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UK government launches £1.5m campaign to boost tech sector
Thu, 14th Mar 2024

The UK government is set to invest £1.5m in a marketing campaign aimed at invigorating the nation's science and technology sector. Announced by Tech Secretary Michelle Donelan at a techUK conference, the initiative seeks to ignite investment in UK-based startups specialising in science and technology, particularly those at the Series A-C level and beyond.

Last year's global investment downturn dealt a severe blow to UK scale-ups, which have been desperately seeking support. Although the UK boasts a vibrant venture capital community for early-stage projects, many growing scale-ups are being lured by the robust institutional funds offered by their American counterparts.

"The UK has built a £1 trillion tech sector from a thriving startup scene, outpacing our European counterparts at every turn and creating innovators capable of shaping the global economy", Donelan stated ahead of her speech. She further added that "with more capital, start-ups can take their ideas anywhere. However, too often, founders look to other parts of the world for the next level of funding."

As per the government, a single Series A investment of approximately £2m has the potential to match the £1.5m initial cost of the campaign. Past initiatives of this nature have brought in returns as high as tenfold, and similar results are expected over the next three years.

The campaign will primarily target venture capital hubs in London, Edinburgh, Belfast and Cardiff with a specific focus on the underfunded deep tech sector. The broader aim is to align venture capitalists with the government’s ambitious agenda of positioning the UK as a global science and tech superpower.

Damian Skendrovic, GM, EMEA, at VeUP, voiced his support, saying: “The UK is home to some of the world’s most disruptive and exciting technology startups. It’s encouraging to see the government recognise that by unlocking this much-needed investment. Today’s scale-up companies are set to unleash huge growth in the economy, creating jobs and making Britain a world leader in areas like cyber defence and artificial intelligence."

Despite the optimism, tech leaders have criticised the government for failing to reverse cuts to the R&D tax credits in the recent Spring Budget. Although the budget included positive elements, such as a boost in AI funding and a £360m R&D package, industry insiders argue for more improvements.

Wayne Johnson, CEO and Co-Founder of Encompass Corporation, observed the financial implications: “The government has many ambitions for the UK, including becoming a top financial hub, a science and tech superpower, and the next Silicon Valley. The unifying factor is the need for a dynamic, top-tier tech sector that draws interest and investment to propel it forward."

In her closing remarks, Donelan said, "Our Science and Tech Superpower campaign practically knocks on the venture capitalists and scale-ups’ doors and implores them to capitalise on the opportunities that lay ahead so we can elevate the UK to the next level of tech leadership."