. And, that matches what we’ve seen in recent times, in terms of an increasing number of rest of the UK and international investors backing start-ups based here.”

Michael Moore, director general, British Private Equity & Venture Capital Association (BVCA), said: “Scotland’s tech scene is increasingly vibrant and this survey also highlights its resilience as economic conditions change. The results are very encouraging and show that the EIE programme is developing a strong portfolio of businesses, founded in Scotland, but with a global outlook.”

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