For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.
This is a regularly updated blog that contains the latest updates on the Coronavirus pandemic’s impact on UK and global tech and business, including examples of how tech is supporting the fight against this virus.
Update 25/03/2020The Government response to the Coronavirus has escalated quickly, with their two main packages supporting cashflow and staff now live.
Speaking to founders across the tech sector from early-stage scaleups to some of the UK’s most established tech companies, from Belfast to Brighton, it’s clear that to a large extent the interventions are welcomed and hitting the mark. Nearly 3 in 5 businesses we surveyed were planning to access either the Coronavirus Business Interruption Loan scheme (CBILS), the Coronavirus Job Retention scheme or both. Their calls were for speed, simplicity and widened eligibility.
There are gaps that remain. An obvious one is the self-employed with the Treasury purportedly finalising a package tomorrow. Another are pre-profit startups. Our data threw up the fact that startups and early-stage scaleups, often pre-profit, were the segment of the tech business community least likely to access either – in fact this applied to 4 out of every 5. Some of this can be explained through a perception lag due to historic efforts to galvanise lenders to lend to this distinct group. The British Business Bank does expect some unsecured loans of up to £250k to be available for earlier stage non-profitable scaleups although these are subject to the risk appetite of individual lending providers.
But there is clearly a major issue that is yet to be resolved for many young businesses who have limited, if any, collateral against which to loan and are still months or years away from delivering profits. Many growing businesses have founders who will be individually liable for debt and, if they’ve recently raised VC investment, may require permission to access – or even be entirely precluded from accessing – debt. As a result, it’s increasingly clear that a large number of the scaling tech companies we support will not be able to access the loans offer through the British Business Bank.
The good news is there are a number of policy proposals floating round that could address this. The solutions are coalescing around Government-backed investment directly in these firms either through a traditional equity investment or Convertible Loan notes. Such a scheme would be an investment by the government rather than a grant where there are zero returns to the public coffers.
Our survey showed little regional disparity on the problem here, so identifying the right tech companies in the regions will be key to any new policy intervention. Tech Nation’s national network has identified 2,400 companies right across the UK that may require short-term cash flow support, runway extension, in these challenging times. With our 11 regional Entrepreneur Engagement Managers we are well placed to identify those companies in need and direct them to the solution.
It is clear that for startups at least, more specific support must be provided if we want to fuel this fast-growth and high-value sector of the UK economy.
For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.
Update 24/03/2020I wanted to share the results of a snapshot survey last week of one hundred founders of the Tech Nation alumni (click here to take out follow up survey). The survey, taken after the £330 billion Government injection into support but prior to the employment support package. It showed that cashflow and ways to create it were unsurprisingly the number one priority for tech businesses, with 9 in 10 businesses reporting this as their focus.
The key asks were for speed, simplicity and eligibility which well-intentioned – and for the large part well-executed – Government schemes of the past have not always met.
We have been staying close to the briefings of the new schemes launched to mitigate the financial impact of the virus. Indications are that the British Business Banks’ Coronavirus Business Interruption Loan Scheme, which went live yesterday, will both accredit lenders faster (there are 40 approved through the scheme as it launches today with more coming through an expedited process) and encourage a quicker lending process. They’ve also confirmed that 100% unsecured loans of up to £250,000 will be available, though not universally through all the lenders, preferring to allow individual lenders to show discretion on a case by case basis.
Of course, government support is just one part of the cashflow jigsaw. Many founders report that VC funding is stalling and some deals are falling through completely. Tech Nation is looking to address some of the worries caused by this crisis through a series of online seminars with our founders – last week we held two such meetings on fund raising and one on remote staff working during a crisis and further such seminars will be made available over the coming weeks.
An updated survey is now live, seeking to capture a little more detail by business size, stage and location. Please do take it by visiting this link. Every response helps the industry’s efforts to highlight to Government what is and what is not working, at a time when we need to ensure we make any necessary changes quickly. Your responses will directly impact the support available.
It’s times like these that adaptable leadership comes into its own. Everything we teach in our cohorts is aimed to improve management and leadership skills, which we know are crucial for tech companies to be globally competitive. Adaptability and creating the company culture to embrace that are the key skills for scaling companies.
Update: 23/03/2020From today, many businesses are able to access government support as a range of financial products go live. Please see our updated government links below on how to find details on the Coronavirus Business Interruption Loan Scheme (for SMEs) and the Covid Corporate Financing Facility (for larger corporates). A new BEIS website has also been set up to bring this all into one place. You can visit that here and a separate section that includes additional help from non-government organisations here.
We’re aware that speed and eligibility are the key questions many tech businesses have. On a call with the British Business Bank today our team was able to confirm that 100% unsecured loans of up to £250,000 will be available, though it will be up to individual lenders (there are 40 approved through the scheme with more coming) to show discretion on an individual case basis, taking a view that it was a viable business prior to the crisis. The loans can be obtained in addition to any EIS or SEIS scheme that a business has taken part in which is a useful addition.
On speed, the BBB is aiming for a swifter, smoother process but as a new product, there will be some teething problems.
Of course, I know too well the unique circumstances of many pre-profit tech start ups. We welcome any experiences you may wish to share over the coming days in ease or otherwise of accessing this funding and we continue to survey the sector for views on what further products might be needed. You can take that survey here.
Whilst we are awaiting whether there will be more intervention for the self employed, Covid Credit has been set up (as a proof of concept) helping self-employed workers to demonstrate their loss of income from Covid-19 to HMRC.
With self-isolation increasing healthtech companies are coming more into the public eye. Babylon Health, one of the latest cohort of our Future Fifty programme, is rolling out a symptom checker for coronavirus. BenevolentAI, also a 2020 Future Fifty 8.0 member, is busy using AI to crunch vast amounts of public data to see if existing drug combinations could provide any interim help to patients ahead of the development of a vaccine.
Other companies will also be actively considering how they can pivot their services to support the fight. As a few examples, Amplyfi (Upscale 5.0) mix AI with data capabilities to help scan the deep web for insights, Crisp (Future Fifty 8.0) is a cutting edge Social Media safety and crisis monitoring firm, that can help identify, understand and inform early interventions on growing societal issues. Thriva (Upscale 4.0) could help with health monitoring from home. CausaLens (Applied AI 1.0), an AI-powered prediction engine could help with staff and bed allocation during a time when the NHS will be under pressure like never before.
NHSX has sought to catalyse this area of tech further today in a new partnership with PUBLIC, called Techforce 19. They will award funding of up to £25,000 for a test phase (and potentially deployment) of a project that supports the elderly, vulnerable and self-isolating. Applications close 31st March.
As ever, any support you can offer please use the links in the government support section further down this blog.
Update: 20/03/2020The Chancellor has just finished outlining additional measures the Government is taking to support employment during the months ahead. We recognise that speed is of the essence in getting this money out so we recommend you take a look at the new proposals, which are summarised below, to understand how they can support your specific situation.
We have also updated a survey questionnaire to take account of these. Please take it and give us feedback on how the crisis is impacting you, including how and whether the Government measures are helping mitigate the effects. This data from our tech community is invaluable and it will be used to give feedback to the Government on their announced interventions and to inform any future ones.
Amidst many of the difficult stories you have shared with me, I have received countless examples of how tech is stepping up across the country. I’ll release a specific blog on this over the weekend but please do keep these initiatives coming.
For our part, Tech Nation has successfully run the first three online digital events covering remote staff management and fund raising during crisis periods. We will continue to grow such opportunities for our networks over the coming weeks. If you are in the middle of a fund raise, we have also put this blog together, following one of those webinar sessions with over 100 founders and CEOs yesterday, who are doing precisely that. Hope it’s useful.
As ever, please email info@technation.io if you have any questions.
Update: 19/03/2020The Government continues to keep options open for further measures to stem the spread of the virus, following yesterday’s announcement that schools would be shut down for all children bar some important exceptions.
We are awaiting final details on the various finance schemes from the Government and as soon as we have them we will share on this blog. For now, the Treasury has given a few more details around some of the initiatives, which can be found here. And Hambro Perks also have a useful write up of the Coronavirus Business Interruption Loan Scheme.
In the face of a dramatic shift in how we will lead our lives, the reliance on tech for education, health, nutrition and support are becoming ever more important. As a company we too are shifting much of our work online over the coming months and will seek to provide our networks with topical and useful information from our founders.
Update: 18/03/20Covid-19 is fast shaping up to be the challenge that defines us personally and professionally. We will confront this virus with the most high-tech response to a pandemic in human history. The tech industry like many others is facing huge challenges, but it also has a huge part to play in the fight against a once-in-a-century pandemic. Tech has the opportunity to help find rapid solutions to those challenges right in front of us, manage us through some trying times, and contribute to rebuilding an economy on the other side.
Like many organisations, we have specific challenges posed to us. But, just as we coach the businesses that go through our programmes, we are adapting what we do over the coming months to support you.
This will be a regularly updated blog that contains the latest advice from the Government to the sector, including details of the support they are offering to different industries, as well as being a constant source of innovation and inspiration about how tech is supporting the fight against this virus.
And we will pivot to offer advice on how to lead your business through this uncertain time, with regular webinars on a number of mission critical subjects.
As we all seek to isolate or distance ourselves physically from one another, let us digitally connect more closely than ever. We are all clear that there are significant challenges in healthcare, education, sustainability and perhaps even democracy in the months ahead. But across the piece, UK scaleup tech companies will be able to offer radical solutions in extraordinary times. Over the coming months, technological involvement in keeping services going, keeping businesses afloat and keeping people alive will be essential, impactful and exponential.
If you have a story you want us to feature, or need information that we currently don’t include, then please get in touch with us to let us know. Email us as info@technation.io.
For the latest updates of government business support for tech companies and community resources, visit our Coronavirus Info Hub.
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