Is Scotland creating enough tech startup contenders? - Nick Freer

Global tech bank GP Bullhound swung into Edinburgh a couple of weeks’ back to present its Titans of Tech report to an audience of founders, investors, and advisers at Skybar on Bread Street, jointly hosted by Scottish law firm Shepherd and Wedderburn.

I was there with Trickle founder and CEO Paul Reid, and the room with a view, possibly one of the best in the city, contained some of the usual suspects from the local tech ecosystem - investment firms like Par Equity, Techstart Ventures, and BGF, and founders including PlayerData’s Roy Hotrabhvanon, and Cally Russell from Unfolded.

The 2022 Titans of Tech report lays out a record year for European tech, with as many unicorns created in one year as in the three previous years combined. According to GP Bullhound, there are now 283 tech companies valued at over $1 billion in Europe, with 125 companies reaching that status in the last year alone.

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Of course, economic headwinds are now in force, and will likely be even stronger as we move into 2023. And, the technology sector itself has experienced well-documented malaise, with lower company valuations followed by mass job losses.

Europe produced more tech unicorns last year than ever before
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With an eye on Europe, GP Bullhound’s managing partner Manish Madhvani frames it like this: “The European tech ecosystem continues to show its strength, demonstrated by the record value creation since last year. Now as inflation spikes to 40-year highs, Europe’s unicorn party is slowing, and growth companies are likely to be hit hardest as investor focus is shifting from growth to profitability. However, activity persists, and history shows that founders that react quickly and decisively will be able to seize unique opportunities to reposition for the future landscape and continue building category leaders.”

Back at Skybar, the GP Bullhound guys put up a slide on “The contenders”, startups contending for unicorn status and which the tech bank predicts will reach this milestone in the next two years “through showing the greatest ambition and being best positioned to take advantage of opportunities.”

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I’m sorry to say that there were no Scotland-based contenders on the slide. When put to the floor by GP Bullhound, who asked if anyone in the audience had a Scottish company they would put forward, the crowd was rather muted and only a couple of hands went up. Perhaps everyone was just feeling shy on the night, and the single company suggested was vertical farming specialist Intelligent Growth Solutions.

Later in the week, I was out with a C-suite executive from a tech company that secured one of Scotland’s largest ever exits in recent times. He agreed that the “ambition” and “seizing opportunities” points expressed by GP Bullhound are absolutely key.

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Nick Freer is the founding director of corporate communications agency the Freer Consultancy

Realising the importance of the North American market from the early days, this senior executive’s Edinburgh-based CEO spent “about half the year” shuttling between the East and West Coasts of the United States to meet prospective customers and shareholders. And this determination and time on the road paid dividends, both in terms of big-ticket sales and big name additions to the company’s investor cap table.

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No need for this particular CEO to repeat Marlon Brando’s famed lined from 1954 silver screen classic On the Waterfront: “I could’ve been a contender”.

Nick Freer is the founding director of corporate communications agency the Freer Consultancy

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