Tech Track 100 2015 Report
Contents 3 Introduction 4 This year s companies 5 Industry breakdown 6 Regional breakdown 7 Employees and job creation 8 Key statistics 10 15 years of Tech Track 100 11 Realising your opportunities 2
Introduction The Sunday Times Tech Track 100 league table identifies this year s fastest growing private technology, media and telecoms companies in the UK. This is the 15th year of Tech Track 100, the league table of Britain s fastest-growing private technology, telecoms and media companies. The league table has title sponsorship from Hiscox, and main sponsorship from Barclays, BDO and Business Growth Fund (BGF). The Tech Track 100 ranks private technology companies based on their growth in sales over the last three years of available data. The average sales growth for the 100 companies was 86% a year, a total of 2.4bn. They employ 13,000 staff, having added more than 9,000 jobs over the same three-year period, some as a result of acquisitions. Companies on the table include well-known names such as online flight search engine Skyscanner (51), online fashion portal Farfetch (17) and price comparison website money.co.uk (62). The top company this year is Ve Interactive, an advertising software developer that helps online retailers increase sales. The company grew revenues by 306% a year, from 313k in 2011 to 20.9m in 2014. Sean Duffy Managing Director Technology, Media and Telecoms +44 (0)7775 548118 sean.duffy@barclays.com 3
This year s companies Sales breakdown 11 companies reported sales in excess of 50m. They include IT services provider Maindec (44), travel management software developer Click Travel (90) and device impact protection maker Tech21 (26). Digital marketing agency Essence (100) reported the highest sales on the table of 211.4m. The next highest was fashion portal Farfetch.com (17) which reported sales of 199.2m (although this includes the value of all goods purchased through the site). Market research technology developer ServiceTick (67) reported the lowest sales at 5m. The top ranked company, advertising software developer Ve Interactive, saw sales growth of 306% a year, from 313k in 2011 to 20.9m in 2014. Growth in sales The number of companies in each range of compound annual growth rate (CAGR) of sales over the latest three years. >200% 3 175%-200% 3 150%-175% 8 125%-150% 4 100%-125% 7 85%-100% 5 70%-85% 12 55%-70% 26 <55% 32 Top 10 Tech Track 100 companies Rank 2015 Rank 2014 Company Activity HQ location Financial year end Av. 3-year growth p.a. Sales 2014/15 ( 000) In profit? Staff Founded Website 1 Ve Interactive Central London 31/12/2014 305.55% 20,891* Yes 840 2009 www.veinteractive.com Ecommerce technology developer 2 Neuven Manchester 31/07/2014 270.98% 36,870 Yes 37 2010 www.neuven.co.uk Staff administration software 3 FanDuel Edinburgh 31/12/2014 261.71% 34,399* No 400 2009 www.fanduel.com Fantasy sports game developer 4 Funding Circle Central London 31/12/2014 195.93% 13,102 No 182 2010 www.fundingcircle.com Peer-to-peer lending 5 RateSetter Central London 31/03/2015 184.36% 12,481* Yes 110 2010 www.ratesetter.com Peer-to-peer lending 6 1 LMAX Exchange West London 31/12/2014 181.30% 26,155 No 120 2008 www.lmax.com e-fx trading technology 7 Palringo Central London 31/08/2014 172.80% 8,398 Yes 34 2006 www.palringo.com Messaging and gaming platform 8 The Media Image West London 28/02/2015 171.10% 8,090* Yes 17 2009 www.the-media-image.com Digital marketing agency 9 Immunocore Abingdon 30/09/2014 168.25% 6,381 No 94 2008 www.immunocore.com Bio-technology developer 10 ImpulsePay Central London 31/12/2014 168.23% 11,599* Yes 10 2009 www.impulsepay.com Mobile payment technology *Supplied by company. Annualised figure. 4
Industry breakdown Software companies are the largest sector on the league table (23 companies), generating 493.5m of sales and employing 3,790 staff in their latest year. These range from companies producing workplace management software, such as Neuven (2), whose platform is used by supermarket chains to manage temporary staff to app developers Chelsea Apps Factory (16) and The App Business (24). IT consulting and services companies account for over a sixth of the table (15 companies). These include companies such as CloudReach (20) and essensys (52), which specialise in cloud computing services, as well as Infinity SDC (30), which provides data centres, and companies which combine service provision and expertise with the re-sale of IT equipment, such as GBM Digital (31). Together, the 15 companies generated sales of 330.6m and employed 1,201 staff in their latest year. 11 fintech companies feature on the league table, including number four company Funding Circle, which matches businesses looking for loans with investors, and 11% number five company RateSetter, which matches mostly individual borrowers and lenders online. 5% 23% 8% 9% 9% 15% Industry breakdown Software 23% IT consulting and services 15% Fintech 11% High tech manufacturing 9% Media and entertainment 9% Telecoms services and technology 9% Advertising technology 8% Online consumer services 5% Other 11% 9% 11% The benefit of the continued growth in software is the employment opportunities it creates across the UK, up-skilling young talent and creating new innovations, while helping to protect Brand Britain. Lorraine Ruckstuhl, Industry Director, Technology, Media and Telecoms at Barclays 5
Regional breakdown Greater London is home to the highest proportion of companies, with just over half (52) of this year s table based there. The next biggest region is the South East, with 15 firms. This covers the areas surrounding the M4 corridor technology hub, and there are a number of companies located in Surrey, Berkshire, Hampshire and Oxfordshire. These include Oxfordshire companies Immunocore (9) which is developing drugs that harness the body s immune system to fight cancer as well as Fidelity Group (74), a telecoms provider, and mobile phone designer Bullitt Group (12), based in Reading, Berkshire. The majority of companies on the league table are based in: Greater London 52 South East 15 Eight companies are headquartered in the Midlands. They include Newark s Reflex Gaming (45), which develops fruit machine games and INFOMEDIA (37) from Northampton, which enables people to charge small items like car parking and coffees to their mobile phone bills. 5 1 4 6 8 6 Regional breakdown of HQ locations in UK 15 Scotland 5 Northern Ireland 1 3 North West 4 South West 3 North East 6 South East 15 Midlands 8 Greater London 52 East 6 52 6
Employees and job creation Tech Track 100 companies employed 13,005 staff in 2014/15, which gives average revenues per employee of 182,972. Number of employees Number of companies in each employee range. >100 40 51-100 32 30-50 15 <30 13 Some 9,000 jobs have been added over the past three years. However, as a result of acquisitions, not all of these are new jobs. The biggest employers on the league table were EDM Group (43), with 1,324 staff, Ve Interactive (1) with 840, and Skyscanner (23) with 583. 13 companies employed fewer than 30 staff, including cloud service provider essensys (52), with 27 staff and sales of 10.3m, and mobile software developer Fonix Mobile (34), with 20 staff and sales of 28.1m. The characteristics we see underpinning the success of high growth tech businesses are the importance of planning and investment, strong leadership, attracting talent, knowing your customer and the need to invest in technology. It s not all about luck, as it involves a lot of hard work, but the rewards for those who are successful in the technology businesses are very high. Sean Duffy, Managing Director, Technology, Media and Telecoms at Barclays 7
Key statistics Profitability Tech Track 100 companies are not required to be in profit. However, 70 companies on this year s league table reported an operating profit in their latest available accounts, with 11 showing an operating profit margin of more than 20%. The combined profits of the 70 companies were 164.8m in 2014/15. Financial services comparison website money.co.uk (62) had the biggest profit margin on the league table at 66%. Telecoms services provider Onecom (79) saw the biggest profits on the league table at 19.4m. The average margin among the 70 profitable companies was 12.7%. 10 companies with the biggest operating profits Rank Company Activity Sales 2014/15 Latest operating profit Profit 2015 000 000 margin 79 OneCom Telecoms services provider 60,849 19,416* 31.91% 62 money.co.uk Price comparison website 23,290 15,430 66.25% 51 Skyscanner Travel search engine 92,897 10,764 11.59% 72 Apical Imaging technology developer 16,613 8,871* 53.39% 43 EDM Group Information management services 69,731 6,549* 9.39% 60 Core Group Telecoms services provider 33,263 5,756 17.30% 12 Bullitt Group Mobile phone designer 60,924 5,611 9.21% 93 EFC Group Oil and gas technology developer 34,129 4,917* 14.41% 83 EV Wellbore diagnosis technology 21,587 4,303* 19.93% 45 Reflex Gaming Gaming machines manufacturer 14,233 4,301 30.22% *Supplied by company. It s great to see many of our clients being recognised for their hard work and determination, helping tech in the UK to soar. We congratulate our clients who have made the Top 100, along with all of the other companies who are featured it s a great achievement. Sean Duffy, Managing Director, Technology, Media and Telecoms at Barclays 8
Sustained growth 47 companies on this year's list have not appeared on any previous Tech Track 100 league table. 20 companies make a second appearance this year, 13 appear for a third time in a row, and four make a fourth appearance. Essence (100) appears for the fifth time, while Skyscanner (51) appears for a sixth consecutive year. A total of 21 companies have been on the Tech Track 100 more than once before. Tech Track 100 companies are typically young and dynamic, with 90 founded after the turn of the century, and 12 founded in the last five years. Three companies were founded in 2011: payment systems developer Epos Now (13), which reported latest sales of 5.2m, digital marketing agency Captify (25, 6.3m), and advertising technology company Affectv (11, 5.1m). Characteristics of an average Tech Track 100 company Sales Average growth over three years Sales in 2011/12 Sales in 2014/15 86% p.a. 4.9m 23.8m Staff Typical number of staff in 2014/15 130 Typical increase in staff over three years 91 Profits Other Operating profit in 2014/15 300k Number of profitable companies 70 Margin (profitable companies only) 12.7% Region Greater London (52) Sector Software (23) Founded 2005 Majority ownership Entrepreneur and/or founders (66) Angel, venture capital or corporate investment 40 66 Majority-owned by entrepreneur and/or founders 22 Controlled by private equity, venture capital firms or corporate investment The remaining 12 have no overall majority owner. 9
15 years of Tech Track 100 Tech Track 100 was launched 15 years ago to recognise the success of Britain s fastest growing private technology, media and telecoms (TMT) companies by sales. Since its launch, more than 850 British companies have appeared on the league table. 39 companies have floated on the stock market, including: Sophos, the Oxford-based IT security firm, first featured in 2002 with sales of 22.6m, and floated this year valued at 1bn Cambridge Silicon Radio (CSR) featured in 2003 and floated in 2004 with a value of 240m, and was acquired by US group Qualcomm Inc. in August 2015 valued at $2.2bn Abcam was valued at 58m when it listed on AIM in 2005, and is now worth 1.2bn Ocado, which first featured in 2006, was valued at 937m when it floated in 2010, and is now worth 2bn Just Eat was valued at 1.5bn when it floated in 2014, and is now worth 2.6bn Zoopla floated at 919m in 2014, and is now worth 1bn. Many other Tech Track 100 companies have been sold, such as web security firm MessageLabs, which appeared on the first league table, and was sold to Symantec for $965m in 2008, LOVEFILM, which was acquired by Amazon for a reported 200m, and NET-A-PORTER.com, which was bought by Richemont for 350m, and valued at 1.5bn in a merger announced this year with Italian company Yoox. The vital statistics of the league table companies have changed significantly over the last 15 years. The total sales figure is over five times as large at 2.4bn, and the total staff has more than doubled. The share of Tech Track 100 companies based in London has grown from 27% to 52%, mostly at the expense of the South East, which has seen the sharpest fall from 32% to 15%. Total sales Total staff Average staff increase 414m 2.4bn 5,270 13,005 33 91 2001 2015 10
Realising your opportunities The future holds a lot of potential for this growing market and our Technology, Media and Telecoms team understand the challenges and opportunities that these sectors present. An understanding of the financing options available is crucial for any company looking to expand and we re here as a financial partner to help ensure that the right growth strategies are in place. This report was conducted by the Fast Track research team between May and August 2015. Fast Track is an Oxford-based networking events and research company. The final 100 companies are ranked by growth in sales over their latest three years of available accounts, i.e. between 2011 and 2014, or 2012 and 2015. Companies were selected from a database of around one million private companies in the UK, followed by extensive desk, telephone and case study research. For the full criteria see www.fasttrack.co.uk For further information, please contact: Sean Duffy Managing Director Technology, Media and Telecoms +44 (0)7775 548118 sean.duffy@barclays.com Lorraine Ruckstuhl Industry Director Technology, Media and Telecoms +44 (0)7917 503442 lorraine.ruckstuhl@barclays.com 11
Building a better future. Piece by piece. How Barclays is helping build-your-own computer company Kano unlock its potential. Kano office, London Yonatan Raz-Fridman and Alex Klein, Co-founders, Kano Juliet Rogan, Relationship Director, Barclays Kano s vision is simple. A computer anyone can build and program themselves. Recognising Kano s potential to inspire a generation of coders, we provided a USD$1m working capital facility to support Kano s vision. Co-founder and CEO, Yonatan Raz-Fridman says: Our ambition is to help young people become a powerful force. Coding is increasingly important in today s society, and Barclays is helping us to impart a valuable skill. To find out how we can help your business succeed, call 0800 015 8642* or visit barclays.com/corporatebanking *Lines are open Monday to Friday, 8am to 6pm. To maintain a quality service we may monitor or record phone calls. Local mobile call charges will apply. Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP.
barclays.com/corporatebanking Source: Sunday Times Tech Track 100 September 2015. Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP. September 2015.