More than 1,000 UK startups ‘collapsed’ due to COVID-19

Cars and cyclists pass through the Silicon Roundabout area, a technology cluster of high-tech companies located in Shoreditch and St. Lukes in East London. (Credit: Mike Kemp/Getty Images)
Cars and cyclists pass through the Silicon Roundabout area, a technology cluster of high-tech companies located in Shoreditch and St. Lukes in East London. Photo: Mike Kemp/Getty Images

More than 1,000 of the UK’s high-growth businesses have filed for administration, liquidation or dissolution since lockdown began, according to new research released today by Plexal and Beauhurst.

During this period, September brought a record number of filings — the highest monthly figure in 10 years – as the full impact of COVID-19 started to be revealed. 273 fast-growth companies filed for administration, liquidation or dissolution in that month alone, out of a total of 1,067 since the beginning of lockdown. That’s a 181% month-on-month increase compared with August.

While government schemes provided “valuable support to cash-strapped early stage companies struggling from the COVID-19 crisis,” said the researchers, “the sharp rise in startup deaths highlights the fading preservative effect of government support schemes.”

“Government initiatives alone are not sufficient to support startups most in need of funding and cash flow in the current economic climate,” said Andrew Roughan, managing director of Plexal. “It’s these businesses that will provide the innovation and jobs that will drive the UK’s economic recovery, and they need our urgent support.”

Earlier this year, the UK government announced a £1.25bn ($1.53bn) package of support for startups and tech businesses struggling as a result of the COVID-19 pandemic.

READ MORE: Coronavirus: UK startups get £1.25bn COVID-19 support from government

A new £500m investment fund was set aside for high-growth startups, while £750m of grants and loans for startups doing research and development were also handed out.

The fund provides convertible debt to startups, so if they can’t pay it back, it turns into equity. To date, the government has lent over £720m to more than 700 startups.

The Treasury

Did COVID-19 steal your sales? This is how 9 Latin American startups successfully entered e-commerce


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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.


Technological innovation and process optimization are booming. Changes and restrictions in physical interaction since the pandemic have forced companies to change the way they operate and do business, the recent McKinsey & Company survey “What 800 executives envision for the postpandemic workface ” conducted of executives of companies around the world, shows that a third of companies have accelerated the digitization of their supply chains, half have accelerated the digitization of their customer service channels, and two-thirds have more quickly adopted artificial intelligence and automation.

Undoubtedly, the pandemic has shown us that the digitization of companies of any size is necessary and that being prepared and being able to adapt quickly is essential. There has been an important evolution in consumer habits and in the adoption of purchasing through digital media, as mentioned in the eMarketer report, Latin America Ecommerce 2020 ( How COVID-19 will affect growth and sales in Argentina , Brazil and Mexico ), the region will have 191.7 million digital buyers and more than 10.8 million consumers will make a digital purchase for the first time this year.

In the region there are startups that are helping this entire process, standing out for presenting relevant innovations for sales processes, for promoting the digital transformation of companies through disruptive solutions that help them automate logistics and delivery processes, to increase productivity, for promoting customer loyalty and for allowing correct decision-making with the use of Big Data .

Here are some examples of these solutions, and the name of the startups that lead these changes, promoted by and belonging to Wayra , the Venture Capital of Telefónica

It’s Time For Startups To Use AI To Battle Tech Giants In Patent Wars

Technology giants such as Alibaba and IBM are eating startup innovators’ lunch. These behemoths are seeking to devour even more market share by publishing patents at unprecedented speed in emerging technologies such as blockchain.

As some of the richest companies on the planet, the corporations have the resources to manage the laborious search of existing patents and to overcome the outdated administrative hurdles so that they can file for intellectual property rights.

Patents are definitely old school. Patent laws started with the rise of the nation-state, so they began in the 18th century and were then fully developed in the 19th century. Some changes may have been made to reflect new technologies, but the basic patent laws haven’t evolved to meet the needs of the 21st century.

We’re patenting ideas based on today’s high-tech of artificial intelligence and blockchain with laws that were established centuries ago.

All this puts early-growth companies with game-changing inventions at a huge disadvantage.

Getting a patent is one of the most important strategic decisions a business can take. A patent not only protects a business idea from copycats, but it can also increase the value of the young company.

One of the reasons value increases is because a patent can block others from a market. Once a startup has it, they can make sure nobody else will enter that particular segment.

In a recent study, conducted by KISSPatent on patents in the specific field of blockchain, results showed an arms race between Alibaba and IBM. The Chinese e-commerce giant has published 10 times more blockchain-related patents than IBM in 2020, a year when blockchain patent numbers are generally skyrocketing. More blockchain-related patents were published in the first half of 2020 than in all of 2019, a year that had already seen three times more blockchain

Japan start-ups see hope on horizon

Hampered by cautious investors and a rigid corporate culture, Japan has produced just a handful of major start-ups. But there are signs that could be changing, industry insiders say.

Despite being the world’s third-largest economy, Japan is far behind the United States and China when it comes to producing “unicorns” — new comapnies valued at more than $1 billion in private funding.

There are nearly 500 unicorns worldwide, from Silicon Valley rental giant Airbnb to Bytedance, TikTok’s Beijing-based parent company.

But only four of these firms are Japanese, according to the latest list compiled by US analytics platform CB Insights.

“Relative to its GDP, Japan should have at least 50 to 60 unicorns,” said Gen Isayama, head of World Innovation Lab, a California-based company that provides advice and capital to start-ups, with a focus on Japan.

“In Japan, innovation efforts have always been led by big corporations,” he explained, with banks “more willing to loan money to these corporates rather than to invest in start-up companies.”

Japan’s venture-capital market, worth around $4 billion last year, is much smaller than the United States’ at $137 billion and China’s at $52 billion, according to several studies.

But even Japan’s own SoftBank Group, which has invested heavily in tech firms, tends to fund overseas prospects, including Uber and Alibaba, and has barely touched smaller homegrown companies.

– ‘Protected’ –

That lack of private capital for expansion can force Japanese start-ups to go public much sooner than their counterparts elsewhere.

But “if you go public too small you can never grow”, warned Isayama.

“In Japan, the standards for listing are very low, so there are a lot of tiny corporations, and many of them are satisfied with that,” said Takeshi Aida, founder and CEO of RevComm, a Tokyo-based AI start-up that hopes to launch

The top 12 VC firms most actively investing in early-stage AI startups

  • Artificial intelligence is one of the buzziest technologies of the past 20 years. 
  • Since 2000, investors have poured roughly $407 billion into AI startups, per data from PitchBook. 
  • In that time frame, the top 12 VC firms most active in early-stage AI investing by deal count have collectively closed a total of 708 Series A and B rounds, according to the data analytics firm. 
  • Visit Business Insider’s homepage for more stories.

Over the past two decades, artificial intelligence has quickly become one of the most buzzy technologies. 

Giants like IBM have doubled-down on AI-backed offerings, while a rush of startups have emerged that are trying to use the tech to overhaul operations ranging from stocking shelves to supply chain negotiations.

Along with that has come a bonanza of venture capital funding that has created so-called unicorns like Indigo Ag, UiPath, and SenseTime. In the past 20 years, investors have poured roughly $407 billion into AI startups, per data firm PitchBook. 

Since 2000, the top 12 VC firms most active in early-stage AI investing by deal count have collectively closed a total of 708 Series A and B rounds, according to research from the data analytics firm provided to Business Insider (the rounds that fit PitchBook’s criteria for “early-stage”). 

Below is a snapshot of each of the dozen firms, including well-known names like Andreessen Horowitz, Intel Capital, and GV. 

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