Using the UK Tech Investment Tracker provided by Tech City News, we compiled a list of top five companies that have received the biggest cash injections in 2016 and 2017.
We hope it will reveal what kind of companies attract investors. After all, even if they turn out not to be successful (see the current struggles of our no. 1), at least they will have succeeded in fundraising.
The number one on our list is Deliveroo with its E series worth £210m, as announced in August 2016. The company has since been hit by a strike of their drivers, accused of exploiting its workers as well as forced to change its business model. On 5 Apr, Deliveroo announced plans to open 30 kitchen hubs to meet the growing demand for food delivery in the UK. Deliveroo is facing fierce competition from another sharing economy behemoth, Uber Eats, and recently also from the Amazon Restaurants feature for Amazon Prime members. Yet another tech company owns an independent delivery provided by restaurants - Just Eat.
Farfetch, a fashion e-commerce business run by José Neves, provides one-stop online experience for customers of over 400 independent fashion boutiques in 35 countries, offering over 1000 brands. With its Black & White platform, it also allows fashion brands to use Farfetch to run their own monobrand e-commerce. To give you an example, Manolo Blahnik uses this option. With £85m F series raised in May 2016, the company now has over $305m in equity funding and the valuation of over $1bn. Its closest competitor in the space, Yoox Net-a-Porter (YNAP), is looking for a partnership and direct sales via WhatsApp. As for Farfetch, it keeps a brick-and-mortar presence, after the acquisition of Brown’s at London’s Molton South Street in 2015.
3. Atom Bank | latest round: £83m | total equity raised: £216.7m
Atom Bank is now valued at $152m, after the latest venture capital injection of $83m led by BBVA. Based in Durham, the company tries to change banking industry by offering truly mobile-first and mobile-only solutions for consumer banking. It has acquired a web development agency, Grasp, to keep things in-house, and it is the first of the challenger banks (Monzo, Starling Bank and Tandem are the contenders) to offer current accounts to its users.
Funding Circle, a P2P lending platform for small businesses, has received $100m from Accel Partners in January 2017. So far, it has lent over £2bn, and, according to its co-founder and CEO, Samir Desai, it has helped to create over 50,000 jobs in Britain. Recently, we have heard more about crowdfunding platforms such as Crowdcube, but Crowdcube is still ten times smaller than Funding Circle, which remains one of the sources of cheap money you can spend on accelerating your business.
Darktrace is our cybersecurity success story. Using machine learning and AI technologies, it protects companies from cyber threats worldwide. With the latest $64m C Series in July 2016, Darktrace continues to grow and expand its arsenal. This month, it has launched Antigena, a new AI software that can detect and respond to attacks never seen before.
Why These Five?
We can see that investors reward companies that target the consumer market. The perfect model seems to be an intermediary, taking the logistics burden away from SMEs and delivering seamless execution to the customer. See the top three companies on the list.
Deliveroo promises to bring you any food you wish, whenever you are hungry, wherever, 24/7. Restaurants can focus on cooking because Deliveroo takes over the delivery.
Farfetch gives you an opportunity to shop in the world’s best independent fashion boutiques straight from your sofa. Fashion brands can focus on design and manufacturing.
Atom Bank tries to replace high street banks by offering seamless (biometric login), ubiquitous and always open access to the service via mobile phones.
The other two are different. Funding Circle’s model is not only a business but also an economic or social movement of a sort. It brings together investors willing to trust someone with their money and SMEs looking for access to cheaper loans. Together, they fuel the economy and build a community.
Darktrace is the very best answer we have to the cyber threats. Machine learning is probably the only way to get ahead of cybercrime. Darktrace has proven that its solution works, it is poised to grow, and the investors are lucky to get a share of its success.
Now, what about your startup? Is your way similar to any of those top five fundraising companies in the UK? Let us know in the comments below or drop an email to get in touch.