UK Scaleup Companies: What Are They and How Can You Find Them?
Sarah Cheeseman, 07 September 2023
In the fast-paced realm of business and innovation, a remarkable breed of enterprise has been steadily gaining momentum on the UK stage. These aren’t your everyday startups striving to find their footing; these are the UK’s scaleup companies. They’re companies that have traversed the initial hurdles and are now surging ahead, rapidly expanding their operations, and contributing significantly to the nation’s economic growth.
In this article, we’re delving into the world of UK scaleups, exploring the defining characteristics that set them apart and the industries they’re revolutionising along the way.
What is a scaleup company?
Here at Beauhurst, we track companies that meet both 10% and 20% annualised growth rate average in turnover over three accounting years and have at least £200k in revenue in its base year, and/or have an annualised average growth rate of at least 10% or 20% headcount over three accounting years and have at least 20 employees in its base year.
If a company is raising investment to fund its growth, it tends to move into scaleup territory after its first round of funding. And while being considered a scaleup is an impressive thing in the world of business, it comes with its challenges. This can include accessing new markets, acquiring new customers and maintaining their growth momentum.
We make no distinction between companies that have grown organically, or due to acquiring another company.
If a company is raising investment to fund their growth, they tend to move into scaleup territory after their first round of funding. And while being considered a scaleup is an impressive thing in the world of business, it does also come with its challenges. This can include accessing new markets, acquiring new customers and maintaining their growth momentum.
Companies that are raising funds, whether equity and/or debt, are on a separate track to companies scaling. They tend to be younger and more innovative, whereas scaleups tend to be of a more traditional setup.
What are the most dominant scaleup sectors?
While scaleups aren’t strictly consigned to certain industries, there are some leading the way more so than others.
The construction industry is right at the top of our list, with 2,421 scaleup companies listed. This includes big names such as Marshall Group, Mace and Mott McDonald. Next on the list is manufacturing and engineering , with 1,848 UK scaleups. In here you can find companies such as JCB, Elta Group and AESSEAL.
What are the top ten scaleups in the UK?
Sector: Forecourt convenience retailing
EG Group operates multiple petrol and service stations in various international locations, and operates a range of third party retail brands within its stations, including KFC, Subway and Carrefour. This company has received £320m through four fundraises, and has completed eight acquisitions to date, including Asda, Cooplands and Leon.
Rothesay Life is the UK’s largest pensions insurance specialist, providing life insurance pensions security services for businesses. To date, it has received £1.31bn in funding through six fundraises, the most recent being equity fundraising for a 15% stake, completed in September 2009 for £500m.
ED&F Man is an agricultural commodities merchant with a global presence, trading in sugar, coffee, molasses, animal feed, and pulses. It provides hedging services and access to commodity and capital markets, and prioritise corporate responsibility and sustainable production. In 2017, the company completed the acquisition of Maviga, specialists in the processing and trade of dried, edible pulses and other special crops.
JCB manufactures a range of construction machinery and equipment for use in a range of sectors, including the agriculture and defence industries. It has received funds of £3.97m through eight fundraisings to date, the most recent of which was in 2020.
Sector: Food manufacturing
2 Sisters Food Group produces and supplies supermarkets with a variety of meat and poultry, ready meals, biscuits and frozen food products. In 2012, it received a £3.75k grant from Nutrition for Life (managed by Innovate UK). 2 Sisters has also made two acquisitions; Storteboom in 2010 and Lloyd Maunder in 2008.
The Premier League is the top tier of England’s football pyramid, which produces some of the most competitive and compelling football in the world. It offers online publishing and promotional services for football events and news.
Operated by Ausurus Group, EMR provides metal waste management and recycling services, distributing recycled products after they have been processed. It has received six grants, totalling £3.21m, with the most recent being for £15.2k in May 2023. It also made one acquisition, of Metal & Waste Recycling, in 2017.
Sector: Gambling and betting
How much value do the top ten scaleups bring to the UK market?
The top ten companies listed above have brought a combined total turnover of £407bn to the UK to date. As a whole, this section of the UK market is one of the most profitable, seeing extensive amounts of growth over the past decade. The impact that scaleups have on the UK economy cannot be underestimated, and it should be noted that it’s not just monetary value that they bring to the economy. The very nature in which they are established and grow mean that they disrupt their industries, innovating and updating processes as they go. This is especially prevalent when it comes to digitalisation, as well as areas such as health tech and fintech.
The top 10 investors in scaleup companies
Understandably, scaleup companies provide an exciting and profitable prospect for many investors. With so many businesses already using some form of equity finance, and many planning to in the near future, this is an area that shows no signs of slowing down.
The highest investments into scaleup companies have been provided by RBS, who have made 49 fundraisings to a total value of £798.42m. The majority of their investments are made into professional services for businesses, distribution, food and drive processors and nursing and care services.
Second to this, Scottish Enterprise has invested in 322 scaleup companies, totalling £484.46m. They tend to invest in software-as-a-service (SaaS), pharmaceutical and technology/IP-based businesses, largely within the Scottish regions.
UK Innovation & Science Seed Fund is third on the list in terms of value, investing over £270m to date, to a total of 201 companies. This fund largely focuses on companies within the pharmaceuticals industry, as well as technology/IP-based businesses.
The future of scaleup companies in the UK
The ScaleUp Institute’s 2022 Annual Review found that despite concerns about rising costs and supply chain issues, the UK’s scaleup companies represented 50% of the total turnover of the SME economy, and that it remained resilient throughout the pandemic, as well as in the immediate aftermath.
While there were fears raised about the ability for companies to continue scaling in the UK, many scaleups continue to see growth, with one in five expecting to scale at 50% or more. However, it’s impossible to ignore the fact that scaleup growth has slowed to an extent in recent years.
How to find scaleup companies in the UK
Our data platforms enable you to identify, track and understand the UK scaleup ecosystem. We use 10% and 20% scaleup tracking triggers to identify these companies, allowing you to uncover data on this exciting part of the high-growth scene.
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