Business Leader Magazine: April/May 2022

ISSN 2632-7155

9 772632 715003 9.75 APRIL/MAY 2022 • £9.75

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the cost of conflict Business Leader covers the war in Ukraine and what it means for UK businesses

BRITAIN’S LEADING MAGAZINE FOR ENTREPRENEURS AND BUSINESS PROFESSIONALS

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CONTENTS

IN THIS EDITION 4

COVER STORY: THE COST OF CONFLICT After sending shock waves through the world economy, we examine how the war in Ukraine will affect companies in the UK

10 FEATURE: CHINA TIGER ECONOMY How is the UK reshaping trade ties with economic powerhouse China post-pandemic?

14 AGENDA: LEVELLING UP Described as a complete ‘system change’ and plan by the government to spread opportunity and prosperity around the UK, what criticism has the government already received?

10 18 FEATURE: SCALE-UP OR SCALE-OUT? What is the better option? And how does the UK compare to the rest of the world?

28 FEATURE: TECH TRENDS What challenges remain when it comes to finding talent, tackling climate change and boosting inclusion and diversity?

38 FEATURE: ALTERNATIVE LENDING

61 Business Leader - Inspire • Inform • Connect

We look into the industry to see how it has changed in recent years and why it is becoming more mainstream

56 CEO IN FOCUS: AMALI DE ALWIS We speak to the CEO of Subak, the world’s first not-for-profit accelerator that scales climate impact

61 TOP 32: AI COMPANIES IN THE UK For our latest Top 32 list, we have profiled the UK’s leading artificial intelligence (AI) companies and the senior figures that lead them

74 FEATURE: IS SOCIAL MEDIA AT CRISIS POINT With the monumental rise of social media over the last decade, we investigate if social media is good or bad for business

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NEWS

theo paphitis and business leader join forces for scale-up awards EDITORIAL Oli Ballard - Director E: oli.ballard@businessleader.co.uk James Cook - Content Manager E: james.cook@businessleader.co.uk DESIGN/PRODUCTION Adam Whittaker - Head of Design E: adam.whittaker@businessleader.co.uk SALES Emma Filby - Head of Advertising E: emma.filby@businessleader.co.uk Sam Clark - Head of Awards Sponsorship E: sam.clark@businessleader.co.uk DIGITAL & WEB Josh Dornbrack - Head of Multimedia E: josh.dornbrack@businessleader.co.uk Gemma Crew - Social Media & Community Manager E: gemma.crew@businessleader.co.uk Joshua Phillips - Website Development E: joshua.phillips@businessleader.co.uk CIRCULATION Adrian Warburton - Circulation Manager E: adrian.warburton@businessleader.co.uk ACCOUNTS Jo Meredith - Finance Manager E: joanne.meredith@businessleader.co.uk MANAGING DIRECTOR Andrew Scott - Managing Director E: andrew@businessleader.co.uk

OUR COMMITMENT Business Leader Magazine is committed to a zero carbon future and supports the World Land Trust by using recyclable paper wrap rather than plastic polywrapping. Carbon-balanced PEFC® certified paper, which is sourced from responsible forestry, is produced in an environmentally-friendly way to offset our CO2 emissions.

Entrepreneur and Dragons’ Den icon Theo Paphitis is collaborating with Business Leader for its upcoming Scale-Up Awards, which celebrate the country’s fastest-growing companies.

Each week, Theo rewards small businesses that tweet him @TheoPaphitis and describe their businesses in one tweet including the all-important hashtag #SBS.

Officially announced at Theo’s Small Business Sunday (#SBS) annual event – #SBSEvent2022 in Birmingham on February 25th – a special new category recognising small businesses with potential will be launched at the 2022 Scale-Up Awards. The new award, the #SBS Small Business Award, will give Theo’s #SBS winners the opportunity to put themselves forward to the prestigious judging panel, with an overall winner announced at the inperson awards ceremony to be held in London later this year.

These businesses can now gain further recognition by entering the SBS Small Business Category at the Scale-Up Awards, where they will have their submissions scrutinised by a panel of business leaders.

Small Business Sunday, shortened to the hashtag #SBS on Twitter, was created by Theo Paphitis in October 2010 and is one of the leading small business communities in the UK.

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ENTER AT: SCALEUP-AWARDS.CO.UK

Theo Paphitis comments: “#SBS has become an institution for aspiring business leaders and the Scale-Up Awards will provide another positive arena for them to learn, compete and have their achievements recognised.

“Entrepreneurs do better when they have positive networks and role models, and this collaboration will provide both. I would encourage you to enter if you are a winner in the #SBS network – a fantastic opportunity.”

THE UK’S LEADING AWARDS CELEBRATING SCALE-UP BUSINESSES April/May 2022

Why some CEOs go further and higher As a business leader, you know that the hardest climb isn’t Kilimanjaro, Denali or Everest. It’s the CEO’s leadership journey, and it’s fraught with all kinds of challenges and opportunities, setbacks and advances. The good news is you don’t have to go it alone. You can travel with an experienced guide who knows the lay of the land and an elite team of peers who’ve got your back.

You can equip yourself with world-class resources to navigate changing environments and uncertain conditions. You can take an approach forged over 60 years and travelled by 100,000+ CEOs of small and medium sized businesses around the world.

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Start with your FREE guide: Journey to the Summit The CEO’s 7 Laws of Leadership Visit vistage.co.uk/what-is-the-climb/

COVER STORY

the cost of

conflict The war in Ukraine poses an unimaginable human cost. It is also sending shock waves through the world economy. With hundreds dead and more than half a million fleeing the country, this tragedy will have significant, long-term human and economic consequences.

Market volatility has substantially increased since Russia's invasion, alongside rising costs of raw materials and increasing manufacturing prices, further denting an already weak demand in certain sectors.

This latest humanitarian crisis could knock more than a percentage point off global growth this year and add two and a half percentage points to inflation, according to the OECD, calling for targeted government spending hikes in response. Concerns abound over the two fundamental “Fs” of commodity markets: food and fuels.

IMPACT ON GLOBAL MARKETS Russia and Ukraine are some of the largest producers of wheat globally. Together, they account for 29% of all wheat exports. But with a war raging on, those exports are in danger.

Adam Slater, Lead Economist, Oxford Economics, recognises the impact of the war on global commodity prices. He tells Business Leader readers: "Prices for energy products such as oil and gas have risen sharply and there have also been significant rises in the prices of other commodities whose supply might be disrupted, including wheat and corn."

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Thomas Pugh, economist, RSM UK, agrees: "From a global point of view, the most obvious impact is in commodity markets. For example, the prices of oil and wheat are up by 66% and 78% y/y respectively, but almost all major commodity prices are significantly up.

Global equity markets have been relatively resilient and have recovered some of their losses recently," he tells Business Leader.

"PRICES FOR ENERGY PRODUCTS SUCH AS OIL AND GAS HAVE RISEN SHARPLY AND THERE HAVE ALSO BEEN SIGNIFICANT RISES IN THE PRICES OF OTHER COMMODITIES WHOSE SUPPLY MIGHT BE DISRUPTED, INCLUDING WHEAT AND CORN." Adam Slater

The war introduced new uncertainty to a stock market that already had a shaky start to the year. Slater reveals the knockon effects: "Other financial market effects include a decline in global stock markets, especially in Europe, which is seen as most exposed to the negative impacts of the war due to its geographical proximity and reliance on Russian oil and gas. There has also been some widening of high yield credit spreads, reflecting reduced risk aversion and an increase in longterm government bond yields, especially

in Europe. On currencies, the dollar has gained modestly while the Russian rouble has weakened sharply and some emerging market currencies have weakened modestly," he says.

The war will give a powerful push towards global inflation and will dampen the already limp recovery from the pandemic. David Belle, Founder and Director, Macrodesiac, thinks the war catalysed an already strenuous situation: "We are seeing real problems stemming from our commodity staples and their prices. Grain, wheat, natural gas and oil have all seen rapid price increases over the last month or so, putting more strain on consumers. One of the leading causes for the Arab Spring were high food prices, specifically wheat, and we’re starting to see some mentioning of countries like Egypt being dissatisfied with the cost of the commodity."

Belle is also foreseeing changes in the buoyant housing market: "We are very much an ‘aspire to own your own home’ culture, and many who have bought over the last year or two are likely going to find that they have bought the top of the market, since higher rates coupled with already stretched pockets from price inflation are almost a double whammy in the short to mid-term. But arguably, this is a good thing, since current average prices to salaries for London are at about 8-10x. A cooling off is definitely needed,” he adds.

THE TECH CHALLANGE The Russian invasion has already had an impact on the energy and commodities

April/May 2022

THE COST OF CONFLICT market. However, there’s another major industry that will take a hit: tech. Tech accounts for over 4% of Ukraine’s GDP, and is growing fast. For firms with Russian investments and operations, the invasion of Ukraine is devastating but not totally unexpected.

MobiDev, a software engineering company incorporated in the US, has 400 engineers in Ukraine. Most of their clients are US, EU and UK-based businesses. After 2014, when Russia annexed Crimea and occupied the near-border Donetsk and Lugansk regions, MobiDev implemented a business contingency plan. They moved all the data and infrastructure to the cloud outside Ukraine, set up secure remote access for employees, launched a fully operational office in Chernivtsi and a front office in Poland.

IT professionals, not only in the US and the UK, but even in popular software outsourcing destinations like Eastern Europe. Ukraine alone is home to over 250,000 IT specialists, many of whom have been forced to relocate to safer regions of Western Ukraine to continue their work.

This is a very important talent market for many UK companies, and it keeps operating even during the war," she says.

are affected because of exposure to rises in European gas prices and to potentially weaker growth in mainland Europe.

"The London All Share index is down around 4% since the conflict began. UK 10-year gilt yields have risen slightly after an initial decline. The pound has lost around 1% against a broad basket of currencies, mostly due to a decline of around 3.5% against the US dollar," he says.

Regarding the challenges associated with the current displacement, Oleksii Tsymbal, Chief Innovation Officer, MobiDev, says: “Alongside securing people's safety, we had to bring confidence to our clients and fulfil our obligation to deliver software products.

MobiDev implemented daily updates for our clients with transparent information.”

Tech talent is the Ukraine was initially compromised, according to Tsymbal. “Today, all project teams are fully operational as people have reached secure locations. But during the first week, the company could bring no more than 65% of our functional capacity.”

Client trust is paramount and even though MobiDev will not be run out of the Ukraine, there have been some changes. “Although western Ukraine is a relatively safe place, we have to assure stability for our clients by moving some operations to Poland. But we're not planning to leave Ukraine. We are keeping our office in Chernivtsi. And will reopen offices in Kharkiv and Mykolaiv as soon as it is safe. On behalf of businesses in Ukraine, I'd like to urge working with Ukrainians, as it is the best support for the people and the country," Tsymbal says.

A spokesperson for N-iX, one of the largest Ukrainian technology companies with over 1,700 specialists, highlights the negative impact of the war on many industries across the globe.

“N-iX works with many enterprises and Fortune 500 companies delivering software development services. In recent years, we’ve seen an acute shortage of

"Even during the first few weeks of the war, N-iX kept service delivery level above 90%. Our clients are stunned by this level of service at such a harsh time for us, but our people really came together trying to do what they can do best. The Ukrainian tech industry is one of the main contributors to the country’s GDP, so the sector is banding together, not only to help the victims of Russia’s invasion but also to support the Ukrainian IT industry and the country’s economy," she adds.

There are few conflicts since WWII that have had the potential to directly impact the cost of living in the UK. Slater points out that although the UK is less directly reliant on Russian energy supplies than many other European economies, its markets

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"THE UKRAINIAN TECH INDUSTRY IS ONE OF THE MAIN CONTRIBUTORS TO THE COUNTRY’S GDP, SO THE SECTOR IS BANDING TOGETHER NOT ONLY TO HELP THE VICTIMS OF RUSSIA’S INVASION BUT ALSO TO SUPPORT THE UKRAINIAN IT INDUSTRY AND THE COUNTRY’S ECONOMY."

Cont. 

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COVER STORY

THE COST OF CONFLICT

Economists see euro area inflation running 1.8% higher, at 5.7%, because of the war, while UK inflation is expected to come in 1.3% higher, at 6.7%, according to Deloitte’s Chief Economist, Ian Stewart.

The surge in commodity prices that followed Russia’s invasion of Ukraine may worsen the squeeze on UK living costs and reduce growth.

Central banks are now put into a precarious situation, according to Belle: “Hike aggressively to contain inflation while being cognisant of the possibility they’re hiking into peak growth & demand, or remain softer on tightening monetary policy in the hope that inflation resolves itself?”

Belle concludes: “In a US midterm year, I am unsure the latter is a viable possibility specifically for the Federal Reserve.”

Pugh recognises the impact of rising energy prices. “The biggest impact in the UK is on the price of natural gas and electricity, which are up by over 400% and 300% y/y respectively. The FTSE 100 has proved relatively resilient, but the more domestically focused FTSE 250 has fallen by more, reflecting the fact that the UK economy will be hit hard by soaring energy prices,” he says.

However, Belle offers some optimism for UK markets: “I think the UK has better potential to fight inflation than the US, or even the ECB. We aren’t used to ballooning stock markets, so there is not necessarily a fear that increasing rates will deleverage the FTSE wiping off a tonne of wealth.”

"THE BIGGEST IMPACT IN THE UK IS ON THE PRICE OF NATURAL GAS AND ELECTRICITY, WHICH ARE UP BY OVER 400% AND 300% Y/Y RESPECTIVELY. THE FTSE 100 HAS PROVED RELATIVELY RESILIENT, BUT THE MORE DOMESTICALLY FOCUSED FTSE 250 HAS FALLEN

BY MORE." Thomas Pugh

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SANCTIONS SO FAR The Western response to Russia’s invasion will initially focus on sanctions.

The measures against both the banks and individuals include UK asset freezes, a travel ban and prohibition on British individuals and businesses dealing with them.

The N-iX spokesperson says: "Termination of business operations and exerting pressure on Russia, calling and lobbying for wider and more comprehensive economic sanctions is imperative for restoring peace in Ukraine and saving European democracy, which must be our top priority."

Dealings with the Russian Central Bank and Russian travel to and through 33 countries’ airspace has been banned, billion-dollar projects have been halted, many Russian banks were blocked from using SWIFT, and powerful members of Vladimir Putin’s inner circle were individually sanctioned.

MobiDev strongly support sanctions: "They are a powerful tool to stop the Russian war machine. Here in Ukraine, we understand that sanctions are an expensive weapon for our allies. But it saves the lives of Ukrainian people and will save even more as they progress."

Economic forecasts shift and the course of the conflict is unpredictable. It is not hard to imagine circumstances, such as an acceleration of the conflict or a cutting off of Russian gas supplies to Europe, that would increase the scale of the shock to growth and inflation. Equally, communication between the sides may take precedence, paving the way to end this devastation.

With a war, increasing inflation, rising interest rates, and COVID making a comeback in China, volatility is the bottom line. 

April/May 2022

NEWS

COMMENT

WHEN ALL HELL BREAKS LOOSE, STICK TO THE PLAN

Fresh chocolatiers secure multiple investments on Dragons’ Den Russell & Atwell, a Birmingham-based fresh, chilled chocolate business, recently appeared on Dragons’ Den, securing investment from Steven Bartlett and Peter Jones.

Founded by Steve Russell and Giles Atwell, the pair received a clean sweep of offers from the Dragons, but eventually set a deal with Steven Bartlett and Peter Jones, offering them each 10% of the business for a £90,000 investment.

Giles Atwell comments: “We’re blown away by having five offers. We came into the Den openminded as to who we wanted, but the five offers blew us away, and gave us quite a dilemma. In the end, we chose the ‘dream team of on and offline – Steven and Peter – and we haven’t looked back since!”

Steven Bartlett adds: “Chocolate is my ultimate guilty pleasure and salted caramel is my all-time favourite flavour, so the Russell & Atwell Fresh Salted Caramel chocolates really sealed the deal for me. The product is already incredible and has a strong USP, so I knew with a little guidance and marketing, we could really make it explode.”

view the latest edition here:

A few years ago, I had the opportunity to meet Antony Jenkins. He became CEO of Barclays in the wake of the Libor scandal that saw his predecessor Bob Diamond forced to resign in disgrace.

Jenkins had a heck of a task on his hands.

Barclays was accused of acting irresponsibly, customer trust Paul MacKenzie-Cummins was almost eradicated, and the Managing Director, Clearly words ‘fraudulent’ and ‘greedy’ hung over it like a hangman’s noose waiting to claim its next victim. When I asked how he was able to successfully regain stakeholder confidence and shift perception of the bank, he simply replied: ‘When crisis strikes, tell it first and tell it fast.’

When the reputation of the business is being called into question, it is easy to sit it out in the hope that the crisis will soon blow over and soon be forgotten. It is very easy, yes, but incredibly foolish and risks irreparable reputational damage.

Equally, there are those who have been brilliant in showing others how a crisis should be managed in a way that positively shapes – even enhances – public perception. Take McDonald’s as a case in point.

The burger behemoth faced widespread public backlash after delaying its decision to cease trade in Russia in the wake of the invasion of Ukraine.

With momentum gaining to boycott the brand, McDonald’s managed their communications superbly well.

In a statement, McDonald’s explained that the decision was not a simple choice of either black or white. Rather, they pointed out that the company employs 62,000 people in Russia and Belarus whose livelihoods they are responsible for. Not to mention the innumerable community and social initiatives the company supports that would lose out by any withdrawal.

McDonald’s avoided taking a knee-jerk reaction like many of their competitors and opted for a well-reasoned decision-making process. As a result, they won more supporters than detractors A crisis doesn’t always spell disaster. The key is in being aware of the issues that might affect it, preparing for all possible outcomes, and ensuring there is a sound crisis communications plan in place. In doing so, organisations can navigate any storm and steer themselves towards calmer waters without inflicting any long-lasting damage to their reputation or bottom line.

If you need guidance on developing your postpandemic communications strategy, get in touch.

T: 0333 207 9477 Business Leader - Inspire • Inform • Connect

clearlypr.co.uk 7

COLUMNIST

Global Markets in Focus In this column, my objective is to take you around the world to discuss the business, economic and financial mega-trends which are top-of-mind for executives, investors, and policymakers.

Gregory Perdon Co-Chief Investment Officer Arbuthnot Latham

@gregoryperdon USA On the red-hot topic of inflation, high profile investors are criticizing the Federal Reserve for failing to control rising prices.

And critics are right to throw their toys out of the pram. Inflation has soared. But the Fed finds itself between a rock and a hard place. On the one hand, if they tighten too quickly by raising rates and unwinding bond purchases, they risk slowing economic growth and potentially sending the economy into a recession. On the other hand, if they remain dovish for too long, they risk price surges leading to demand destruction and financial instability which might be even more dangerous.

No one likes the two-handed economist.

So, what’s the best hand to play? Over the coming months, the Fed will most likely continue to tighten but at a much slower pace than previously expected due largely to the increased uncertainty presented by the tragic events in Ukraine. Slow, steady, and well-telegraphed monetary action will hopefully help moderate some of the inflationary pressure. But it would be

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wishful thinking to believe the Fed will take the punchbowl away too quickly and risk a major policy mistake.

Has the Treasury Department reacted?

Janet Yellen, US Treasury Secretary and former Chair of the Fed, has refused to offer an inflation forecast for the end of the year but has stated that she does not expect a recession in the US. What’s her rationale?

She thinks the US benefits from both a strong economy and a resilient labour market. She is right on both counts. Other

reasons to remain positive include a strong housing market (house prices up 18.5% year-on-year in 2021 with the average size of new loans hitting a record) and easy access to credit. Let’s hope the optimists are correct!

How have the investors and analysts reacted? Goldman Sachs has lowered its target for the S&P 500 index for a second time this year, implying less confidence in US equities. What’s their thinking? Higher commodity prices translate into less

April/May 2022

GREGORY PERDON

consumer demand and weaker economic growth. That doesn’t feel very bullish…

EUROPE As if the inflation backdrop was not uncertain enough, it could get murkier.

What are two factors which might contribute to further price increases? Russia cutting natural gas supplies to Europe via the Nord Stream 1 pipeline and its continued assault on Ukraine leading to slashed harvests, and less food stock. We were hoping for a COVID recovery. We are getting anything but - as global trade begins to decline and investors get defensive.

Speaking of defense, spending on armament is about to go through the roof as Germany announces intentions to boost expenditure ASAP, with France to follow. President Putin may have intended to weaken NATO, but it appears that he is achieving the exact opposite.

Finally, the ECB is hinting it may change course over the coming months to stop net bond purchases in Q3 and potentially raise rates in Q4. The Euro has been weak of late and we have profited from this in our GBP portfolios. But will this end soon? That’s a big debate for our investment committee but I suspect we will moderate our negative position on the Euro in the near-term and take profits.

UK Our economy bounced back quickly at the beginning of the year, but it feels like old news as the ‘soaring costs of living’ dominates headlines. That said, consumer

spending did strengthen in February (13.7 % higher than pre-pandemic levels) as offices reopened and social life resumed.

But this all changed with the Russian invasion of Ukraine. A big question now facing investors and policy makers is around energy security and whether netzero is going to take a back-seat to military expenditure. Can we achieve both? Do we have the budget?

Prime Minister Boris Johnson is developing plans for a new energy supply strategy to counter the high energy prices. The new plan could include more oil and gas production but one thing for sure is that we can all expect more nuclear generators at a power-plant near you soon.

"A BIG QUESTION NOW FACING INVESTORS AND POLICY MAKERS IS AROUND ENERGY SECURITY AND WHETHER NET-ZERO IS GOING TO TAKE A BACK-SEAT TO MILITARY EXPENDITURE. CAN WE ACHIEVE BOTH? DO WE HAVE THE BUDGET?" ASIA The first big question on investors’ minds as it relates to Asia is whether the commodity shock will derail the Japanese economy.

Our response is probably not, but there has been an impact indeed as Japan registered

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its biggest current account deficit since the start of 2014 - not encouraging! But the Bank of Japan appears adamant on remaining accommodative (unlike their peer group) and the office of the PM Fumio Kishida seems determined to supply fiscal support. Perhaps Japan will be able to weather this volatility?

On China, the big question remains - can the property market recover? The real estate market represents a significant percentage of GDP which has been slowing.

Will the recent headwinds in the property market serve as a drag on economic momentum? China’s new strap line is ‘homes are for living, not for speculation’.

This should tell us something.

However, the recent sell-off in Asian high yield debt and more specifically in the price of bonds linked to Chinese developers may indicate there is significant value on the table. The property sector is undergoing a major transformation as the government forces debt-ridden developers to cut leverage and increase liquidity through wide-ranging regulations.

We are not alone in looking at this sector.

Many professional investors are lining-up and readying themselves for when the Chinese central bank starts easing more aggressively. We mustn’t forget what happens when monetary authorities begin to add stimulus… Bonds usually do well.

A mirage in the Gobi Desert or a golden opportunity for the taking? Now that’s a question worth considering…

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FEATURE

post-pandemic:

reshaping trade ties with china China - a major player in the global financial and political industry - is an economic powerhouse.

Companies have poured into the country for decades, taking advantage of the country’s manufacturing prowess, cheap labour and an enormous market.

In 2020, global trade fell by 8.9%, the sharpest drop since the 2007 economic crisis. The Covid-19 pandemic caused significant disruption to international trade, and China was no exception, suffering huge economic, health and social consequences. However, tough diplomatic rhetoric, turbulent bilateral tensions and a deteriorating USChina relationship reflect China’s growing confidence in international affairs.

UK-China relations experienced a 'golden era' during the 2015 - 17 Conservative government but they have become increasingly strained, amid growing controversy over the Chinese multinational company Huawei’s UK 5G mobile phone network and increasing apprehension about the erosion of the ‘one country, two systems’ status quo in Hong Kong. However, the UK Department of International Trade (DIT) is in ministerial talks with the Chinese government for the first time since 2018. The government hopes to reduce market barriers as the annual UK-China Joint Economic and Trade Committee, which has not met for four years amid increasing tensions, is set to re-open.

A Government spokesperson from the DIT told Business Leader: “The UK will pursue a positive trading relationship with China where it supports British jobs and growth, while ensuring that our national security, freedom and democracy are protected. And working with allies, we will hold China to its international commitments.”

OPPORTUNITIES FOR UK FIRMS The number of households in China classed as middle-class has surpassed that of the US at 109 million. This growth in consumption has unlocked various opportunities for UK firms. The DIT noted in a report last September that China’s growing middleclass – which will add another 400 million people in the next decade – is a clear opportunity for UK businesses.

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A spokesperson from the China-Britain Business Council (CBBC) says: “China remains one of the world’s fastest-growing markets for UK companies.

For example, ONS data shows that China has been the only major market where demand for UK consumer goods (excl. oil and gold) has increased throughout the pandemic.

"Exports to China of these goods have increased by 14.6% over the last two years, whereas comparable exports to other major economies plummeted. Food & Drinks exporters have also benefited from higher Chinese demand, when most of the other traditional export markets suffered a decline.”

UK-China trade reached £81.1bn in the four quarters to the end of Q3 2020. Traditionally, established cities including Beijing, Shanghai and Guangzhou were the go-to. As these markets mature, competition increases and costs rise, UK firms look to underdeveloped cities to expand. Business prospects across various sectors exist in these emerging markets, thanks to urbanisation, low input costs and governmental support.

Regional cities including Dalian, Qingdao and Tianjin provide more clients, new markets and competitive costs. These prosperous regions are mainly located in the Bohai Rim, the Yangtze River Delta and the Pearl River Delta.

Manufacturing and R&D opportunities are abundant in cities such as Chengdu and Xi’an, and service clusters are found in Suzhou, Hangzhou and Wuxi.

These cities offer all the business benefits that come with economic expansion, rising purchasing power and a growing population.

China’s economy grew 8.1% in 2021. Growth in the last three months of 2021 was better than expected, though China’s zero-Covid policy means some cities have gone back into lockdown.

Shanghai, China

April/May 2022

CHINESE TIGER ECONOMY

CHANGING TONE Links between China and the outbreak of Covid-19 has seen an increase in prejudice against the Chinese community in the UK. UK-Chinese relations are a crucial aspect of the UK’s foreign policy, both before and after the pandemic.

David Henig, Director, UK Trade Policy Project European Centre for International Political Economy (ECIPE), recognises the challenges: “The Chinese market remains as it always was for UK firms, potentially large but with a lot of problems, to which the pandemic restrictions have been added.”

British public and political perceptions of China in 2020 were predominantly negative, having worsened significantly over the preceding years. “The tone has certainly changed, but the main drivers are more aimed at the intensifying competition between the US and China as well as the debate regarding the potential cybersecurity risks,” adds the CBBC spokesperson.

In September and October 2020, the Sinophone Borderlands Project at Palacký University, Olomouc, conducted a wide-scale survey of public opinion towards China in 13 European countries, including the UK. Overall sentiment towards China in the UK was negative, with 62% reporting 'negative' or 'very negative' perceptions. When asked about the UK’s foreign policy priorities in China, cyber security, human rights and global issues scored above trade and investment.

Covid-19 was also the phrase most frequently associated with China, according to the survey, suggesting that China’s reputation has been tarnished by its handling of the crisis, alongside its hostile style of diplomacy.

Heing continues: “Hopes of improved operating conditions have really disappeared, and while some firms report a relatively straightforward experience, for others there have been many issues. Increased concern across the west about whether supply chains include forced labour are also likely to make operations difficult.”

The Peng Shuai controversy began with a socialmedia post. Peng, a former world No. 1 player in doubles, alleged that the former Vice Premier Zhang Gaoli sexually assaulted her. The November 2021 social media post was swiftly deleted, and Ms Peng disappeared for weeks, sparking global concern. The DIT have called on the Chinese authorities to assure the safety of Peng Shuai and are following her case closely.

Cont. 

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FEATURE

THREATS GOING FORWARD China remains a challenging place to do business. The effects of travel bans, and the disruption of production and shipping, quickly rippled through global production and supply chains. Henig also acknowledges an uneasiness around disenfranchised workers as an ongoing threat. “Increased concern across the west about whether supply chains include forced labour are also likely to make operations difficult.”

The war in Ukraine is threatening further disruption. Russia’s recent invasion of Ukraine has businesses throughout Europe and the UK bracing for even higher inflation and disruption to their supply chains, amplifying an already tattered economy post-pandemic. China has ruled out joining the international financial blockade of Russia, and Chinese and Russian leaders declared that the friendship between their countries ‘has no limits’. UK businesses need to examine not only their direct exposure to the conflict, but also the exposure of their suppliers.

Between January and February 2020, the Purchasing Managers’ Index for the manufacturing sector in China dropped by almost 50%, according to the National Bureau of Statistics of China, 2020.

Regulatory compliance risks, including insufficient time to comply with new regulations, is a growing challenge for UK companies. Furthermore, the Covid-19 crisis highlighted how fragile global production networks are, and how quickly problems arise when China temporarily struggles to supply.

The 2020 World Bank’s Doing Business report ranks China 31st in the world for overall ‘ease of doing business’ and, according to the World Economic Forum, China ranks 28th on the Global Competitiveness Index. Yahoo withdrew from China in November 2021 due to an ‘increasingly challenging business and legal environment,’ according to a statement by the company. This followed on the heels of a similar move made by Microsoft’s LinkedIn, who left because of ‘a significantly more challenging operating environment and greater compliance requirements in China.’

Post-pandemic trade requires measures to boost innovation and mutual respect, as foreign companies continue to complain

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about lengthy, opaque administrative procedures, with permits, registration and licensing.

Linda Middleton-Jones, MD at International Trade Matters, reinforces the importance of respect and understanding when trading abroad: “Visits, missions, trade shows and conferences in both countries underpin the value and sustainability of both supply and demand in volatile trading conditions.

Relationships are key to providing credibility and the loyalty of both parties, it is imperative to be visible, respectful and appreciative of both cultures.”

INTELLECTUAL PROPERTY RIGHTS (IPR) Intellectual property infringement is widespread in China, and inconsistent with the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights. Poor protection and enforcement of IPR continues to be a major concern for EU companies, as China restricts EU companies with rights to key technologies from protecting these rights when their patents are used illegally.

However, there has been increased momentum to protect IPR in China. A CBBC spokesperson says: “China has made considerable progress in protecting intellectual property rights, especially

Shenzhen, China

as a lot of IP is now created by Chinese companies themselves. China has also established a dedicated court system specialising in IP cases. This is a global first, as no other country has a similar judicial structure to protect IP. Data from Chinese courts also shows that foreign businesses benefit disproportionally from Chinese rules against counterfeit producers and infringements”.

Despite uncertainties, China’s ambitions for IPR continue to evolve. The government have launched a series of regulations regarding IP to improve the quality of patent applications. In September 2021, China released ‘The Outline of Building an Intellectual Property Rights (IPR) Powerhouse (2021-2035)’. By 2025, China aims to achieve clear results in its positioning as an IPR powerhouse and by 2035 wants its IPR to occupy a leading position in the world.

April/May 2022

CHINESE TIGER ECONOMY

MANUFACTURING COSTS China was once the world's factory.

However, the CBBC thinks regarding China as some cheap mass marketing haven is an outdated view and most export sectors hold up surprisingly well for two reasons.

“First, Chinese industries are world-leading in economies of scale and have leveraged regional clusters and distribution networks to outperform competitors. Replication of such networks is extremely difficult, especially for smaller countries. Second, China is at the leading edge of innovation in automation and the application of Industry 4.0 technologies, such as AI, IoT and blockchain. This further solidifies China’s advantage in these sectors and helps Chinese firms to maintain – or even expand – market share in these industries,” the CBBC spokesperson adds.

However, a mixture of ongoing problems and fresh threats, including increasing taxes, Covid-19, increased geopolitical tensions, supply chain risk, rising labour costs and louder calls for regulations, has meant a withdrawal from Chinese manufacturing. Increased specialisation drove labour rates up and the speed at which China was able to produce goods started to slow, as the country's population grew. At the same time, environmental and wage regulations became more prominent.

Middleton-Jones recognises this growing cost. “There is no doubt that China is moving up the value chain in products and aspirations. That may mean that buyers in both countries need to review their offer and prices to meet the needs of the future as traders adapt to climate change, trade wars, Covid closures and increased container cost.”

UK business may look elsewhere, including budding manufacturing base countries like Mexico, Brazil and India. With investment in operational efficiency, customer satisfaction and supply chain transparency, China can continue to serve as a preferred partner for global companies.

BALANCE OF PAYMENTS IN THE UK The UK’s trade deficit with China has more than tripled in the last year, importing £40.5bn more from China than it exported.

The UK has historically run a current account deficit and the pandemic has caused a significant decline in export earnings.

The Business Insights and Conditions Survey reports that 66% of exporters and 79% of importers faced challenges in late December 2021 to early January 2022, with additional paperwork, change in transportation costs and customs duties or levels being the top challenges for traders.

Beijing, China

An ONS spokesperson told Business Leader: “Since the start of the pandemic, exports of goods to China have stayed relatively flat. Meanwhile, imports from China have increased by 32% in 2021, compared to the pre-pandemic levels of 2019, becoming the UK’s number one importer in 2021. This increase was driven by rising imports of machinery & transport equipment and chemicals.”

The International Monetary Fund 2020 Annual Report on Balance of Payments Statistics revealed negative net positions of 3% of global GDP. Cross-border transactions changed dramatically in 2020 and global merchandise trade flows fell by about 8%. The current account of the Euro area recorded a surplus of €23bn in December 2021, a decrease of €1bn from the previous month.

As of Q3 2021, the UK's Balance of Payments stood at -£24.4bn. A current account deficit places the UK as a net borrower with the rest of the world. In the third quarter of 2021, China's current account registered a surplus of ¥476.2bn, and the capital and financial accounts recorded a deficit of ¥311.9bn.

MADE IN THE UK In the 20th Century, companies designed and manufactured their products domestically. However, a growing manufacturer pool and a globally connected marketplace means we are wearing clothes made in China and eating food shipped from Spain. An awareness of carbon footprints and the impact of Covid-19 means manufacturing closer to home is an increasingly attractive option.

The UK is the ninth largest manufacturing nation in the world and employs 2.7 million people. Make It British surveyed UK fashion and textile manufacturers about the impact on business owing to Covid-19. The survey found that half of all respondents reported an increase in new business enquiries received.

There is a major upheaval unfolding in Europe and Xi Jinping has some big choices to make. The UK and China differ on some critical matters and increased economic cooperation must not be at the cost of upholding the UK’s values, human rights and labour protection. Both powers must work better together to establish a reliable economic partnership and ensure they prosper in challenging times. 

Business Leader - Inspire • Inform • Connect

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AGENDA

are we set to level up enough?

At the start of February, Levelling Up Secretary Michael Gove unveiled the Levelling Up White Paper, an ambitious plan by the government to spread opportunity and prosperity around the UK. The government have described it as a complete ‘system change’ to how the government works, but the plan has already come under heavy criticism.

We took a closer look at whether the UK is set to ‘level up’ enough.

WHAT IS ON THE GOVERNMENT’S WHITE PAPER? The White Paper sets out 12 levelling up missions which aim to address geographical inequalities in several distinctive ways. Each mission is quantifiable, and the aim is for them to be achieved by 2030.

According to a statement from the government, the first mission will see pay, employment, and productivity grow everywhere, and the

disparities between the top and worstperforming areas narrow.

The government’s Research & Development (R&D) mission will also see domestic public R&D investment outside the Greater South East increase by at least 40% by 2030, with these funds leveraging a huge increase in private investment in these areas too.

Other missions will see the rest of the country’s local public transport systems become much closer to London standards; most of the country gain access to 5G broadband; and illiteracy and innumeracy in primary school leavers effectively eliminated, with the government focusing its education efforts on the mostdisadvantaged parts of the country.

The ambitious White Paper also includes plans for hundreds of thousands more people to complete high-quality skills training every year, to reduce gross disparities in healthy life expectancy, half the number of poor-quality rented homes, to rejuvenate the most run down town centres and communities across the country, and to significantly reduce serious crime in the most-blighted areas.

At first glance, it looks like the plan has some good ideas to address some of the UK’s regional inequalities, but renowned business consultant and private equity specialist, Neil Debenham, provides an overview of some of the inequalities that are in desperate need of addressing.

He comments: “Across the North of England, sectors and businesses which have been given more support in London and the South East are suffering. One area in which this is prevalent is in the property industry. This is a prime example of how the levelling up strategy is vital amongst these communities.

“Start-up cost is one thing, but the cost of bidding on and gaining public sector contracts is entirely another. These contracts are traditionally dominated by firms within London or the surrounding areas. In applying greater funding to firms in different areas of England, they can gain a competitive advantage. They may have the skills and talent required amongst their workforce but no scope to ‘level up’ themselves. It is important to ensure firms in London/SE don’t hold an exclusive oligopoly for contracts.

Another significant part of the plan includes an option for every part of England to get a ‘London-style’ devolution deal if they wish also.

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LEVELLING UP

“Furthermore, the need to increase the amount of high skilled workers is paramount. There are many people in areas with less access to resources who are capable of training to a high skill level.

‘Lack of resources’ is one of the main restrictors when considering how stifled the labour market can be in areas who cannot secure the funding.

"The UK is one of the world's most geographically-unequal major economies, a statistic that, on the surface, may shock.

An economy which is one of the largest and most-developed across the world still suffers from significant issues.”

"START-UP COST IS ONE THING, BUT THE COST OF BIDDING ON AND GAINING PUBLIC SECTOR CONTRACTS IS ENTIRELY ANOTHER." Neil Debenham

DOES THE PLAN TO LEVEL UP GO FAR ENOUGH? To put Neil’s comments into context, a study from the Institute of Fiscal Studies in 2020 found that London gets £565 more investment per person every year than the rest of the UK. The biggest disparity in investment was between Yorkshire and the Humber, which received £694 per-person a year, compared to £1,456 per-person for London.

So, does the plan go far enough to address such overwhelming disparities?

Neil is not so sure it does.

Cont. 

Business Leader - Inspire • Inform • Connect

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AGENDA He comments: “Whilst the government’s pledge for improvements to transport links, education services and broadband networks is a welcome investment and consideration for these areas, it is not enough.

“For example, improving transport links could, in fact, drive people in cities such as Manchester to be able to commute to London with greater ease and speed. What may look like a ‘regional improvement’ may, in fact, decrease economic growth and business development in areas outside of London/SE. Monetary injection is important, but overall support to the community is as, if not more, important.

Revamping these areas in a more holistic sense, such as building a community for SMEs to thrive as well as keeping incentives to remain where they are, is just as vital.”

Luke Davis, CEO of IW Capital, agrees that more needs to be done.

“I think the levelling up strategy is a step in the right direction to address the regional inequalities across the UK, but more is ultimately needed to grow businesses throughout all regions of the UK. There are impressive and exciting small businesses in all areas of the UK, but they still may not get all the opportunities available to small businesses in London, so more is ultimately needed.

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“I think that the strategy needs better definition for how it is going to meet the objectives it has set. At the moment, it seems to be ideas, but no real information and specific details for how they are going to achieve those ideas. Increasing regional business throughout the UK is vital but the government have not defined how they’re going to achieve this.”

However, the UK Shared Prosperity Fund is one way that the government plans to meet its levelling up agenda.

THE UK SHARED PROSPERITY FUND Described as a ‘central pillar’ of the government’s levelling up agenda, the fund will provide £2.6bn of new funding for local investment by March 2025, with all areas of the UK receiving an allocation from it via a funding formula, rather than a competition. This could help get funding to the places where it’s needed most, but Caroline Norbury MBE, Chief Executive at Creative UK, says it won’t fully mitigate the impact of Brexit.

She comments: “At Creative UK, we strongly believe that whilst talent is everywhere, opportunity is not, so it is welcome to see the UK Government taking action to address this in its Levelling Up White Paper.

“However, the fact that the UK Shared Prosperity Fund won’t fully replace the money received from the European Union is a major concern. European Structural and Investment Funds contributed more than £400m to projects supporting the Creative Industries in England, Wales and Scotland, providing vital cash injections that improved living standards in areas with the greatest need. Significant investment will be necessary to realise the Government’s ambitions and ensure no-one is left behind.”

Since exiting the single market in January 2021, the Centre for European Reform estimated that by October 2021, UK goods trade was £12.6bn lower than it would have been if the UK had remained in the EU’s single market and customs union.

And whilst there’s no guarantee that this money would have gone directly to addressing the UK’s geographical inequalities, the amount lost to the treasury in nine months is nearly five

April/May 2022

LEVELLING UP times higher than what the UK Shared Prosperity Fund is pledging to invest over the next three years.

WILL FUNDS EVEN GO WHERE THEY’RE NEEDED? As mentioned earlier by Luke Davis, the government’s levelling up agenda is currently missing much definition for how it plans to fulfil its aims. Once this happens, we will have a clearer idea on whether the plan will achieve its targets and how much funding will be provided.

Based on the government’s current track record, however, we should not rule out the possibility of its proposed aims going unmet.

A Guardian investigation published earlier this year found that under the Levelling Up Fund, one of the government’s current schemes for addressing inequality amongst the UK’s cities and regions, Central Bedfordshire, an area partly represented by the Culture Secretary, Nadine Dorries, has received £26.7m – £91 a head – despite being among the top fifth of local authority areas in affluence.

In contrast, eight local authorities that are among the poorest in England have received less than £10 a head from the four funds announced to date.

These include Swale in Kent, Tendring in Essex, Barking and Dagenham, Southampton, and Knowsley in Merseyside.

“I THINK THE LEVELLING UP STRATEGY IS A STEP IN THE RIGHT DIRECTION TO ADDRESS THE REGIONAL INEQUALITIES ACROSS THE UK, BUT MORE IS ULTIMATELY NEEDED TO GROW BUSINESSES THROUGHOUT ALL REGIONS OF THE UK." Luke Davis

So, what needs to happen to address the inequalities seen throughout the UK? Neil Debenham offers some suggestions.

He comments: “Direct funding, such as loans, offer a cash injection which can help SMEs kickstart a spurt of growth.

However, it is prudent for support beyond purely monetary to be supplied. Monitoring of different schemes, beyond the minute they are implemented, is of high importance. Throwing money at a business is a mere fraction of what makes it tick.

Ensuring the infrastructure, personnel and competitive advantage are maintained can help to address regional inequality.”

However, Caroline Norbury MBE says the plan cannot overlook the importance of the creative industries.

“The creative industries play a huge role in unleashing opportunity, prosperity and pride in places throughout the UK, and have the potential to achieve much more. Creativity is an essential catalyst for regenerating our villages, towns and cities, drawing people and investment into local places and binding diverse communities together.

"With the right investment, the creative sector is set to produce 300,000 new jobs and generate an extra £28 billion for the UK economy by 2025, throughout the regions and nations.

“Guaranteeing access to creative education and ensuring security for freelancers must be in place to help realise this ambition. This will sustain and grow a diverse talent pipeline to not only fuel our world-leading creative industries, but to boost entrepreneurialism and future-proof local industries and jobs with the high-level skills needed to support UK growth and innovation.

“The significant impact that public investment into the creative industries delivers for people and places must be reflected in the Government’s plans.

Investment in public service media fuels growth in areas across the UK, as will continued spending on creative R&D: The Creative Industries Clusters Programme is set to have leveraged £201m in investment into key parts of the country and we urge the Department for Business Energy and Industrial Strategy to back its successor.

“By empowering people and communities in all corners of the UK to unlock their creative potential, we can develop the skills and abilities essential to the UK’s economic and social recovery.” 

Illustrations courtesy of Mel Shephard

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FEATURE

SCALE-UP OR SCALE-OUT: are uk businesses legacy builders or sellers?

The life of an entrepreneur involves many ups and downs throughout the journey, but for many, the end goal is either to scale and create a legacy, or sell up once a suitable offer is presented. But what is the better option? And how does the UK compare to the rest of the world?

Business Leader investigates.

UK businesses and entrepreneurs have often been labelled as preferring to ‘scaleout’ and exit quickly, compared to their US, German, and Japanese equivalents, where they tend to build for the longer-term and focus building an empire and establishing a legacy.

Whether a company remains private and aims to grow, or they join the trend of firms that exit – there are many factors to consider for business owners.

WHY DO UK ENTREPRENEURS EXIT SO SOON? Every major market has trends within its scaling community, and the UK has become known around the world as a hotbed of innovation – making it an appealing opportunity for domestic and global investors.

However, there are several key reasons why UK entrepreneurs aim to scale-out rather than create global, generational companies.

Matt Eves, Head of M&A in the South at EY, comments: “Entrepreneurs’ exits are often led by the need to access finance to grow. To raise the necessary growth capital to take the business to the next step, entrepreneurs need to engage with alternative finance providers such as private equity (PE).

“PE works by investing for a set period of time, so providers will always have one eye on exiting the business and will sell to realise a return on their initial investment at an appropriate and planned time. An exit will be dependent on the growth of the business.

“The majority of business growth money in the UK comes from some form of PE provision, and unlike some of the financial systems in other countries, such as Germany, there are fewer options to engage family finance, or other types of finance. Businesses do have the option to raise finance through debt, but as a consequence, this may hamper business growth activity. The UK’s entrepreneurial culture is heavily linked to equity investment. Another common reason for entrepreneurs wanting to sell their business is a failure to properly plan for succession.”

Alpesh Patel OBE, Founder of Praefinium Partners, agrees with this assessment of the importance of PE, in relation to UK entrepreneurs’ growth and exit plans.

He comments: “UK entrepreneurs usually look to exit quickly because investors like me in private equity want an exit ourselves, and want to sell the company to a bigger one who have their own management.

“Other reasons include serial entrepreneurs who want to sell their shares and cash out for the next big thing.

“Alternatively, some are lifestyle entrepreneurs who love their business and never want to exit. However, most in the UK get bored, I think, and want the next thing, or know they are good at scaling and better jump before the more difficult phase kicks in when the hype dies down. There is also another reason for exit – a bucket load of money!”

Another reason why UK entrepreneurs wish to exit is due to international growth plans.

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April/May 2022

SCALE-UP OR SCALE-OUT Henry Whorwood, Head of Research and Consultancy at Beauhurst, comments: “It's often said that UK businesses exit too early, but there are some natural reasons for this, including the size of the UK as a market. Having expanded nationally, an exit to an international acquirer can be a natural way to expand internationally.”

companies based in the regions. The availability of this funding and success stories created by regional entrepreneurs means more business owners are going for growth and creating companies of scale.”

headquartered business to enhance its UK presence.

"THERE HAS BEEN REMARKABLE PROGRESS OVER THE PAST DECADE IN TERMS OF THE UK FUNDING OPTIONS AVAILABLE AND THE MINDSET AND AMBITION OF THE ENTREPRENEURS WE MEET AND INVEST IN. "

Innovation and the UK’s world-leading tech sector has also kicked international acquisitions into a new level. Stephen Kelly, Chair of Tech Nation, explains: “This is a golden decade for UK tech, coming off the back of a record-breaking year for scale-ups, with over 120 unicorns and almost 40 UK IPOs last year. There’s never been a greater time for scale-ups to grow and create value for their stakeholders and investors.”

However, sometimes there isn’t a ‘theme’ around the exit of UK businesses. Barry Jackson, Head of BGF in Yorkshire and the North East, comments: “It’s often said that ‘companies aren't sold, they're bought’, which is a helpful perspective for an entrepreneur or investor when considering an exit strategy and timeline.

“It makes sense for an entrepreneur to have a plan and a desired timeline in place, but the most successful exits are likely to have been those which have been considered over the long-term. This allows solid foundations to be put in place, with the business having reached an optimum stage of maturity and had a strong management team appointed, so it can continue to succeed without its founder.”

GLOBAL COMPARISON One of the primary reasons why UK business owners don’t replicate the legacy of companies in other leading nations, is the entrepreneurial environment and levels of support that are available.

Jackson explains: “Historically, the UK funding landscape hasn’t always offered the options for entrepreneurs to achieve scale while keeping control of their business. BGF was launched after the financial crisis to invest in businesses with long-term growth potential by taking minority, non-controlling stakes.

“There has been remarkable progress over the past decade in terms of the UK funding options available and the mindset and ambition of the entrepreneurs we meet and invest in. The US and China lead the way in creating the most unicorn companies and the scale-up ecosystem around these hubs is more well-developed as a result.

“We’ve also seen a positive move towards levelling-up of the UK distribution of capital and, in turn, the number of growth

Barry Jackson

WHY ARE UK BUSINESSES APPEALING TO ACQUIRE? Unlike many of the other leading nations around the world, a trend within scaling businesses in the UK has been around selling to larger businesses from abroad.

But why is this happening? And why is this increasing in value and regularity?

Patel comments: “UK businesses are appealing to international investors due to their track record of getting good ROI. This is because the UK has good ease of doing business, a large economy and somewhere with a history of taking companies global. Investors also know that their money is safe due to strong regulations and laws.”

Jackson expands on this: “The UK benefits from some exceptional homegrown, highpotential businesses, which are extremely attractive to investors and buyers. First and foremost, investors will look for a good track record, strong leadership, and growth potential.

“It will often come down to a buyer or investor’s particular growth strategy as to what makes a company appealing. If I look to our own portfolio and our recent exits, Coppergreen Leisure Resorts was acquired by a business looking to expand its UK footprint of holiday parks. Coppergreen Leisure Resorts was particularly attractive because of its prime locations, leadership in sustainability and growth track record.

Buyers also look to UK businesses as providing access to the UK market. J&B Recycling was bought by a Spanish-

“Buyers are also drawn to innovation, companies leading their markets and strategic acquisitions which will enhance their own offering.”

However, the reasons countries like the US, France and South Korea still have many of their own companies, but the UK doesn’t, has been years in the making.

Alison Owers, Global CEO at Orient Capital, explains: "Privatisation in the UK has been a large driver of the current global ownership landscape, as many of our big public companies have been taken private over the last 40 years. In Europe and Asia, there is more state ownership, and a slower or near nonexistent privatisation push. We must exercise caution when it comes to value judgements here – one strategy is not necessarily better or worse than another, and a thriving global economy should benefit everyone."

Other countries may be taking note, as France begins to loosen its corporate governance laws. However, anxieties remain.

While foreign investors are not prohibited from acquiring shares in a Korean company, there are limits on foreign ownership in Korean companies engaging in certain industries considered to be vital to the national interest, such as defence, broadcasting, telecommunications, publishing, and public utilities.

Andersson continues: “The active M&A market in the UK indicates the positive view that investors and corporates have of the country. Following on from a bleak outlook in the wake of Brexit and the pandemic, foreign buyers are displaying a vote of confidence with not only their feet, but also their wallets.

Cont. 

Business Leader - Inspire • Inform • Connect

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FEATURE

"An influx of capital may well give struggling UK businesses the boost they need to continue to expand and grow.”

ARE ATTITUDES CHANGING? With the entrenched model of scaling and selling, taking a different view to growing a business is starting to happen in the UK. Kelly comments: “There are a range of factors causing UK entrepreneurs to exit prematurely, but one of the key reasons is the UK’s need for greater cultural ambition. The ambition for UK scaleups must be to win accolades on the global stage, rather than exiting quickly and prematurely.

"In the UK, we need to reset our ambition levels to nurture and support global market leaders, and this vision must come from the top of the company (the Board, founders and CEOs), who should aspire to win on the worldwide stage.

“I have seen the power of this kind of fearlessly ambitious leadership first-hand during my time in Silicon Valley, where I was in the founding team of a tech unicorn that became a global market leader. As a nation, we have to be more ambitious about expanding overseas, growing faster, and achieving market leadership globally. The key phrase to remember must always be ‘grow fast or die slowly’.

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SCALE-UP OR SCALE-OUT

“We are now reaching that stage in the UK, as we have a rich talent pool of CEOs, founders and Board members who have scaled successful tech companies many times before and won on the global stage.

All of the ingredients are there now for the UK to power on, to acquire companies overseas, and to choose growth and expansion over an early exit.”

DOES MORE NEED TO BE DONE TO SUPPORT SCALING BUSINESSES? Changing the traditions of scaling businesses looking to scale-out is slowly starting to happen, however, one of the main challenges opposing this is the level of support available to entrepreneurs.

Eves explains: “A reasonable, fair, and supportive taxation system is critical to encouraging more entrepreneurs to build their businesses, and so is access to funding with longer term horizons rather than the typical private equity fund cycle.

“Ideally, an increase in family offices and buy and hold opportunities here in the UK has the potential to be more beneficial to entrepreneurs seeking growth finance, but for the moment, the majority of entrepreneurs will continue to see PE as the best option to grow their business.

“PE usually allows the entrepreneur to retain an influential part in the business and provides access to a support network of trusted advisers and experienced sector specialists. Any exit, and subsequent investment by a different financial institution, should be managed closely to ensure that the entrepreneur maintains some autonomy as the business grows.”

"THERE ARE SOME GREAT AWARDS OUT THERE AND SOME NEW ONES COMING OUT WHERE ENTREPRENEURS AND ENTREPRENEURSHIP IS REALLY CELEBRATED." Juliet Barratt

Juliet Barratt is the Co-founder and former Chief Marketing Officer of Grenade, a fast-growing sports performance and active nutrition brand.

Grenade was sold to Mondelez for £200m last year.

She comments on what support is needed to encourage entrepreneurs to continue scaling: “Mentoring, support, and transparency are key. For example, with Brexit, nobody really knew what was happening.

“Also, a lot of people get frowned upon for doing well, which doesn't seem to be much of a celebration for people who have worked hard and really achieved something. It almost seems to be a bit of a jealousy thing in the UK, so it would be nice to see people being more supported.

There are some great awards out there and some new ones coming out where entrepreneurs and entrepreneurship is really celebrated. This is so important because it does take balls to start your own business as opposed to being PAYE.” Another exponentially-expanding UK business is innovative flower retailer Bloom & Wild.

Aron Gelbard is the Co-founder and CEO, and he is a part of the new wave of UK companies looking to grow domestically and on the global stage. He concludes: “I am definitely not looking to sell our company. I feel extremely privileged to have this job and I love what I do. I love the fact that we are able to delight customers at scale, and I think there is so much opportunity to continue to scale our business in Europe, especially having made a variety of acquisitions. I am really motivated to continue to build this company for many years. We expect to continue to grow very rapidly going forward as there are loads of opportunities out there.” 

April/May 2022

CORPORATE FINANCE EXPERTS

BUYING A BUSINESS

Accelerate Growth Buying a business is the fastest way to accelerate growth or the fastest route to becoming a business owner. But how do you go about buying a largely intangible asset with a multi-million pound price tag?

Business buyers recognise that acquisitions can be transformational for both them and their business. They can achieve scale, give access to new markets, equip the buyer with new capabilities, or allow a management team to own the business they work in.

"WHEN YOU BUY A BUSINESS YOU ARE COMMONLY PAYING FORWARD MANY YEARS' PROFITS, SO YOU NEED TO ENSURE THE BUSINESS THAT YOU ARE BUYING WILL PAY THIS INVESTMENT BACK, AND MORE." Jim Shaw, CEO & Founder at Shaw & Co

But buying a business also carries significant risks. A poorly planned and executed acquisition can be as potentially damaging as it can be transformational. This is why too many business owners and managers don’t embrace the opportunity.

ENABLING A MANAGEMENT BUYOUT FROM VODAFONE

We can help you buy a business the right way, access accelerated growth and take that next step.

We successfully enabled Vochercloud’s original owners to buy back the business they originally sold to Vodafone in 2012, returning it to independent ownership.

BUYING A BUSINESS HOW TO DO IT RIGHT Buying a business is less daunting if you approach it in the right way, and with the right advisors by your side. We work with ambitious SMEs, managers and small-cap PLCs that are looking to acquire, adding confidence and value by: • • • • • • • •

Identifying and prioritising your acquisition criteria; Finding the right targets to help build your business; Making the right approach with potential sellers; Ensuring you pay the right price for the target; Arranging funding to acquire the target; Securing and negotiating the deal; Managing the acquisition process and mitigating risks; Developing a post-acquisition integration plan that protects value.

If you are starting to think about buying another business, have identified suitable targets, or you have been approached by a vendor, please contact us to discuss your next steps.

Greg Le Tocq, Co-founder at Vouchercloud

ABOUT US Shaw & Co is an award-winning, independent corporate finance specialist that helps SME owners across the UK to buy, sell, or fund the growth of a business. We can assist with acquisitions, management buy-outs, management buy-ins and mergers.

VISIT: SHAWCORPORATEFINANCE.COM BOOK A MEETING: 0330 127 0100

Our entire approach is focused on helping you achieve your greatest ambitions. We succeed only when you do – whether raising finance, buying a business or selling one you have grown.

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FOLLOW US

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INDEPENDENT JUDGING PANEL INCLUDES:

Susan Hooper

Matt Gubba

Mark Nutter

Theo Paphitis

John Stapleton

Caprice Bourret

Manjula Lee

Richard Harpin

Piers Linney

Donna O'Toole

Jackie Fast

Jonathan Lister Parsons

Charlie Robinson

Alpesh Patel OBE

Touker Suleyman

Josh Robson

Irene Graham OBE

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Juliet Barratt

Maggie Rodriguez-Piza

Steve Malkin

Guy Rigby

Douglas Hansen-Luke

Paul Brown

Dr Saima Rana

April/May 2022

THE UK’S LEADING AWARDS CELEBRATING SCALE-UP BUSINESSES

OPEN FOR ENTRY The Scale-Up Awards are free to enter, and you may enter multiple categories. Entry is open to businesses, entrepreneurs and organisations that are based in the UK and who can demonstrate ‘best in class’ business performance.

ESG and Social Impact Award

Business Leader of the Year

Customer Champion Award

Diversity Champion

E-Commerce Business Award

Employer of the Year

Family Business of the Year

International Business of the Year

Manufacturing Excellence Award

Overall Scale-Up Business Award

Scale-Up Disruptor Award

Scale-Up Entrepreneur of the Year

Sustainability Scale-Up Business of the Year

Technology Scale-Up of the Year

TO ENTER, VISIT SCALEUP-AWARDS.CO.UK

Business Leader - Inspire • Inform • Connect

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FAST TRACK

FAST TRACK

IN FULL BLOOM:

HOW DID THIS D2C FLOWER SUBSCRIPTION SERVICE BECOME A HOUSEHOLD NAME? In each edition of Business Leader Magazine, we profile a UK business that is experiencing exponential growth in a feature called Fast Track. This time, we spoke to London-based flower delivery service, Bloom & Wild.

Founded in 2013 by Aron Gelbard and Ben Stanway, the last few years have seen the business significantly increase its yearon-year turnover. Currently, the company is on track to more than triple revenues over the last three years.

This rapid expansion has made Bloom & Wild the European leader in online flower delivery. Last year, the company completed two major international acquisitions as part of its growth strategy and doubled the number of countries it is operating in – expanding from four at the start of 2020 to eight at the end of 2021.

INSPIRATION A culmination of family influence and the amalgamation of skills acquired throughout his career led Gelbard (now Bloom & Wild’s CEO) to start the company.

He comments: “I set up the company nine years ago, with a view to trying to make flowers the joy that I think they should be. I come from a family of entrepreneurs.

My dad is an entrepreneur and has been for 50 years. Three of my four grandparents set up their own businesses as well. So, being an entrepreneur was always something that I hoped to do.

“I worked for the first eight years of my career as a management consultant with consumer products, retail, and tech companies. Through this, I became really interested in e-commerce and direct-to-consumer (D2C) business models. It was from this point that I started to think about setting up my own business in that area, but I was really

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BLOOM & WILD

Aron Gelbard Co-Founder, Bloom & Wild

motivated to do something which I thought was going to create brilliant consumer experiences and generate positive feedback on an emotional level. That is what really drew me to the flower industry.

“It was through this combination of feedback and personal desire, mixed with the fact that the industry satisfaction levels were low - nobody was innovating within the flower industry. It is such an emotive product, which is what made me feel that this was a great place to get started on my entrepreneurial journey.”

"NOBODY WAS INNOVATING WITHIN THE FLOWER INDUSTRY. IT IS SUCH AN EMOTIVE PRODUCT, WHICH IS WHAT MADE ME FEEL THAT THIS WAS A GREAT PLACE TO GET STARTED ON MY ENTREPRENEURIAL JOURNEY." Aron Gelbard

DISRUPTIVE FORCE It was this mix of entrepreneurial intrigue and an understanding of the revolution that was impacting the retail sector, the team at Bloom & Wild saw an opportunity to kickstart a rapid change within the D2C market.

Gelbard explains: “Nobody had built technology that was bespoke to the flower industry. I'd seen people in other industries building out technology solutions that were solving customer problems. A couple of examples of this would be Graze, The Snack Box Company and Gousto. It felt like lots of other industries were using technology to build better customer experiences, but that hadn't made it to the flower industry.

Cont. 

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FAST TRACK “The industry also suffered from challenges in the supply chain.

Flowers will regularly pass through six to seven middlemen between being grown on a farm somewhere around the world to making it to the kitchen table of the recipient. Each of those middlemen will add cost, use up valuable vase life, and also be responsible for some of the waste in our supply chain, which can regularly be as high as 40%.

With everything in place to continue its growth trajectory, March 2020 came along and changed the business landscape for every company in the UK. However, the series of lockdowns and restrictions put in place by the Government actually led to further success for Bloom & Wild. And due to their pursuit of customer satisfaction, this has given them the platform to continue expanding in the years ahead.

“The result of all this is that flowers can be expensive, they cannot last very long, and they can have a poor environmental impact. So, our solution here was to try and build relationships directly with growers and avoid going through lots of middlemen, to both bring down the cost, reduce waste and, therefore, be able to be attractively-priced for consumers. The aim was that they'd then be repeat customers, who would drive our growth.”

Gelbard continues: “We have seen particularly strong demand during periods of lockdown, where people are not able to see their loved ones in person, and flowers end up being a substitute for a hug. As we have maintained our strong customer satisfaction scores during those periods, we have seen that the customers who tried us for the first-time during lockdown periods have ended up being repeat customers and continue to shop with us today. So, we have not just seen the short-term growth during the pandemic, we have seen sustained growth that has lasted beyond the lockdowns. And as a result, Bloom & Wild has more than doubled in size over the last two years.”

KEYS TO GROWTH Aside from disrupting the status quo within the flower industry, there have been many key factors that have led to Bloom & Wild being able to successfully scale.

Gelbard comments: “In order to sustain our levels of growth, we've invested heavily in our tech and data team, which is now almost 100 strong across our group – we are on a very different scale to anybody else in the industry. As a result of that, we've had the capacity to run hundreds of A/B tests to figure out how to make the consumer experience as strong as possible. We are not just trying to increase conversion rate, but we're also trying to make sure that we're giving customers a better experience with anything that we add or change to the business. At a consumer-facing level, we have built an app that allows you to order flowers in as little as 10 seconds. We've built automated occasion reminders, so that people can save occasions and recipients, be easily reminded of them and be able to checkout in a couple of taps of your screen.”

GROWTH THROUGH ACQUISITIONS Alongside Bloom & Wild’s success in the domestic market, and its ability to scale through the utilisation of new tech and implementing a new style of supply chain – the company has also achieved growth through acquisitions and funding rounds.

In total, the retailer has raised more than £100m over multiple rounds, involving angel investors, institutional investors and global venture capital firms who have a history in the D2C space.

This includes MMC, Burda Principal Investments, Piper, General Catalyst and Index Ventures.

Gelbard comments: “I believe having these really strong investors has helped us accelerate our growth, and we have been able to use this much larger amount of money to be in a position to make international acquisitions. The funding has enabled us to scale at pace.”

The company had already started operating in Germany a few years ago and had seen similar success compared to the UK, due to the same lack of innovation within the D2C market.

Following this, the company made its first acquisitions.

Gelbard explains: “About 18 months ago, as we were thinking about further international expansion, we reflected that, in addition to doing this organically, it may make sense to expand internationally through acquisition. We did this for a couple of reasons. Firstly, flowers are a very emotive product that people often want to buy from local brands that they feel a degree of trust and affinity for.

“Secondly, we have a goal to build the world's leading and most-loved flower

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April/May 2022

BLOOM & WILD OVERCOMING CHALLENGES Despite its success at home and abroad, Gelbard has had to face a series of difficulties on the company’s journey over the last nine years.

He comments: “Raising funding with the right investors is incredibly challenging. We have spent a lot of time making sure we are doing the right thing for our business. This is especially true when you come to raise the larger sums, as the investors become very exacting with the results of the money, and you then need to deliver. They want answers to a lot of questions and really want to understand both your traction and your vision for the future – and how exactly you are to achieve the levels of growth they expect.”

"WE HAVE NOT JUST SEEN THE SHORT-TERM GROWTH DURING THE PANDEMIC, WE HAVE SEEN SUSTAINED GROWTH THAT HAS LASTED BEYOND THE LOCKDOWNS. AND AS A RESULT, BLOOM & WILD HAS MORE THAN DOUBLED IN SIZE OVER THE LAST TWO YEARS."

company, and we thought that we'll be able to achieve that goal more rapidly if we were able to bring other companies into our group, where we had a shared philosophy around the products, a more efficient supply chain, better use of technology and really delighting customers with what we do.”

Last year, Bloom & Wild acquired Netherlands-based Bloomon and French competitor Bergamotte.

He continues: “In the case of Bloomon, they were a subscriptionbased platform and we have been looking to try and grow flower subscriptions. They have also invested heavily in their supply chain, they have relationships with around 200 growers around the world – and they have the technology to manage that. They have a state-of-the-art production facility outside Amsterdam, where they're based, which is a European flower hub.

“Regarding Bergamotte, they've got a brilliant brand within the French market, and they also are experts in plants, which is close to half their business. This is an area that we're trying to grow at Bloom & Wild. They've also done a lot of work with physical retail, in addition to online, which is another area that we're interested in exploring. By adding growth through acquisition to organic growth, we've been able to bring new capabilities into our group.”

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All across the retail sector, one of the universal challenges facing almost every business has related to the ongoing supply chain crisis. Despite the issue, the company has adapted to the situation, meaning it has been able to thrive under pressure and help the flower industry survive the pandemic.

Gelbard continues: “During the first lockdown, when we saw increased demand very rapidly, we were able to work with our supply partners to ramp up the number of flowers we could source.

This was also a favour to many of our growth partners, because a lot of supermarkets were selling fewer flowers and thousands had already gone to waste. Therefore, we were able to take on some of that excess volume. We have been able to continue to make sure that we have a reliable supply from multiple sources, despite all of the disruption.”

FUTURE PLANS By weathering the storm of COVID-19, expanding internationally, and having a reliable supply chain, Bloom & Wild has positioned itself for a bright future.

Last year, the company launched a subscription service, which is set to expand in the range of products it will offer and to new customers – utilising the two acquired businesses.

The other goal for Gelbard is for Bloom & Wild to ‘experiment’ with physical retail concepts, to work alongside its digital offering. This follows the company’s recent launch in over 140 Sainsbury’s stores.

He concludes: “There are so many opportunities to continue to scale our business in the UK and Europe, especially having made these acquisitions. I am really motivated to continue to build this company for many years.” 

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FEATURE

‘there are more men called john that have raised investment than black women in the uk’ Yes, the tech sector is seeing record levels of funding, but challenges remain when it comes to finding talent, tackling climate change and boosting inclusion and diversity.

To find out more and to review how the tech sector is performing, Business Leader spoke to five leaders in the space.

the panel GLYN BLAIZE Group COO, Amdaris OLI COOK CEO and Co-Founder, Ekko NATHAN GUEST Partner, VWV EMMA THOMPSON Chief Marketing Officer, Tech Nation

Has the UK tech sector ever been in a better place? To answer that question will depend on what metric you place value on.

If it is how much funding is being pumped into technology companies, then the answer could be yes. But if the yardstick is making sure there are more black female tech business owners, then the answer could be no.

To begin, we’ll look at the levels of investment finding a home in the tech sector before looking at the wider issues that are impacting it.

In summing up the tech sector currently and the level of funding available, he says: "A word I would use to summarise the last year in the tech sector would be busy.

There is a huge amount of investment available globally and we have seen this deployed nationally and regionally in the UK. There is still lots of money from venture capital firms that is looking for a good home."

Nathan Guest is an influential figure in the tech space, having advised many tech firms in the UK through his role as a Partner at VWV.

JOSHUA ROWE Head of Mergers and Acquisitions, Clearcourse LLP

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TECH TRENDS

Award-Winning Legal Advisers to Regional Businesses

When it comes to the sectors that are active, he says: "Unsurprisingly, due to the pandemic we have seen a surge in health tech and life science businesses. I’m also seeing a huge surge in M&A activity, and this is being fuelled in part by private equity and Buy and Build strategies.

"Just a few weeks into 2022, we have already seen three new technology M&A instructions and two of the exits were to overseas buyers, which is an increasing trend we’re seeing too."

THAT TECH NATION REPORT In 2021, Tech Nation published a report that dissected the state of the UK technology sector.

Described as the ‘State of The Nation’ report, it found that the sector had seen record levels of funding.

Emma Thompson is Tech Nation’s Chief Marketing Officer and comments: "When it comes to VC investment, the UK is only behind China and the USA, and we received £29bn of investment in 2021. This was up £9bn from 2020. Much of this investment came from overseas: 60% in total.

ARE WE SEEING MORE TECH COMPANIES LISTING? Emma says that the conversation around tech companies is changing.

She explains: "The conversation has shifted from being about are there enough tech start-ups and scale-ups, to are enough UK tech firms listing? This is a good shift."

The data shows that more tech firms are listing. Of the 126 companies that listed in 2021, 37 were technology ones, with Wise performing the largest float ever seen.

We’re also seeing companies coming from Denmark, the USA and Canada to list in London, says Emma.

There are challenges though, with diversity and inclusion being one area where more needs to be done (more on that later).

When feeding into the report, Emma says that the enduring challenges that technology businesses looking to scale face are access to funding, access to talent and increasingly accessing international markets.

"JUST A FEW WEEKS INTO 2022, WE HAVE ALREADY SEEN THREE NEW TECHNOLOGY M&A INSTRUCTIONS AND TWO OF THE EXITS WERE TO OVERSEAS BUYERS, WHICH IS AN INCREASING TREND WE’RE SEEING TOO."

"In the UK, £9bn went into start-ups and scale-ups that were based outside of the South East, which is good for the country and the levelling up agenda. More good news is that in 2021, the UK crowned its 100th unicorn – which was Tractable.

We’re now on 117.

"The report also showed that that tech sector contributes 7% to the UK’s GVA and there are three million people employed in the UK tech sector, with 13% of the job vacancies in the UK currently in the tech sector."

Nathan Guest

SO WHERE IS THE MONEY GOING? Emma says that FinTech remains the crown jewel when it comes to UK technology verticals, with it receiving the most funding and this does not look set to change soon.

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vwv.co.uk

HealthTech and enterprise software are two sectors that are performing well too.

And behind FinTech, when it comes to funding, is DeepTech; with the vertical taking the second-highest levels of investment.

RISE IN THE NUMBER OF MERGERS AND ACQUISITIONS Touched on earlier by Nathan, M&A activity is at record levels in the UK tech sector, but what is driving the rise?

Joshua Rowe, who is Head of M&A at Clearcourse LLP, comments: "We’re buying lots of companies and we are seeing some common themes as to why small- and medium-sized technology businesses are looking to exit. Firstly, access to talent is tough, so becoming part of a bigger organisation can give you access to this and allow you to scale quicker.

"Secondly, we keep hearing there is lots of capital available and there is. For smaller businesses though, there isn’t always the amount of VC and PE capital that we’re led to believe. If you add in the stress of the pandemic and other external factors, you can see why companies are looking at other avenues to exit or raise capital."

SCALING A TECH BUSINESS Funding, people, and external factors out of an entrepreneur’s control are all challenges being faced. To get the perspective of a business leader dealing with these challenges, we spoke to Glynn Blaize, who is Chief Operating Officer at fast-growing tech firm Amdaris.

He says: "My internal worry during the onset of the pandemic was that the market was going to contract. But the opposite happened and the clients we’re dealing with in HealthTech and FinTech have grown considerably.

Cont. 

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FEATURE

Award-Winning Legal Advisers to Regional Businesses "What we’ve also seen is huge growth in UI and UX, which has become a separate revenue stream over the last several months.

Regarding the challenges that keep me awake at night, the number one is the battle for talent, as there is not just a national shortage of tech talent; it is global."

Oli Cook is the CEO and Co-Founder of Ekko – an app and debit card that helps its customer to tackle climate change – and he agrees that the focus on UX and UI is growing.

He explains: "When it comes to UX and UI, you can no longer get away with a shoddy minimum viable product (MVP). The expectation is so high, especially when you look after people’s money, that your UX and UI needs to be first-class from day one.

"I’m also seeing that with sustainability, the mood music is changing. Over the last twelve months, people are taking it much more seriously, both in the start-up and scale-up space. Although a challenge can be that when you have been running a business for twenty years, you quite rightly make big pledges, but you may not know how to deliver on them, or you may not feel that it will make a material impact.

Businesses still aren’t taking enough action, but at least people are starting to think about the issue. Understanding your carbon footprint and how you mitigate it is a complex thing to do."

vwv.co.uk

Oli also says that he expects to see a rise in greenminded companies entering the technology space.

He says: "We have seen a shift in funding coming to companies like ours and the biggest change will be in the next five years, with technology used in different ways to help businesses reduce their carbon footprint. This trend isn’t going away.

This is the biggest thing in society and more and more money will flow to it. This is only the beginning."

Nathan agrees: "Tech for Good investment in the UK and impact investment has increased 160% since 2018 in the UK, compared to 15% in the US. I agree that more money will be going into these spaces and people will be creating solutions we haven’t even thought of yet. This will be driven by people, consumers and the government. ESG will become very important."

Illustrations courtesy of Mel Shephard

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TECH TRENDS

the race to $5tn: which of the biggest companies will hit this milestone and when?

With Apple becoming the first US company to reach $3tn market cap at the start of this year, you may be wondering who’s next, perhaps Tesla, Microsoft, or Amazon?

DIVERSITY AND INCLUSION It is, of course, good to see such growth within the technology sector, but one area that has not grown fast enough is diversity and inclusion.

Emma explains: "Research shows that 88% of black founders self-funded their business and there are more men called John that have raised investment than black women in the UK. 68% of women and 61% of men also feel the eco-system has failed to provide opportunities for underrepresented people. Even if it is moving, it isn’t moving fast enough.

Those statistics do not make for comfortable reading."

Joshua Rowe is equally scathing: "We have 35 companies as part of our Buy and Build strategy and only one of those was run by a female. There is an issue here and it is not helping when half of the population are not participating, and the industry is dominated by male founders."

Nathan adds: "The question remains – how do we change this? It is going to take a generation. It is about getting kids into STEM subjects and we’re going to need to see more people coming out of school having focused on life sciences and technology because they’ll have to." 

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Using historical market capitalisation data, new research from XTB.com has forecasted which of 2021’s biggest companies are most likely to hit this milestone and when.

It may come as no surprise that Apple is predicted to be the first company to hit the $5tn market cap goal and is on track to do so before this current decade ends, in 2028. Next are both Microsoft and Amazon, who look to reach this in 2035.

After that, there is a longer period to wait until the next few are expected to achieve this feat, with both Tesla and NVIDIA forecasted to hit the milestone in 2066 and TSMC in 2078.

According to the data, the final two companies are Tencent Holdings in 2083 and UnitedHealth Group with just a decade to spare in 2090.

Taking this further, of these giant companies, there are a few which may hit $10tn in market cap before the century is over.

The forecasted data predicts that Apple will do so first in 2043, followed by Amazon around 2055 and then Microsoft in 2057.

Perhaps you’re wondering about some of the other largest companies in 2021 and where they might stand before the end of the century?

Kweichow Moutai just misses out on being part of the $5tn club, with an estimated market capitalisation of $4.7tn by 2100.

Other household names, including Berkshire Hathaway and Visa, are even further behind at $3.9tn.

What may come as a surprise is the likes of Walmart and Procter & Gamble are not even halfway there with $2tn, and Walt Disney only slightly ahead at $2.1tn.

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ADVERTORIAL

SIG PLC IMPROVES CUSTOMER EXPERIENCE AND FLEET PRODUCTIVITY WITH DESCARTES’ LAST MILE SOLUTION SUITE Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, announces that SIG plc, a leading European supplier of specialist building materials, is using its solution suite as part of its broader strategy to become a true market leader in the UK. SIG UK has deployed Descartes’ comprehensive last mile delivery solution suite including route planning and execution solution, mobile electronic proof-of-delivery (ePOD) and telematics with remote download of tachograph data. The solution has enabled SIG to increase On-Time-In-Full (OTIF) deliveries by 10-15% and increase the volume of deliveries by 25% using the existing fleet.

FLEET OPTIMISATION & COST REDUCTION SIG is a leading European supplier of specialist building solutions operating across the UK, Ireland and mainland Europe and acts as a unique intermediary for contractors in the supply chain.

Within the UK, it has a fleet of approximately 500 vehicles and 180 operating centres which help to support its customers to smooth out a fragmented supply chain. With an emphasis on connecting with customers, suppliers, employees and the community as part of its transformation journey since 2019, SIG deployed Descartes’ software to increase the efficiency of its fleet, improve service for internal and external customers and consequently - grow sales.

Initially, SIG chose Descartes’ last mile delivery solution, internally known as its Vehicle Routing & Scheduling (VRS) system, during a period of consolidation within the business.

By gaining more data and insight on how the fleet could be optimised, Descartes was able to support SIG’s aim of achieving a 25% improvement in capacity. Subsequently, the VRS has unlocked on-demand route scheduling functionality to increase SIG’s agility and support the intelligent growth of the business through better visibility, planning and improved communication.

Indeed, since 2020, the system has enabled SIG to increase OnTime-In-Full (OTIF) deliveries by 10-15% and increase the volume of deliveries by 25% using the existing fleet.

“Descartes’ last mile delivery solution suite is continually developed, remaining cutting-edge and is a cloud solution, which sits perfectly with our cloud-first IT strategy,” says Edward Corbett, Head of Programme, SIG. “We were impressed by the investment and support that Descartes put into this product and the roadmap. This technology has allowed us to be agile, forward-thinking and work optimally with our fleet with benefits on costs, sales and satisfaction across the business and with our customers.

"Achieving this improvement in capacity and increase in volume of deliveries shows a real forward movement for us and the data we now have from this system gives us the ability to make informed management decisions to optimise the fleet and our business.”

IMPROVED CUSTOMER & DRIVER EXPERIENCE The VRS has also acted as an enabler for other Descartes’ hardware and software solutions to further drive operational efficiency and customer service enhancements, while Hand Held

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DESCARTES

Edward Corbett Head of Programme SIG

Terminals (HHTs) have improved the experience for their drivers.

Formerly relying on paperwork, SIG has been able to transition to a paperless environment, using ‘sign on glass’ to allow for a contactless experience - an essential during the pandemic.

In addition, SIG has adopted Descartes’ mobile electronic Proof-of-Delivery (ePOD) software, which provides the ability to give instant confirmation that a customer order has been received. Together, the software and hardware solution provides a multitude of benefits, from real-time customer notifications and access to improved tracking, to better driver-client interaction, as well as faster and more accurate payments and better stock control.

“The Descartes solution is a "DESCARTES’ LAST MILE real end-to-end offering that DELIVERY SOLUTION has improved our ability to track and offer services with SUITE IS CONTINUALLY increased visibility. We are DEVELOPED, REMAINING reconnecting with customers, partners, employees and CUTTING-EDGE AND IS A communities as much as possible and have put a CLOUD SOLUTION, WHICH focus on driving a culture of SITS PERFECTLY WITH positivity and trust within the business. Our partnership OUR CLOUD-FIRST IT with Descartes has been an STRATEGY." enjoyable relationship for us as a business, but has Edward Corbett also allowed us to provide benefits to both our customers and our employees that bring us closer together,” Edward Corbett says. “The introduction of HHTs and ePOD software improves the interaction for drivers

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and therefore their ability to connect with clients and provide more visibility throughout the process. This also became a vital component during the pandemic to offer contactless delivery services, allowing us to prioritise the health and safety of both drivers and clients.”

The latest addition to the suite, SIG is currently implementing Descartes’ telematics solution to provide a best-in-class service to drivers, with 100% of the fleet now fitted. Providing an opportunity to identify challenges, improve driving practices & behaviours, transport compliance and accurate tachograph information, SIG is aiming for a 20% reduction in idling time and 40% reduction in accidents. Gaining the ability to also celebrate success and opportunities for rewards based on the data provided through reports and graphs, SIG aims to deliver recognition opportunities to drivers such as ‘Driver of the Year’ rewards. Using digital solutions, measurements can be fair across drivers and allow guidance and support to be a focus, helping with driver recruitment and retention.

SUSTAINABLE GOALS Alongside operational efficiency and sales growth, SIG is acutely aware of its sustainability credentials and the growing importance of showing demonstrable commitment to ESG values. Through Descartes’ comprehensive last mile delivery solution suite, SIG is able to transparently communicate these values to clients, partners and employees, showing a reduction in unnecessary mileage by optimised route planning, therefore reducing carbon emissions as well as time wasted. The ability to automatically optimise based on vehicle, capacity and demand has ensured wasted journeys are reduced and efficiency increased significantly, with no change in capacity.

Cont. 

33

ADVERTORIAL

DESCARTES

Pól Sweeney VP Sales and Business Manager Descartes UK

Finally, the use of the ePOD software combined with the HHTs have also contributed with a significant reduction in the use of paper, all of which contribute positively to SIGs corporate sustainability.

Lorna Stork, ESG Director, SIG, says: “Descartes’ software has played a significant part in our steps towards some of our sustainability goals. At SIG, we strive to improve our operations to reach a net carbon zero target and look to work with partners who can help us to reduce or eliminate unsustainable processes.

We have found Descartes extremely helpful in allowing our fleet to reduce the environmental impact while enhancing operational efficiency and we look forward to continuing to develop this in the future with the planned additions to our existing solution.

"The access to data from this is allowing us to gain recommendations and make decisions for the future that can benefit all our stakeholders further, such as the introduction of electric vehicles into the fleet.”

"AT SIG, WE STRIVE TO IMPROVE OUR OPERATIONS TO REACH A NET CARBON ZERO TARGET AND LOOK TO WORK WITH PARTNERS WHO CAN HELP US TO REDUCE OR ELIMINATE UNSUSTAINABLE PROCESSES. WE HAVE FOUND DESCARTES EXTREMELY HELPFUL IN ALLOWING OUR FLEET TO REDUCE THE ENVIRONMENTAL IMPACT WHILE ENHANCING OPERATIONAL EFFICIENCY." Lorna Stork

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CONCLUSION “The building materials market is highly fluid and SIG differentiates itself by offering an agile and reliable service to our customers with the ability to track the progress of their deliveries to help better manage the supply chain,” Edward Corbett concludes. “The Descartes solution helps us manage our distribution centres and territories more efficiently, with access to real-time information on how to organise and run our facilities optimally. Our improved responsiveness makes a huge difference to our customer service and efficient resource utilisation. It helps us maintain a safe working environment for our drivers and wider UK road-user community whilst also supporting our strategic ESG objectives.”

Pól Sweeney, VP Sales and Business Manager UK for Descartes adds: “We are extremely pleased to be working with SIG and to have built such a strong relationship. It is fantastic to be able to supply a solution suite that enables them to improve their fleet efficiency and the experience for their customers and drivers, as well as reach their broader, strategic goals. Ultimately, specialist building material suppliers compete on service and we are happy to have been able to help SIG maintain its leadership in this area.” 

For further information, call 01249 477099 or email: info@descartes.com Visit: routinguk.descartes.com

April/May 2022

CYBER-SECURITY

THE IMPORTANCE OF VISIBILITY AND SEGMENTATION IN INDUSTRIAL CYBERSECURITY

BY ANTHONY ATKINS – ACCOUNT MANAGER, UK & EU

as digital transformation efforts are expanding their attack surface and opening new windows of opportunity for cybercriminals.

Today, operational technology (OT), which monitor and control physical processes and devices in industrial plants, are frequently connected to IT and corporate networks to automate tasks. This helps increase efficiency, reduce costs and improve employee safety, but the introduction of connectivity means important processes controlled by OT can potentially now be accessed be anyone on the internet.

In the last year, a dramatic rise in cyberattacks on industrial organisations has cast a spotlight on the rapidly expanding attack surface within their environments.

A series of well-publicised incidents turned into reality what many in the security industry had been warning about for years: When it comes to cyberattacks on industrial organisations, society is the casualty.

Firstly, the world witnessed a cyberattack on the Oldsmar Water facility, where an unlawful intrusion led to the attempted poisoning of the water supply into Oldsmar city. This was then followed by a ransomware attack on Colonial Pipeline, which caused fuel shortages and highlighted the physical impacts of industrial cyberattacks. Shortly after this followed a further ransomware attack, this time against meat manufacturer JBS Foods. The incident was feared to cause food shortages across the US after the company was forced to shut down operations to contain the attack.

Each of these incidents demonstrated the far-reaching implications of industrial cyberattacks and reinforced the need for their security to be prioritised. Particularly

To counter this risk, industrial organisations are advised to introduce security in tandem with digitisation.

However, according to the findings of the Dragos 2021 Year in Review, many are still leaving themselves exposed to threats and risks because of weaknesses within their security architecture.

According to this Review, 86 percent of industrial organisations have limited to no visibility into their Industrial Control System (ICS) environment, while 77 percent are not segmenting their networks effectively. When it comes to OT cybersecurity, visibility and segmentation are two of the most important security functions to protect mission critical systems. When a lack of visibility and segmentation are combined, it makes it nearly impossible to defend industrial networks and leaves them much more susceptible to attacks.

Visibility is critical in identifying threats and monitoring OT devices, while segmentation allows asset owners to separate OT networks from the internet, corporate networks, and suppliers.

However, the Review highlighted that poor security perimeters continue to be a major problem for most OT asset owners.

While it is unlikely that an adversary could cause an operational impact with

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access only to the corporate network, poor perimeters between IT and OT often allow adversaries to pivot from the corporate network to operational networks, where they can then target operational processes and potentially disrupt the supply of essential goods and services into society.

Given the risks, what are the best ways for industrial organisations to strengthen the security of their environments.

1. Build a defensible architecture One of the most important foundations of OT security comes down to a strong network architecture. This means segmenting crown jewels which are mission critical systems, while also having strong visibility across all connect OT assets.

2. Network monitoring Monitoring the network will allow security teams to see what is happening inside the network and will help to identify security vulnerabilities. It will also allow security teams to see exactly what systems are running within the OT environment and any potential security gaps.

3. Control remote access The most effective control for remote access authentication is multi-factor authentication (MFA). Where MFA is not possible, consider alternate controls such as jumphosts with focused monitoring.

The last year has demonstrated that cyberattacks on industrial organisations are growing in severity and frequency.

By improving visibility and implementing robust network segmentation, this can significantly help improve the security of these environments.

www.dragos.com 35

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To hear more about EOTs, how they work, and how our funding can help, talk to us today.

0330 123 1740 corporatelending@shawbrook.co.uk Shawbrook.co.uk/business

Commercial Loan facility, with term typically 3-5 years Capability to provide funding to the trust, the operating company, or a combination of both Repayment: amortising and bullet profile with initial capital holidays available Security: senior all assets debenture, additional security may be required

We’re seeing EOTs become increasingly popular with exiting business owners who want to protect the legacy of what they’ve built, while leaving it in experienced and knowledgeable hands.

Oliver Jenkins, Director, South West and Wales Corporate Lending at Shawbrook Bank

Employee Ownership Trust takes the wheel at F1 supplier Leading UK precision engineering firm, Retrac Productions, transferred ownership to an Employee Ownership Trust in an eight-figure deal with support from Shawbrook Bank.

Retrac Group employs 122 staff from its base in Wiltshire and supplies highly complex parts and components to Formula 1 teams and major manufacturers in the automotive and aerospace industries.

The Swindon-based firm turned to Shawbrook Bank to help finance the acquisition.

The new EOT gives our team full security for safeguarding this legacy, and over the firm’s bright future as we target growth by helping clients realise tomorrow’s technologies, like electric-powered flight and motorsports. As a specialist lender, Shawbrook Bank proved itself as a dependable partner throughout this process and its support has been instrumental in helping us to begin this new chapter for the business.

Dan Walmsley, CEO at Retrac Group

Contact us today

Proudly different

Cont.  corporatelending@shawbrook.co.uk Shawbrook.co.uk/business

0330 123 1740

FEATURE

the evolution of

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April/May 2022

ALTERNATIVE LENDING

alternative lending Alternative lending is a form of financing that provides capital to businesses and entrepreneurs, without them having to go through a traditional bank or financial institution. Forms of alternative lending include assetbased lending, peer-to-peer loans, crowdfunding and invoice finance. In this feature, Business Leader looks into the industry to see how it has changed in recent years and why it is becoming more mainstream.

According to Statista, the total transaction value in the alternative lending space is projected to reach almost £3.5bn in 2022. Also, the total transaction value is expected to show an annual growth rate (CAGR 2022-2025) of 1.89%, resulting in a projected total amount of nearly £3.7bn by 2025. Currently, the market's largest segment is crowdfunding, with a projected total transaction value of £2bn.

However, with the pandemic and economic instability a constant challenge for businesses over the last two years, the alternative lending space has risen to prominence and become more accepted as a way of raising money for businesses of all sizes.

MARKET GROWTH With the constant volatility facing businesses and nations around the world in recent years, the alternative lending rise has been viewed as one of the positive developments for entrepreneurs – especially in the UK. But why is this the case?

Stuart Bates, Founder and Commercial Director of Praetura Commercial Finance, comments: “There’s been clear examples of growth within the alternative lending market over the last two years, with changes to the way businesses go about accessing capital and facilities playing a major role. Looking at our own lending activity, we saw a 70% rise in funding applications and wrote more than £82m of new facilities in 2021. But what’s interesting are the reasons behind this growth.

"LOOKING AT OUR OWN LENDING ACTIVITY, WE SAW A 70% RISE IN FUNDING APPLICATIONS AND WROTE MORE THAN £82M OF NEW FACILITIES IN 2021. BUT WHAT’S INTERESTING ARE THE REASONS BEHIND THIS GROWTH." Stuart Bates

“The pandemic has been an obvious factor, but what we’re also seeing is that more managers, entrepreneurs, and business owners want to deal directly with decision makers instead of having to wait on an answer. It’s much harder to speak with a decision maker at a mainstream lender, such as a high street bank, which has meant growth for alternative lenders like ourselves.”

With the pandemic and the rise of new funding streams for businesses, there have been new lenders and financial firms entering the market to deal with the rise in interest.

Cont. 

Business Leader - Inspire • Inform • Connect

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FEATURE

Alexei Garan, Head of Business Funding at Shaw & Co, expands on this: “We have seen a substantial growth in alternative lending in recent years. Alternative lenders were very active participants in the Coronavirus Business Interruption Loan Scheme (CBILS), nearly tripling the number of lenders accredited by the British Business Bank compared to before the pandemic. As normalised transaction and growth funding returned, 2021 saw substantially increased alternative lending activity with even more ambitious targets being set across the market for 2022.

“The alternative lending market has emerged over the past decade to supplement the traditional banks and is now worth over £6.2bn, thanks to rapid growth in the number of providers and product ranges. We work with over 200 lenders and the last two years has certainly seen more and more providers coming on to the scene.”

However, there is no getting away from the impact the pandemic has had on businesses and entrepreneurs around the UK – and alternative lending has been at the heart for many companies trying to survive through all the challenges facing them.

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ALTERNATIVE LENDING

Conrad Ford, Chief Product Officer at Allica Bank, explains: “The market has grown considerably, but almost entirely due to Government lending schemes, which have now ended. During the pandemic, the total volume of lending in the UK was unprecedented, and while the lion’s share of that lending came from the major banks, the alternative lending market also experienced a boom.

“However, the pandemic has not seen a rise in providers. There has actually been a reduction in alternative lender providers.

Significant numbers did not survive the pandemic, either because they struggled to adapt to the rapidly-changing market or were hit by the credit losses from borrowers who were themselves impacted

by Covid-19.”

Despite the fall in the number of providers, the quantity of funding grew during the pandemic.

Jack Sparkes, Originations Manager for Fundsquire, continues: “The alternative lending market has definitely grown in the last couple of years and has acquired more visibility to early-stage companies that are looking for non-traditional funding options as they build their brand, product and or services. In fact, according to

"THE ALTERNATIVE LENDING MARKET HAS EMERGED OVER THE PAST DECADE TO SUPPLEMENT THE TRADITIONAL BANKS AND IS NOW WORTH OVER £6.2BN, THANKS TO RAPID GROWTH IN THE NUMBER OF PROVIDERS AND PRODUCT RANGES." Alexei Garan

recent studies, alternative funding volumes grew by 24% globally in 2020 despite the pandemic.

“There are a few reasons behind it.

Looking at alternative lending businesses – they are more agile, quicker, have a higher loan approval rate, and a higher potential of personalisation for businesses accessing these types of funding, in terms of payment timelines and terms. And for businesses accessing alternative lending, there is a better understanding of what these lending options offer, the pros and cons, and how the funding can boost traditional capital raising efforts as well.”

Cont. 

April/May 2022

£100k to £10m Working capital and invoice finance B2B firms How do alternative lenders approach funding differently?

Like many alternative lenders, the entire Growth Lending team has an entrepreneurial mindset, which means we all understand how crucial delivering on promises such as “fast funding” really is – after all, for many businesses, consistent cash flow is the difference between failure and success.

We have multiple examples where we have been able to issue funding in a matter of days from indicative terms – the kind of speed and agility in service that the larger banks simply cannot offer, but that fast-growing firms desperately need.

Our entrepreneurial mindset is also what drives the way we look at deals; employing a can-do attitude to make our facilities flex to client needs. In some instances this will mean layering our products so that clients can fund an acquisition, while also retaining working capital headroom, but in others it will mean leveraging against all assets so that a client can reinvest in growth and maximise future sale opportunities.

It comes down to a willingness to lend and a desire to support growth – if you genuinely know the businesses that you work with, as we do at Growth Lending, it is easy to have both in bucket-loads.

It goes without saying that an organisation’s experience of accessing funding is hugely impacted by the lender they choose to work with, but this is especially true for earlier-stage firms, or those with complex propositions, because a one-sizefits-all approach will rarely work.

Alternative lenders are able to be more agile and flexible than traditional banks, which means the types of SMEs mentioned above are far more likely to receive the tailored funding that they need.

Alternative lenders are also often SMEs themselves, so have first-hand experience of many of the obstacles that scale-up and growth organisations face. For BOOST&Co, this insight into the challenges facing high-growth businesses informs our lending approach and ensures we take the time to thoroughly understand the intricacies of each firm we work with, so that we can perfectly match our funding to their needs.

It has also given us guidance on how much we lend, because we understand that rapidly growing businesses have a significant capital requirement – whether this be in expanding their expert team, investing in technology and product development, or in enabling them to acquire complementary products.

To find out more about how alternative lenders can support your growth needs contact info@growth-lending.com or carl@boostandco.com

£2m-£10m Growth capital TMT specialists Business Leader - Inspire • Inform • Connect

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FEATURE ADVANTAGES Following its rise to prominence in recent years, due to the pandemic and another range of factors – what have been the other reasons why businesses are seeking out alternative funding streams?

profile of their business. The biggest risk with crowdfunding is that there could be loss of good faith, in case businesses fail to achieve the publicised goal or pitch, be it product development or service launch.”

Sparkes comments: “Alternative lending is typically more flexible, faster and has a higher loan approval rate than bank financing. As the fintech sector continues to grow at an incredible rate that traditional banks may struggle to keep up with, business owners can get an edge in the market by being open to alternative lending options when searching for funding.

"FOR BORROWERS, THE PRIMARY ADVANTAGE WITH DEBT CROWDFUNDING, FOR INSTANCE, IS THAT THEY GET TO TAP INTO A POTENTIALLY UNLIMITED POOL OF INVESTORS AT A RELATIVELY LOW COST."

“For instance, for debt-based alternative lending, the biggest advantages are that it is non-dilutive, you get to keep your equity, you know exactly how much you will end up paying the lender, it is quicker and secured, and there are fewer investor expectations and demands to fulfil.

However, debt financing can be risky for businesses with inconsistent cash flow, since the repayments have to be made regardless of revenue.

"Which is why it is essential to choose a lender that will work with you in case of such rare and unforeseen circumstances.

“Let’s take a look at another alternative lending option – equity and debt crowdfunding. For borrowers, the primary advantage with debt crowdfunding, for instance, is that they get to tap into a potentially unlimited pool of investors at a relatively low cost while raising the brand

Jack Sparkes

However, there are several other factors that have helped create the current alternative lending industry.

Ford comments: “The biggest advantage to alternative lending is the sheer diversity of products and providers. Traditional high street banks are fine if your needs are simple and your business has a spotless trading history; alternative lenders, however, meet the needs of those businesses that don’t fit into neat boxes and require a more tailored approach.”

And it is these differentiators that Garan believes will serve the industry well in the years ahead.

He explains: “Alternative lenders are offering faster lending decisions and often no requirements for hard asset collateral

– and sometimes no security requirements whatsoever. Perhaps most importantly, it is the length of the loan that is really standing out. Banks are rarely looking beyond a loan of three or four years, but the new players are offering eight or even ten. This makes a huge difference to an SME planning prudently for the future.”

RESPONSE FROM TRADITIONAL LENDERS Following the alternative lending market’s recent growth and taking the crown as a quicker way for companies to get funding – how have the high street banks and established financial institutions responded?

Garan comments: “We’ve seen the traditional banks responding in a number of ways. Bank credit appetite generally remains at safer levels in terms of leverage and required collateral cover. Nevertheless, some banks are selectively bringing out, or developing, lending propositions aimed at meeting SME requirements for higher leverage and cashflow-based lending.

With regards to credit assessment, banks are also paying much more attention to current and forecasted performance, rather than purely relying on historical numbers, particularly for high-growth SME businesses.

“We also see a number of the ‘Big Four’ banks working with us to bring in alternative lenders to supplement gaps in their offering, which is of huge benefit to SME clients. We expect these trends to continue.”

sme capital closes funding round British alternative lender SME Capital scooped a new investment from three family offices to expand its offering in the under-served lower middle market. The investors, from Mustard Kick, Hambleden Capital and Karan Capital, will join the company’s Board as part of the deal.

The investment allows SME Capital to accelerate growth, fund new loans and develop a new product, which it will bring to market later this year. Currently writing tickets up to £6m, the firm is sectoragnostic and provides cash flow loans to the lower middle market, which has struggled in recent years to fund events like M&A, MBOs and MBIs due to the retrenchment of mainstream banks.

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April/May 2022

ALTERNATIVE LENDING However, Bates doesn’t share this positive outlook: “With the increase in government-backed loans, traditional banks had no choice but to respond in the way that they did. However, we’re now at the tail end of the pandemic, and the banks still haven’t returned to their pre-pandemic lending levels.

COMMENT Dominic Bourquin Tax and Corporate Finance Partner Monahans

“Entrepreneurs and business owners who are reaching out to high street banks for increased facilities are not getting the answers they need.

Elsewhere, those banks that are responding are doing so very slowly.

"This isn’t ideal for businesses that need to pivot but have a much narrower space and timeline to do so. As a result, business leaders who are seeking additional capital are having to be much more imaginative.”

Ford believes that despite the impact the pandemic has had on the rise of alternate lending, the traditional banks have set themselves up for a brighter future.

He comments: “This Covid-19 financial crisis was very different to the 2008 global financial crisis, where the big banks were seen as the villains of the piece.

During the pandemic, the big banks actually played a crucial role in the delivery of Government lending schemes to hard-hit SMEs, and in some ways, this has reset the market for the big banks to dominate once again. It will be interesting to see in the coming years whether alternative lending providers bounce back and thrive again as we saw before the pandemic.”

CHALLENGES AHEAD? So with the traditional financial institutions well-placed to return to dominating the market, and life returning to ‘normal’, there isn’t the same levels of volatility that enabled alternative funding to have the incredible level of growth it has experienced in recent years.

Ford discusses the main challenges facing the industry for the years ahead: “One advantage of going to a bank for funding is that they are regulated. Conversely, the most significant challenge alternative lending poses is that the market is largely unregulated.

"Most companies borrowing would not get the same protection from lenders that they would as consumers, so they need to be careful in choosing which financial provider they seek funding from.”

Along with the established funders being in a stronger position than most alternate funding providers, there is still a level of uncertainty around what they can provide compared to the established financial institutions.

Bates comments: “The challenge is businesses with less knowledge of this space can find it harder to get to grips with alternative lending, which adds a layer of complexity. As an industry, we need to work together to improve the level of education and help business leaders understand the benefits of what we offer.

Once we’ve done that, it’s natural that more sectors will be exposed to alternative lending.” 

Business Leader - Inspire • Inform • Connect

THE SPRING STATEMENT:

A SUCCESSFUL TIGHTROPE WALK This year’s Spring Statement was a balancing act, but the Chancellor appears to have done more than was expected of him. He has introduced measures that will undoubtedly ease the pressure for UK households.

Sunak didn’t start his speech with the most attention-grabbing headlines. A 5% reduction in VAT on the installation of energy saving appliances, down to 0%, was deflating. A similar story can be said for fuel duty. However, if we remain optimistic, in the words of Tesco, ‘Every Little Helps’.

Nevertheless, he certainly pulled it back with the increase in the National Insurance threshold, matching that of income tax. This equalisation will result in a saving for 70% of workers, despite the new 1.25% Health & Social Care Levy.

Additionally, none of us could have anticipated the promise to cut income tax by a penny in 2024, saving taxpayers £5bn. Although as an election year, in hindsight, perhaps we were being naïve.

Nevertheless, the Chancellor’s statement, whilst peppered with optimism, leaves various questions unanswered.

For example, should everyone be made to pay the 1.25% levy – why is this tax increase not being targeted at the higher income earners who will feel less of a squeeze during this cost-of-living crisis?

We should be reasonably pleased with the outcomes of the statement. While nothing is perfect, the Chancellor has delivered an above par solution for the time being.

T: 01225 472800

www.monahans.co.uk 43

DEALS

ROUND-UP

The Business Leader Deal Room Business Leader highlights a selection of significant deals that have taken place in the last few months.

MANUFACTURING

HR Double Olympic Gold Champion, Col Dame Kelly Holmes MBE, recently announced the acquisition of her holistic employee wellbeing platform, Elf at Work.

The Elf at Work platform has been integrated into established global community wellness and fitness app, TRUCONNECT by TV.FIT’s existing offering, the goal being to support both the physical and mental wellbeing of employees, empowering them and their businesses to thrive.

RETAIL Amazon has been granted unconditional EU antitrust approval for its proposed $8.45bn acquisition of U.S. movie studio MGM. The European Commission said the deal would not pose competition concerns in Europe, and said it had looked into overlaps between Amazon and MGM in audio-visual content and found that the combined market shares are low and that they have strong rivals.

FINANCE Lumin Wealth recently announced that it has acquired Enhance Wealth Management, a Hertfordshire-based financial advice firm. This latest acquisition brings Lumin group assets under management to around £800m and follows on from the purchases of Chamberlain Stean & West, Everett MacLeod and Hyperion.

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Kingspan Group plc (Kingspan), a specialist in advanced insulation and innovative building solutions, has completed the acquisition of Troldtekt A/S, a manufacturer of sustainably produced wood-based acoustic boards.

With a state-of-the-art, almost zero carbon manufacturing production facility in Troldhede, Denmark, Troldtekt manufactures acoustic boards from Danish-grown Norwegian spruce and portland cement extracted from Danish mineral resources.

HR All-in-one HR, payroll and benefits platform, Employment Hero, has announced it has closed a £96m funding round, led by return investor SEEK Investments with participation from OneVentures, AirTree Ventures and other shareholders.

The support from investors at the ‘unicorn’ mark reflects Employment Hero’s strong and sustained revenue growth and prospects. This news comes on the heels of Employment Hero’s acquisition of workforce management and payroll solution, KeyPay.

MANUFACTRUING Inwido, a leading Swedish window group, has successfully acquired Greater Manchester-based Dekko Window Systems Ltd. Dekko Window Systems Ltd is a specialist manufacturer and supplier of windows and doors.

The company has approximately 200 employees along with a production facility in Greater Manchester, and in the last financial year, Dekko reported sales of approximately £21.6m.

April/May 2022

By Your Side. On Your Side.

As you navigate the obstacles and opportunities that lie ahead, having a trusted business advisor on your side is more important than ever.

For more information contact us 01392 288555 exeter@thomaswestcott.co.uk

www.thomaswestcott.co.uk

ADVERTORIAL

Demystifying Asset Finance Close Brothers Asset Finance has been providing funding for the UK’s SMEs for several decades, yet many business owners have a limited understanding of what asset finance is and how it can help them. In this short piece we outline what it is and how it works…

equity raised into your cash flow.

Repayments are calculated in line with the income stream that will be generated by the asset; at the end of the refinance term, you own the asset •

WHAT IS ASSET FINANCE? Asset Finance is an alternative form of funding used by businesses to obtain the equipment, vehicles, or capital they need to grow.

Common examples of asset finance products are: •

Hire Purchase (HP): Allows the customer to buy the equipment on credit. The finance company purchases the asset on behalf of the customer and owns the asset until the final instalment is paid

•

Refinancing (Capital Release): The finance company purchases the asset from your business and finances it back to you, releasing the

•

Finance Lease: The full value of the equipment is repaid to the finance company, plus interest, over the lease period. At the end of the term, the company can choose to: •

Continue to use the asset by entering a secondary rental period

•

Sell the asset and keep a portion of the income from the sale

•

Return it

Operating Lease: Similar to a Finance Lease, an Operating Lease allows you to rent the asset from us while you need it. The key difference between the two is that an Operating Lease is only for part of the asset’s useful life. This means you pay a reduced rental because the cost is based on the difference between the asset’s original purchase price and its residual value at the end of the agreement.

SECTORS WE OPERATE IN The beauty of asset finance is its flexibility – it can be used to fund any asset.

It makes the otherwise unaffordable affordable because it gives businesses access to the vehicles and equipment they need without incurring the cash flow disadvantage of an outright purchase.

Agreements can also be customised to the business’s needs, with flexibility on both the term and repayment schedule.

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Some of the sectors we work with: • • • • • • • • • • • • • • • • • • • •

Materials Handling Agriculture Packaging Aviation Plastics Bus and Coach Heavy Goods Vehicles (HGVs) Print Construction Renewable Energy Engineering Taxis Executive Vehicles Transport and Logistics Fairground Vehicle Rentals Manufacturing Waste and Recycling Marine Woodworking WHY CLOSE BROTHERS ASSET FINANCE? We are the largest, fast-growing, most successful and longest-established asset finance funder in the UK with over 30 years’ experience working with SMEs through all economic cycles.

Our team of finance specialists – many of who have industry background themselves - work with businesses across the UK to provide funding for both new and used vehicles and equipment. As sector experts, they understand how vital it is that you have the right tools at your disposal, so whether you are looking to expand or replace your assets, we can help.

For more information, please visit: https://www.closeassetfinance.co.uk/ asset-finance

April/May 2022

Flexible asset finance options We continue to support SMEs through the good and the challenging times.

Find out more.

www.closeasset.co.uk Close Brothers Asset Finance is a trading style of Close Brothers Limited. Close Brothers Limited is registered in England and Wales (Company Number 00195626) and its registered office is 10 Crown Place, London, EC2A 4FT.

ADVERTORIAL

Interaction designs new showpiece office for Osborne Clarke in one of the UK’s greenest buildings Interaction, the strategic workplace design and build company, has won a multi-million-pound contract to design international law firm Osborne Clarke’s new flagship office in Bristol.

Interaction has been commissioned to fit-out the law firm’s interior workspaces at Halo, part of the Finzels Reach regeneration project, which is set to be one of the UK’s greenest office buildings.

Interaction has designed a highly flexible workspace for over 800 employees that will promote agile working and staff health and wellbeing, while meeting strict sustainability criteria.

Rebecca Plummeridge, programme lead at Osborne Clarke, said: “The Interaction team has really worked with us to understand and guide how we will work in the future. The designs for the new office have gone down incredibly well with people from across our Bristol office and created lots of excitement – Interaction have understood our brief so well.

We’ve loved the experience and we’re looking forward to

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Image co urtesy of Cubex

TIO N

The cutting-edge workplace design, which makes maximum use of natural materials and light, follows months of intensive consultation between Interaction’s design team and hundreds of employees across Osborne Clarke. Interaction has also won a contract to supply furniture for the new office.

AG IN

TE R AC

Interaction has worked closely with suppliers and specialists to source sustainable materials that are designed to enhance wellbeing.

AN

, IN

As part of the design brief, Interaction met tough sustainability standards and Osborne Clarke is aiming to achieve a WELL building standard certification for the fit-out of the internal space at Halo, which has a BREEAM outstanding accreditation for sustainability.

ER WOOD – M

R TO EC

Key design features will include indoor gardens where people can work away from their desks, a yoga and spin studio, and a restaurant with a private rooftop terrace. The striking design also includes flexible meeting spaces with moveable walls and furniture that can be used for multiple different event settings.

D IE T

IR

Osborne Clarke is taking the top five floors of the landmark Halo building which will provide 74,000 sq ft of grade A office space in total. Interaction’s innovative design includes destination points on each level and an informal creative space to encourage movement between floors and greater collaboration.

the next 12 months to see Interaction deliver the beautiful design they’ve created for us.”

Interaction’s managing director, Dieter Wood, said “It’s a joy to work on projects where the client’s values and ambitions align so comfortably with ours. Osborne Clarke highly values the wellbeing of its people and the sustainability of its new workspace. The firm is creating a best-in-class workplace to take them into the future. Osborne Clarke was heavily engaged from the very beginning in both the process and the outcome, so we’ve ended up with a design that will deliver exactly what they’ve envisaged, in terms of aesthetics, usability and sustainability. It’s a partner and project we’re incredibly proud of and we’re looking forward to delivering a flagship workspace in one of Bristol’s best buildings.”

01225 485 600 interaction.uk.com April/May 2022

ESG: Why it matters to your business What do the world’s best workplaces have in common? Clue: it’s not sleeping pods, spiral staircases or even great coffee. It’s a sense of purpose which binds a community together. It’s transparency and trust. It’s a desire to create a positive impact that spreads beyond the four walls of the office.

Many of these concepts are being brought together under the banner of ESG strategies: Environmental, Social and Governance. The phrase was coined by investors looking to develop a framework whereby they could avoid unethical or “sin” stocks. Now organisations with ESG processes in place have been proven to drive faster company growth and employee and customer engagement.

Scan to download our Ultimate Guide to ESG

ESG credentials are a must in the war for talent with many people motivated to work for an organisation they view as ethical and purpose-driven, especially when it comes to younger millennials and Gen Z. In the midst of the “Great Resignation” it’s vital to keep your existing workforce engaged; surveys have shown nearly 30% of respondents have left a company due to its lack of a corporate sustainability agenda.

Your workplace is the heart of a company and a manifestation of your company’s purpose and vision; a physical representation of what you value as a business.

By ensuring your workplace is sustainable, socially-focussed and designed for employee wellbeing, you can begin to develop an ESG strategy which creates a positive environmental impact, fosters an inclusive and healthy company culture, and thrives on transparent reporting (not to mention the scope for increased ROI).

Interaction are here to help you at every step of the process – whether that’s running a sustainability audit on your furniture, defining your workplace strategy for a hybrid world or simply reconfiguring your space in a way that brings people together better.

Download now or get in touch directly to find out how we can help.

Charlie Moss (Relationships Manager) charlie.moss@interaction.uk.com 01225 485 600

www.interaction.uk.com

FEATURE

making the grade 50

Bristol is a prime office market. The bustling city is a core UK office centre, and the impact of the pandemic has done little to affect prime headline rents, indicating a positive post-Covid resurgence.

Voted as one of the best places to live in the UK in 2021, Bristol is an increasingly desirable city.

A critical undersupply of quality office space, coupled with a growing demand for Grade A workplaces, has created a strong local market for sustainable, serviced offices.

'The Big Nine' office report from Avison Young reveals that the city centre saw its strongest office activity of the year in the final quarter of 2021, bringing the total to 540,910 sq. ft. The quarterly take-up of 249,944 sq. ft was also ahead of the five-year average for the period.

James Durie, Chief Executive, Bristol Chamber & Initiative at Business West comments:

April/May 2022

COMMERCIAL PROPERTY

further rental growth by the end of the year, with at least one letting close to agreement at more than £40 per sq. ft.

Demand for office space in the city is evergrowing. A report from JLL details that of the 14 million sq. ft of office space in the city centre, more than 95% is already let out. Durie reveals that this high demand subsequently pushes the cost of rents to new highs.

"The demand for the best space is at a high, with various occupiers being gazumped and record rents being paid to secure the best space at rents in excess of £40 per sq. ft. pa."

As calls for commercial properties in Bristol shows no sign of abating, developers exploit and improve the Grade B market to satisfy the appetite.

"THE DEMAND FOR THE BEST SPACE IS AT A HIGH, WITH VARIOUS OCCUPIERS BEING GAZUMPED AND RECORD RENTS BEING PAID TO SECURE THE BEST SPACE AT RENTS IN EXCESS OF £40 PER SQ. FOOT PA." James Durie

"The very strong economic fundamentals of the city and surrounding region continues to attract in talent and investment. With its growth story and fastgrowing knowledge based economy, it's on the shopping list of many major institutions looking for long-term good growth - in a city which understands that its future is anchored around clean and inclusive growth and prosperity."

CURRENT RATES PER SQ. FOOT According to Avison Young’s quarterly Big Nine office report, the city centre headline rents remained at £38.50 per sq. foot in the third quarter, up from £35.50 at the start of the year. The report predicted

KEY DEVELOPMENTS Demand for central commercial space continues to rise in the South West city.

With a growing appetite for Grade A space, there is several schemes under development. Durie sees lots of potential: "New Grade A existing space comes in at around 75,000 sq. ft at The Distillery, with over 400,000 sq. ft under construction at major schemes such as EQ (129,000 sq. ft), the Welcome Building (206,000 sq. ft) and Assembly C (81,000 sq. ft). There are so many cranes over the city skyline, particularly in the Redcliffe & Temple quarters."

"There are a number of other refurbishment schemes under way, providing around 50,000 sq. ft of ESGready Grade B space in late 2022/early 2023, and six schemes which are due to start on site during the summer of 2022 to

Business Leader - Inspire • Inform • Connect

provide ESG ready space by early 2024 of around 700,000 sq. ft," he continues.

ESG and enhanced amenities are high on the list for client requests. Simon Price, Head of Agency at Alder King, sees these demands being met in the city’s current developments.

“4 Glass Wharf - at 212,000 sq. ft, Bristol’s largest ever speculative city centre office scheme – is now under construction and scheduled for practical completion in Q4 2023. This will deliver flexible workspace, exceptional cycling facilities, an open kitchen and event space, a ground floor café, wellness and fitness facilities and landscaped terraces with views of the Bristol skyline.

“360 Bristol, which overlooks the St James Barton roundabout, will deliver 44,000 sq. ft of refurbished open plan space this month, with some of the city’s best amenities, including a café/business lounge, a fully-serviced gym and cycling facilities with showers, changing and drying facilities," he adds.

Halo is a smart Grade A office building of 116,000 sq. ft being developed by regional developer Cubex. It is set to be one of the greenest office buildings in the UK and the fit-out of the internal space has a BREEAM outstanding accreditation for sustainability.

Hannah Waterhouse, Director, Office Agency at JLL Bristol, notes the limiting features to Halo at Finzels Reach and One Portwall Square.

"Both are almost entirely pre-let and between them will only bring just over 30,000 sq. ft of new, speculative space to Bristol’s market."

However, she notes that EQ, Buildings B & C Assembly and The Welcome Building are also due to complete next year, totalling 500,000 sq. ft.

These new developments aim to capitalise on post-COVID demand for highly sustainable new regional offices. Adding to this supply is recently refurbished Grade B stock that meets all the increasingly important ESG criteria, such as 1 Linear Park (16,000 sq. ft), 10 Victoria Street (45,000 sq. ft) and building 360 (42,000 sq. ft).

Cont. 

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FEATURE TRENDS Bristol was voted the best city in the country last year for its green credentials.

It is set to benefit from some of the highest levels of technology-led employment growth of any UK region between now and 2025, a trend likely to further bolster demand for sustainable and modern Grade A office space.

As businesses hope to attract employees back to the office, the recovery of demand has been characterised by prioritising quality. Waterhouse recognises the growing importance of quality for commercial properties, saying she has registered "A ‘flight to quality’ to attract the best employees and the rapid rise of ESG which has gone up the agenda for both investors and occupiers."

COMMERCIAL PROPERTY He explains: “We are seeing occupiers attracted towards quality of product, amenity offerings, outside space, ESG criteria and sustainability. Lease flexibility and the offer of fitted space are also important and tenants are willing to pay a premium for this type of offering. Buildings which are considered lacking or mid-tier in these departments are the ones that are struggling."

He continues: "Generally speaking, I think this trend will continue. Buildings will continue to become greener with a bigger emphasis on carbon neutrality going forward. This is something we are already starting to see with refurbishments claiming to be more sustainable as they retain so much of the existing structure as opposed to new builds.”

Sustainability has also taken centre stage.

"EQ will have the highest sustainability credentials that Bristol has seen and will be the first speculative net-zero carbon building in use in the South West," says Waterhouse.

Expect to see a solid green focus and a spotlight on staff wellbeing and productivity, alongside a continuous adaptation in how and where people want to live and work. Price also points to higher motivations in terms of quality.

Christopher Meredith, Director in the office agency team at Savills Bristol, acknowledges the upgrade in client expectations and a stronger focus towards more sustainable and eco choices.

"The most noticeable feature of the market is the number of firms looking to reduce the size of their office requirements but, significantly, trading up in quality so as to provide the amenities that will encourage

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staff back into the office and impress visiting clients.

“Developers and investors are responding to this and incorporating strong ESG credentials and enhanced amenities into their developments", Meredith adds.

According to the Big Nine report, a robust end to 2021 brought total take-up across the Big 9 cities to 8.1 million sq. ft. This is 5% down on the ten-year average, but 42% up on 2020. The report reveals that the national Q4 take-up was the highest quarterly total for more than three years.

Opportunities abound to improve commercial accommodation in Bristol, satisfying occupiers’ ESG agendas and bringing best-in-class workplaces into the future. 

“WE ARE SEEING OCCUPIERS ATTRACTED TOWARDS QUALITY OF PRODUCT, AMENITY OFFERINGS, OUTSIDE SPACE, ESG CRITERIA AND SUSTAINABILITY." Christopher Meredith

April/May 2022

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FEATURE

COMMERCIAL PROPERTY

the future of outdoor media is digital and wildstone are at the forefront of its revolution

Damian Cox CEO & Founder, Wildstone Site Location: Cromwell Road, London

Out-of-home (OOH) advertising reported a strong 29% growth in 2021, with the annual revenue of £901m. The figures collated by PwC for Outsmart show that Digital OOH accounted for 64% of total OOH revenue and continues to grow at a pace three times as fast as its traditional counterpart. The sector is clearly shifting from classic billboards to digital screens. But why?

Damian Cox, the CEO and Founder of Wildstone, Europe’s leading aggregator of outdoor media infrastructure, explains: “Digital billboards are the future of OOH advertising for several reasons, both commercial and environmental.

The campaigns can be better targeted based on the screen location and quickly adapt to traffic conditions or changing weather. Multiple brands can advertise on one screen, as the campaigns rotate automatically every 10 seconds. This, in turn, eradicates the need for changing the posters every two weeks, which saves tonnes of paper and CO2 generated by frequent vehicle trips to thousands of billboard sites.

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Another benefit is the rationalisation of the overall number of advertising panels.

One slim, modern digital screen replaces two, three, sometimes even four traditional billboards, resulting in a less cluttered environment.

"Last but not least, there’s a financial benefit to the property owners who can capitalise on land and buildings that are suitable for advertising. Rents on traditional billboards are being squeezed.

"At Wildstone, we are able to offer our landlords an uplift in rent for their advertising sites, which we convert to digital.”

"THERE’S A FINANCIAL BENEFIT TO THE PROPERTY OWNERS WHO CAN CAPITALISE ON LAND AND BUILDINGS THAT ARE SUITABLE FOR ADVERTISING." Damian Cox

Cox and his team are driving the digital revolution in the sector and lead the way in innovative outdoor advertising, with a special focus on exceptional quality and high performance technology.

Wildstone was founded in 2010 and holds an impressive portfolio of over 3000 outof-home assets, including digital 48-sheet screens, classic billboards, as well as super-premium digital sites.

The company buys and rents property assets for outdoor advertising across the UK and Europe, helping hundreds of landlords generate additional revenue from their properties.

April/May 2022

Advertising so engaging you even read the small print

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ceo in focus

CEO IN FOCUS

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April/May 2022

AMALI DE ALWIS MBE

AMALI DE ALWIS MBE SUBAK Amali de Alwis is CEO at Subak, the world’s first not-for-profit accelerator that scales climate impact through data, policy and behaviour change. Prior to this, she was Managing Director of Microsoft for Startups UK and CEO of Code First: Girls. Outside of the day job, Amali is a Board member at Ada National College for Digital Skills, the Raspberry Pi Foundation, and Festival UK 2022. She was a founding member at Tech Talent Charter and was awarded an MBE in 2019 in the New Year's Honours list for Services to Diversity and Training in the Tech Industry. She spoke to Business Leader about her career in tech.

YOU’VE HAD AN EXTENSIVE CAREER IN TECH – CAN YOU TELL ME ABOUT YOUR TIME AS CEO FOR CODE FIRST: GIRLS? Code First: Girls (CF:G) was about helping to drive effective change in an industry that is not only one of the fastestgrowing, but one that I still find one of the most exciting – technology! Especially as there is no such thing as a ‘nontech’ business these days, making sure that the industry has access to the best talent, and that all individuals can access these exciting and well-paid opportunities, is critical.

I came in as CF:G’s first CEO to build out the company, and had the privilege of growing it into a multi-awardwinning organisation that not only taught tens of thousands of women across the UK to code for free, but also supported organisations – ranging from Bank of America and Goldman Sachs to Vodafone and BT – to hire the best tech talent.

It was also my first foray into mission-led companies – specifically those that generate revenues to drive growth whilst maintaining a strong mission focus.

CAN YOU TELL US ABOUT YOUR DECISION TO JOIN AS MANAGING DIRECTOR OF MICROSOFT FOR STARTUPS UK AND WHAT YOU ACHIEVED WHEN YOU WERE THERE? I moved to Microsoft because I wanted to share my experiences of building start-ups and developing growth propositions to help other start-ups grow, as well as to learn more about SaaS and AI sectors.

Whilst there, I led programmes and teams that helped young tech businesses – primarily innovative start-ups and scale-ups operating in the B2B SaaS space to grow.

The support provided included help with their technology, funding, revenue, and company building. We also had a fantastic ‘AI for Social Impact’ programme that supported companies with a social mission who utilise AI to solve society's biggest issues.

It was a great experience, and I had an incredible opportunity to get to know thousands of founders and companies, understand their growth challenges, and develop programmes that could practically and pragmatically help them to overcome those challenges.

Cont. 

Business Leader - Inspire • Inform • Connect Busine

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CEO IN FOCUS HOW HAS FEMALE ENTREPRENEURSHIP EVOLVED IN RECENT YEARS? Female entrepreneurs have always been part of society. Whilst there’s still a long way to go before they have equity in access and equal recognition of their achievements, there are successes to be celebrated.

Looking at recent years, seeing the successes of individuals such as Poppy Gustafsson of Darktrace, Sharmadean Reid of Beautystack, and Maria Raga of Depop is really inspiring. It’s a shame we’re still not seeing the deserved levels of funding going to female founders (only 2.2% of funding goes to female-founded businesses), however we are seeing the growth of organisations like Angel Academe, WeAreTheCity, and Female Founders Fund to invest and profile female founders, as well as greater awareness of the huge opportunities being missed by only investing in a biased way.

WHAT MORE CAN BE DONE TO SUPPORT WOMEN IN TECH AND ENTREPRENEURSHIP? Fund, train, and profile – that’s really what it comes down to.

We need to publicly champion the women who are already working in tech and entrepreneurship, so that they are seen by investors and clients, as well as by younger women looking to enter the space.

We then need to offer accessible training and support networks for those who are new to tech entrepreneurship, to help them develop as leaders and learn how to raise capital.

Lastly and most importantly, we need to fund them. It’s easy enough for those who fund to declare themselves as allies, but all that does is prove they want to be seen as decent human beings. If you are a funder, skip the lip service and put your money where your mouth is. Hunt down and then do first and follow-on investments in female founders and help them shift from being minority underdogs to major players.

YOU’VE RECENTLY TAKEN UP THE ROLE OF CEO AT SUBAK – CAN YOU TELL ME ABOUT THE COMPANY AND YOUR GOALS AS ITS LEADER? Subak is a global accelerator and climate data cooperative that funds and scales tech start-ups and individuals who are tackling climate change through data. We were set up with the toughest climate challenges in mind, and the recognition that solving those issues at speed would need us to link tech, data, policy, and human behaviour and collaborate across the public, not-for-profit, and corporate sectors.

We believe that if one person solves part of the puzzle, we should share that knowledge so all sides can solve climate issues quicker, and we support this by offering equity-free funding, growth and mentorship programmes, as well as links into leading climate and tech sector experts. That’s why Subak’s members and fellows

are, by definition, not competitors – they’re collaborators.

Taking on the role of CEO at Subak has almost been an amalgamation of several of the roles I’ve done in the past. From my early career as a quant researcher through to building a start-up and then developing programmes to help tech start-ups and scale-ups grow, all of these roles have helped me to understand not only how to build and scale financially-robust tech and mission-led companies, but also how to formulate this to help others do the same.

Looking to the coming year, my focus will largely be on driving growth and impact. We recently launched Subak’s first international node in Australia, and we’ll be launching another international node in the coming 18 months. Additionally, we’ll be onboarding our next accelerator and fellows cohorts in February, and raising a further fund as a regranter to enable us to help even more early-stage, not-for-profit climate start-ups.

With climate change being the most critical issue we face as humanity today, it’s too urgent to move slowly and not commit to as a first priority.

REGARDING CLIMATE CHANGE – CAN BUSINESSES REALLY MAKE A DIFFERENCE? I believe that the tech industry, and all of us as businesses and individuals, need to start paying back the cost of our successes.

We have built so many amazing things, but often without considering the true impact of that growth, or acknowledging our responsibility to the communities and environments we operate in.

This is where tech can have a huge impact by supporting the funding, research, and technological development of entities tackling climate change, and by sharing data, knowledge and tools.

"TAKING ON THE ROLE OF CEO AT SUBAK HAS ALMOST BEEN AN AMALGAMATION OF SEVERAL OF THE ROLES I’VE DONE IN THE PAST. FROM MY EARLY CAREER AS A QUANT RESEARCHER, THROUGH TO BUILDING A START-UP."

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April/May 2022

AMALI DE ALWIS MBE This sharing of data and resources is particularly critical. We have a lot to do in a desperately short amount of time, and for those who continue to focus only on themselves and hoard data and resources, this won’t only be to the detriment of the planet, it will be to the detriment of their businesses as well, with costs going up, resources becoming more scarce, increased inequality, and ultimately, the slowdown and regression of global progress and prosperity.

YOUR SENIOR TEAM IS MADE UP OF INDUSTRY-LEADING INDIVIDUALS – IS THIS KEY TO BUILDING A TEAM THAT CAN MAKE A REAL DIFFERENCE? I am beyond lucky to work with a team of such talented and motivated individuals, who not only are passionate and knowledgeable about climate change, but who also understand tech start-ups, are willing to iterate and innovate at speed, and know how to support others doing the same. It’s really critical when trying to address an issue as big as this, as it means I can trust the team to steer me in areas that I’m not an expert in and validate our strategies as knowledge leaders in their space.

I also have the most incredible Board and advisors – from Baroness Bryony Worthington who was the lead author on the UK Climate Change Act, to Michelle You who co-founded Songkick, and Steve Crossan who was Head of Product at DeepMind. These incredible individuals across climate, tech, and entrepreneurship are helping us figure out how to operate and grow effectively.

WHAT MAKES A GOOD/BAD LEADER? I think a good leader is someone who can create an ambitious vision for the future of a company, and then work with their teams and stakeholders to deliver to that goal in a conscientious way.

They are empathic and fair, they keep an eye on how the world changes, and consider the impact of their business on the world around them. It’s not an easΩßy balance and there are often hard decisions to make and challenges to overcome, but good leaders anchor their companies to overcome those issues and take responsibility for the outcome – both good and bad.

Bad leaders, in my mind, are those who get consumed by any previous success in a way that leads to arrogance, ignorance, hubris and short-sightedness. Those who chase success at the cost of their teams or the societies they operate in, who let their own biases and prejudices lead them, and those who forget to listen.

WHAT ARE YOUR FUTURE GOALS? This is just the beginning for our team at Subak! Our community has set some ambitious goals to help mitigate climate change, and we’re here to help them achieve that. The global need for innovative solutions has never been more critical, and I believe Subak is uniquely positioned to have a meaningful and global impact on climate change by bringing together tech, policy and consumer behaviour, and helping people find the answers to the biggest climate problems. 

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APPOINTMENTS

ROUND-UP

people

& appointments Business Leader gives a rundown of recent appointments and promotions across various sectors.

INSURTECH COMPANY HIRES FORMER TRACTABLE EXECUTIVE AS CHIEF EXECUTIVE OFFICER Sprout.ai - the insurance technology company reimagining the insurance claims process - has appointed Roi Amir, a former executive at Tractable, to the position of Chief Executive Officer.

The technology is used by some of the world’s largest insurance companies, including Zurich, and is designed to make the insurance claims process fast and efficient for end-customers.

FIRST FEMALE PRINCIPAL AND CEO APPOINTED AT LEEDS COLLEGE OF BUILDING

NEW HASELTINE LAKE KEMPNER CHIEF EXECUTIVE UNVEILED Leading international Intellectual Property (IP) law firm, Haseltine Lake Kempner (HLK) recently announced the appointment of Graham Lambert as its new Chief Executive.

Graham has been at HLK for 11 years, holding senior leadership roles, first as Finance Director and then as the firm’s Chief Operating Officer, and has played a considerable role in successfully transforming HLK into the firm that it is today.

YFM ANNOUNCES NEW CHIEF COMPLIANCE OFFICER Experienced compliance professional Jen Townshend is the latest recruit to join the expanding team at private equity firm, YFM Equity Partners, taking on the role of Chief Compliance Officer.

With a heritage approaching 40 years, YFM has recently expanded to a 43-strong team.

FINTECH ECOSYSTEM NEW HEAD OF COMPLIANCE Bitfrost, the FinTech ecosystem, has appointed Eva Lorenzo as Head of Compliance. Eva will lead a team of staff responsible for ensuring regulatory compliance and organising licensing expansion in Gibraltar, Switzerland, Cyprus, Hong Kong and the UK.

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Leeds College of Building has announced Nikki Davis as the next Principal and CEO, making her the first woman to hold the post in the 60-year history of the institution. Leeds College of Building has around 5,500 students, covering 16-18 full-time study programmes, adult provision, HE courses, and bespoke programmes for employers.

GROUP CHIEF RETAIL OFFICER OF THE POST OFFICE JOINS TAXI STUDIO’S BOARD Martin Roberts, Group Chief Retail Officer of the Post Office, has joined the board at Taxi Studio, the brand expression agency, as Non-Executive Chairman. The appointment follows a succession of major new business wins over the past twelve months, including roster appointments with Nestlé Health Science, The Coca-Cola Company, Mondeléz and Kimberly Clark.

LSE MARSHALL INSTITUTE APPOINTS DIRECTOR OF ITS NEW ACCELERATOR The LSE Marshall Institute recently announced that venture philanthropy and investment specialist Leslie Labruto will be Director of its newly-launched Marshall Impact Accelerator, a firstof-its-kind launching ground for promising and not-for-profit social ventures that focus on tackling global challenges.

April/May 2022

AI COMPANIES IN THE UK

top 32

ai companies in the uk For our latest Top 32 list, we have profiled the UK’s leading artificial intelligence (AI) companies and the senior figures that lead them.

Whether they are established, international brands, or disruptive forces about to revolutionise their sector – these are the companies that are making waves within the AI community.

HOW HAVE THE TOP 32 BEEN CHOSEN? We asked our readership to suggest companies and individuals that deserve to have the spotlight shined on them for what they are achieving within the tech space.

However, if you feel there are others that deserve to be included on this list, then please email editor@businessleader.co.uk and they will be included in the digital version on www.businessleader.co.uk.

This list is in no particular order.

Business Leader - Inspire • Inform • Connect

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TOP 32

onfido MIKE TUCHEN Onfido is the new identity standard for the internet. Its AI-based technology assesses whether a user’s government-issued ID is genuine or fraudulent, and then compares it against their facial biometrics. That is how Onfido has built its industryleading reputation and has given companies like Revolut, bunq and Bitstamp the assurance they need to onboard customers remotely and securely. Founded in 2012, Onfido now helps over 800 companies verify their users. The company has over 500 employees across the world, with offices in London, San Francisco, New York, Lisbon, Paris, Amsterdam, New Delhi and Singapore.

wayve ALEX KENDALL

callsign ZIA HAYAT Callsign is pioneering digital trust through its proprietary technology that uniquely mimics the way humans identify each other in the real world. Positive identification of genuine users delivers privacy, safety and minimal friction, whilst ensuring that bad actors are blocked.

Through a simple 'Swipe or Type', users can be personally recognised to a 99.999% accuracy, delivering the highest fidelity AI-based user recognition for the digital world. The company’s globally used platform uses intelligence-driven authentication combined with fraud analytics that use deep learning technology to fight against fraudulent activity, from identity fraud to cyber threats.

graphcore NIGEL TOON Bristol-based ‘unicorn’ business Graphcore is a global semiconductor company that develops accelerators for AI and machine learning. Valued at more than $2.8bn, the firm’s Intelligence Processing Unit (IPU) helps tech innovators make new breakthroughs in the machine learning space to help ‘enhance human potential’. The Graphcore IPU is going to be transformative across all industries and sectors, with a real potential for positive societal impact from drug discovery and disaster recovery to decarbonisation.

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Wayve is pioneering artificial intelligence and machine learning software for self-driving cars. Its unique end-to-end machine learning approach learns to drive in new places more efficiently than competing technology through the use of optical cameras.

The company has been testing autonomous vehicles on public UK roads since early 2018, and now operates a fleet of electric vehicles fitted for autonomous operation and technology development. Earlier this year, Microsoft, Virgin Group, and investment firm Baillie Gifford were a part of its latest $200m investment round.

beamery ABAKAR SAIDOV Leveraging an industry-first AI-powered innovation, Beamery’s Talent Lifecycle Management platform helps organisations realise their business potential. They can identify and prioritise potential employment candidates that are likely to thrive at their organisation, reach diversity targets, unlock career ambition opportunities for existing employees, and understand the skills and capabilities they need to build their workforce of the future.

Last summer, the company raised $138m in funding, giving the company a valuation of more than $800m.

patsnap JEFFREY TIONG Founded in 2007, Patsnap has grown into a global provider of R&D analytics for analysing tech trends, driving innovation, and competitor intelligence. As a global leader in connected innovation intelligence, Patsnap uses AI-powered and machine learning technology to comb through billions of datasets and help innovators connect the dots. With a team of more than 800 spanning three continents, more than 10,000 customers in 40 countries, and over $400m in funding, the company is revolutionising the innovation process for companies in a wide range of sectors.

April/May 2022

AI COMPANIES IN THE UK

century tech PRIYA LAKHANI OBE CENTURY is an award-winning teaching and learning platform for primary and secondary schools, colleges, and universities.

Using learning science, AI and neuroscience, CENTURY creates constantly-adapting pathways for students and powerful assessment data for teachers. Founded in 2013, the company is currently scaling its AI-powered learning technologies to more schools, colleges, universities, and employers across the world, following an acceleration in the adoption of technology in education in recent years. The company's vision is 'for every teacher and learner to have access to intelligent tools that help them succeed'.

contractpodai SARVATH MISRA & ROBERT GLENNIE Priya Lakhani OBE CENTURY Tech

Alex Kendall Wayve

Mike Tuchen Onfido

Created in London in 2012, this LegalTech firm is an international leader in the contract lifecycle management industry, which is known for simplifying processes across the full spectrum of in-house legal teams’ workloads through its AI-driven platform. Harnessing the combined power of the IBM Watson and Microsoft Azure AI engines, and shaped with modern legal design thinking, ContractPodAi are defined by constant innovation. ContractPodAi Cloud, its pioneering platform, sets a new standard for LegalTech user experience with easy-to-use templates and guided workflows. The robust and intuitive system is deployed for legal and non-legal users for end-to-end legal document management. ContractPodAi now has global offices in San Francisco, New York, Chicago, Glasgow, Mumbai and Toronto.

cytora RICHARD HARTLEY & AENEAS WIENER Cytora was founded in 2014 and uses AI to underwrite risk more accurately. It works across large corporates, SMEs, and mid-market firms. Cytora is the configurable platform that enables commercial insurers to create digital workflows by digitising, evaluating, and routing risks. The company is creating new foundations for insurance by providing insurers with the building blocks they need to deliver efficient, accurate underwriting and seamless customer experiences. Powered by AI, Cytora is able to distil the seven-day underwriting process down to 30 seconds via its API.

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TOP 32

Charles Delingpole ComplyAdvantage

Thomas Graham Metaphysic

David Benigson Signal AI

Lucie Glenday MySense

complyadvantage

signal ai

CHARLES DELINGPOLE

DAVID BENIGSON

This UK RegTech firm has built the world's only global AI-driven database of people and companies to power anti-money laundering and financial crime detection. ComplyAdvantage believes businesses need real-time financial crime insight to put them in control of their future. The company actively identifies tens of thousands of risk events from millions of structured and unstructured data points - every single day. ComplyAdvantage’s hyperscale technology helps to detect suspicious behaviour and uncover hidden risks throughout the customer lifecycle, helping companies maintain the highest level of compliance oversight and integrity.

Signal AI is a global decision augmentation company, turning the world’s data into knowledge and empowering business leaders across a range of industries to make informed and confident decisions. 40% of the Fortune 500 companies, including Deloitte, Bank of America and Google, use the Signal AI decision augmentation solution for real-time market and media intelligence to uncover trends, risks and opportunities and support critical decision-making. The company has attracted investment of more than $100m to build out its decision augmentation solution and transform the way businesses make decisions.

mysense

metaphysic

LUCIE GLENDAY

THOMAS GRAHAM

MySense is a wellbeing analytics platform that is changing the future of healthcare. Its sophisticated AI learns an individual's wellbeing and behaviour patterns to establish what ‘being well’ looks like for that person. Realtime insight into what is normal and abnormal for an individual allows health and care organisations to prioritise and take preventative action before situations escalate. Working with NHS trusts, local authorities and private organisations, MySense has been proven to help reduce hospital admissions, GP appointments and unnecessary visits.

Metaphysic, a company that develops artificial intelligence for hyperreal virtual experiences in the metaverse, recently raised $7.5m from leading tech investors and creators, including Section 32, 8VC, TO Ventures, Winklevoss Capital, and Logan Paul. The company rose to prominence following its viral Tom Cruise ‘deepfakes’, and its hyperreal synthetic media is already being used in several ways, sharpening viewers' ability to suspend disbelief and become more deeply immersed in imaginary worlds.

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April/May 2022

AI COMPANIES IN THE UK

oxbotica PAUL NEWMAN & GAVIN JACKSON Headquartered in Oxfordshire, Oxbotica is an autonomous vehicle software company. Their single, unifying self-driving technology platform is configurable to safely transport people and goods any time, any place and in any vehicle. Self-driving technology is a marvel in cutting edge robotics, ML, AR, and AI engineering, and Oxbotica's ‘driver’ is the core of its technology. The Oxbotica ‘cloud’ connects autonomous vehicles to its customers’ existing fleet management platforms, giving them an abundance of autonomous driver supply to meet growing demand.

Alex Dalyac Tractable

tractable ALEX DALYAC Tractable develops AI for accident and disaster recovery. The aim of the company is to help the world recover faster from accidents and disasters that affect hundreds of millions of lives, from car accidents to full-scale floods and hurricanes.

Accident and disaster recovery starts with visual damage appraisal: assess the damage, calculate the cost, unlock the funds, and rebuild. Tractable's belief is that when disasters hit, the response could be 10-times faster, thanks to AI. Founded in 2014, Tractable has a world-class R&D team with over 30 years of combined research experience, and its solution is built on five years of dedicated work undertaken by a team of Oxford/ Cambridge-trained researchers.

synthesia LOURDES AGAPITO, VICTOR RIPARBELLI, MATTHIAS NIESSNER AND STEFFEN TJERRILD Synthesia is a software company founded in 2017 by a team of researchers and entrepreneurs from UCL, Stanford, TUM, and Cambridge. Its mission is to power the video-first internet: replace cameras with code and make everyone a creator. Through its platform, users can create professional AI videos from text in more than 60 languages. Synthesia allows users to turn text or a slide deck presentation into a video, complete with a talking avatar. They can use avatars or create their own in minutes by uploading some video. Users can also upload a recording of their voice, which can be transformed to say almost anything. The service is used by companies such as Accenture, Nike, BBC, Google, Amazon, and more.

Business Leader - Inspire • Inform • Connect

healx DR TIM GUILLIAMS Cambridge-based Healx is a mission-driven technology company pioneering the next generation of drug discovery to bring novel, effective treatments to rare disease patients around the world.

There are 7,000 known rare diseases that affect 400 million people across the globe, but only 5% of those conditions have an approved treatment. By combining frontier AI technology with deep drug discovery and development expertise, Healx can accelerate the pace, increase the scale, and improve the chance of success of rare disease treatment development in order to meet this huge unmet need and have an unprecedented patient impact.

Cont. 

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TOP 32

Jonathan Wolf ZOE

ZOE JONATHAN WOLF ZOE is a nutritional science company that is on a mission to help people reimagine how we eat, paving the future of nutritional science by leveraging AI, scientific research, and software engineering. The company is tackling a range of complex product, engineering, data, logistics, UI/UX challenges that enable its customers to understand their unique biological response to food. Since ZOE's launch in 2017, the company has grown from five to 60 individuals, and its products, insights and advice have been covered by many household media brands in the UK and internationally.

lifebit DR MARIA CHATZOU DUNFORD Lifebit empowers therapeutic leaders and pioneers in precision medicine on how to access and analyse siloed biomedical data.

Generating large amounts of biomedical data has become relatively straightforward.

The challenge now is how organisations can access and utilise data stored across thousands of disconnected locations.

Lifebit CloudOS is the world’s first federated genomics platform for unified and secure research over distributed big data. From pharmaceutical giants to global research institutes, to genetics companies and more, Lifebit CloudOS leads the way with its outstanding UX/UI, seamless integration to open-source tools, powerful cohort browser, and advanced AI functionality.

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April/May 2022

AI COMPANIES IN THE UK

benevolentai JOANNA SHIELDS BenevolentAI is at the forefront of a revolution in drug discovery and development in the UK and around the world. Founded in 2013, the London and Cambridgebased company combines advanced AI and machine learning with cutting-edge science to decipher complex disease biology and discover optimum therapeutic interventions. Its suite of exploratory and predictive AI tools allows scientists to interrogate a range of data and disease networks within a graph, ask biological questions, surface novel insights, and triage hypotheses.

safetonet RICHARD PURSEY Social media and instant messaging have revolutionised the way in which we interact and socialise with each other. While the benefits of the internet are immeasurable, it has opened the door to risks that can affect children’s psychological and physical welfare.

SafeToNet has developed pioneering technology that includes AI to tackle key online threats such as cyberbullying, sextortion, grooming, abuse, and aggression. It provides real-time advice and guidance for children and parents about online issues as they arise and at the exact time when help is needed the most.

thread KIERAN O'NEILL Thread is a clothes discovery service and personalised shop that makes it easy for people to dress well. The company was founded in 2012 by three founders who wanted to dress well but found shopping to be a chore. There were too many options, and it was too hard to find new ideas for what to wear that would suit them specifically. By blending the expertise of stylists with smart AI, Thread built a more personalised clothes shopping experience - one that provides individually tailored outfit ideas and style advice, plus a personalised shop with over 1,000 of the world’s best brands in one place.

polyai NIKOLA MRKŠIĆ & TSUNG-HSIEN WEN PolyAI is creating next-generation conversational AI for unbeatable customer service automation.

PolyAI builds and deploys voice assistants for automating customer services, which sound like real humans. PolyAI's tech, therefore, carries on natural conversations with customers to solve their problems. Its AI-driven voice assistants understand customers, regardless of what they say or how they say it. Its customers include some of the leading names in banking, hospitality, insurance, retail, and telecommunications. PolyAI voice assistants cut down on wait times and free up live staff to focus on calls requiring empathy and judgment.

Business Leader - Inspire • Inform • Connect

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TOP 32 Tim Sadler Tessian

tessian TIM SADLER Tessian utilises AI and ML to automatically stop data breaches and security threats caused by human error – like data exfiltration, accidental data loss, and phishing attacks – with minimal disruption to employees’ workflow. That means employees are empowered to do their best work, without security getting in their way. Founded in 2013, Tessian is backed by renowned investors like Sequoia, Accel, March Capital, and Balderton, and has offices in San Francisco, Boston and London.

five ai STAN BOLAND Cambridge-based FiveAI is developing software to power shared self-driving vehicle services across Europe. Boland’s firm is working to establish transport systems that are quicker, greener, safer, more accessible, and more productive for city streets across the continent. FiveAI is building self-driving software components and development platforms to help autonomy programs solve the industry’s greatest challenges. FiveAI has brought together the best minds in AI, engineering, and mobility to deliver its shared transport service, and is currently managing rigorous off-road testing of trial vehicles.

loopme STEPHEN UPSTONE LoopMe is an outcomes-based platform that closes the loop on digital advertising. By leveraging AI to optimise media delivery in real-time, the firm drives measurable uplift for business outcomes and more effective advertising across online and offline marketing goals, including brand lift, purchase intent, consideration, foot traffic and sales. LoopMe’s core business helps brands and agencies achieve better advertising results powered by their AIplatform and flagship product, PurchaseLoop. Founded in 2012 with the mission to create better consumer experiences through innovation, LoopMe is powered by data, in order to bring people and brands together. The company now has 11 global offices in the US, Canada, Singapore, Ukraine and Hong Kong.

Stan Boland Five AI

mylevels LAURA DOUGLAS

Stephen Upstone LoopMe

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MyLevels identifies what are the best foods for people to eat through AI and the use of its continuous glucose sensors to show people their real-time sugar level responses, and then analyse this data to show people what the best food options are for them. The company's mission is to provide an affordable solution for lasting weight loss that leverages the power of AI to help users make the best choices for their own unique body. The goal is for MyLevels to become an AI nutritionist in your pocket, automatically recommending and delivering meals to you based on your unique health goals.

April/May 2022

AI COMPANIES IN THE UK

(L-R) Marc Warner, Angie Ma and Andrew Brookes Faculty

faculty MARC WARNER, ANGIE MA, AND ANDREW BROOKES

Laura Douglas MyLevels

Business Leader - Inspire • Inform • Connect

Faculty is a founder-led company, and its guiding mission has been to bring the benefits of AI to everyone. Founded in 2014, the Westminster-based firm started with the Faculty Fellowship, helping PhD and postdoc students make the tricky transition from academia into careers as data scientists.

Companies hiring from the Faculty Fellowship were asking for data science support on some of their more complex problems; it was these projects that started its evolution into Faculty as we know it today. Faculty now works on some of the most difficult challenges faced by major organisations, big retail, and government departments - and now helps over 250 organisations (including the BBC, Deloitte, British Airways and the NHS) build organisational intelligence with AI. Cont. 

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TOP 32

pupil

AI COMPANIES IN THE UK Dr Ross Upton Ultromics

JAMES D MARSHALL Pupil is a spatial data company that captures and publishes 3D digital twins of real estate on a global scale. Through its technology, Pupil is creating a universal measurement standard that is guaranteed for an accuracy of 99%. It is transforming industries by digitising the world’s interiors with new levels of accuracy and consistency, bringing transparency to real estate markets worldwide.

Pupil, founded in 2015, combines its enterprise software and AI/ML applications to accurately measure its environment, revolutionising the real estate measurement industry.

OKRA.AI DR LOUBNA BOUARFA OKRA delivers predictions, suggestions, and explanations to empower life sciences executives and operational teams to drive the right treatment to the right patient with humanised and understandable AI outputs. Loubna founded OKRA in 2015 with the vision of moving the healthcare industry towards a future of personalised medicine, powered by explainable AI. OKRA’s solutions have been validated and deployed for leading pharmaceutical companies covering a range of use cases, including sales force effectiveness, field medical analytics, clinical trials, and Health Economics and Outcomes Research.

Dr Loubna Bouarfa OKRA.AI

ultromics DR ROSS UPTON Headquartered in Oxfordshire, Ultromics is a global health technology company providing AI solutions that improve heart disease detection and heart failure prediction. The breakthrough technology automates the interpretation of heart ultrasounds using a fully-managed service, giving doctors a report to help them diagnose disease earlier and improve outcomes. The company is helping healthcare professionals reduce missed opportunities, save lives and prevent worsening cardiac outcomes. Introducing Ultromics’ technology could prevent thousands of deaths each year and help to reduce the $40 billion estimated global economic impact cardiovascular disease has on the healthcare industry each year.

decoded KATHRYN PARSONS MBE Decoded is a London-based coding school that has tutored people in businesses worldwide about the inner workings of technologies, such as code, data, cyber security, and AI. Founded on the belief that technology is for everyone, the company are pioneers of transformative digital learning that aims to demystify the digital world and teach people how to collaborate with technology. Its programmes have been designed to tackle the digital knowledge deficit head on and get people ready for the huge societal shifts being brought on by the Fourth Industrial Revolution.

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April/May 2022

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A historic accountancy firm for the modern age

“As the country, and the rest of the world, grapples with continual changes and challenges, Monahans’ ambition is to guide businesses and individuals through any further hurdles with confidence, clarity and commitment.”

Simon Tombs Managing Partner, Monahans

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April/May 2022

Monahans has been proudly serving businesses in the West of England for more than 120 years. From humble beginnings, we’ve grown to eight office locations, including Swindon, Bath, Trowbridge and Taunton, forming alliances with our local business communities as an integral part of their profitability and growth.

The key to our success over the last century has been honouring what Brian Monahan set out to achieve when founding the firm.

By working with our clients as a trusted partner – understanding their needs, providing insights, and supporting them with reassuring professional expertise – we’ve built our reputation as the go-to firm of chartered accountants and business advisers for the region, whilst also expanding our national and international reach.

This commitment to Mr Monahans’ ambitions – and those of our clients – won’t change. But if the last couple of years have taught us anything, it’s that we can’t rest on our laurels.

So, we’ve made some significant changes to our brand to bring it in line with the post-pandemic, digital age.

On 1st April we unveiled a new brand identity and distinctive messaging, aligning Monahans with the evolving needs of our customers. ‘Powering Future Business Growth’ is our raison d’être, and a striking new logo looks towards that future.

A vibrant purple colour palette is designed to stand out from an established sector while also injecting purpose and progression into the brand.

‘Vibrant’ might not be a word you’d usually associate with an accountancy firm, but this visual modernisation shows that we’re not afraid to be bold, and it reaffirms our successes in recent years, despite the turbulence of the broader business world. Indeed, during 2021, the business onboarded 420 new clients, welcomed eight senior members to the team and saw online interest in our services grow ten-fold thanks to our innovative post-pandemic campaign.

8 offices across the South West

180 team members

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Drawing upon the depths of the team’s commercial and specialist insight, our advice hub has enabled Monahans’ network to make informed decisions during a time when uncertainty has been widespread. We wanted this to be a source of learning and development for businesses, and its 500 daily visits and more than 25% growth in social media following show that it has been immensely valuable, allowing customers to focus on growth, rather than survival.

That message of ‘growth’ is key for Monahans as we start this exciting new era for the brand. As the country, and the rest of the world, grapples with continual changes and challenges, Monahans’ ambition is to guide businesses and individuals through any further hurdles with confidence, clarity and commitment.

Part of this evolution sees us joining Prime Global, an award-winning, international association of independent accounting and business advisory firms. In doing so, Monahans aims to grow the business by at least a further 10%, maintaining its reputation of being a collaborative, innovative and trusted business adviser.

Monahans has been by the side of businesses for over a century and, while the past two years have been incredibly turbulent, now is the time to bravely take strides towards a brighter future.

Our new brand signifies, for both Monahans and our clients, an invigorated sense of looking towards that future and the prospects that it brings internally and externally for both staff and clients.

For more information on how Monahans can serve your business, please visit: www.monahans.co.uk.

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FEATURE

The rise of social media over the past decade has been nothing short of monumental, but despite playing a huge role in our everyday lives, it divides opinion over whether it’s always a good or bad thing for business. Here at Business Leader, we investigated the value that social media can give to businesses.

investing (even small amounts) in paid marketing, and creating content that your audience wants to engage with, it can offer tremendous value.

Antony Thompson, CEO and Co-Founder of employee engagement and wellness tool Loopin, highlights one example where social media has proved to be effective.

“But social listening is of huge importance, ensuring that any negativity that could arise is met with a proactive approach.

Even a negative customer service experience can be turned into some positive PR.”

“I believe social media works very well for businesses: Duolingo is a great example of this. It does require control though.”

IS IT GOOD OR BAD FOR BUSINESSES? This is a hugely divisive topic. Whilst social media provides an opportunity for businesses to interact with their customers, market themselves and even sell products and services, lots of companies have experienced huge reputation damage because of negative publicity on social media platforms.

Youssef Darwich, Co-Founder and CEO of investment firm Nosso, believes social media can be good and bad for a business.

According to Anya McKenna, Managing Director of digital marketing agency Hexe Digital, it still offers good value for businesses, but it’s important for them to use it correctly.

“When social media first launched, it offered a real opportunity for smaller brands to reach their audiences on a lower/next to nothing budget, in comparison to the thousands typically involved for out-of-home (OOH) advertising or hundreds of thousands for TV advertising,” says Anya.

“Provided you’re measuring more than likes and followers (aka the vanity metrics), and are tracking conversions,

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He comments: “I think it's a double-edged sword, but it can offer great value for businesses as long as it's used right for a few reasons. The first one being that it can be an extension of customer support.

It gives businesses a real chance to be on the front and show in a public setting how good their support and service is.

Duolingo is a US language-learning website and their resident mascot, Duo the owl, has accumulated more than three million followers on TikTok. This is an excellent indication of the audience that companies can potentially capture with effective use of social media, although it’s worth bearing in mind that loads of followers doesn’t necessarily mean lots of customers for your products and services.

“The second reason is that social media also provides a great opportunity for creating a ‘feel’ of the brand. This doesn't just help you get new customers but can also help you find new employees, etc.

“However, when brands want to be funny, relatable and on-trend, they can fall within the trap of creating cringeworthy content or worse. This is when they can end up causing more damage to their reputation than good. Like all parts of a business, I think it must be taken seriously and invested in if you want to see success.”

April/May 2022

IS SOCIAL MEDIA AT CRISIS POINT? AN AUDIENCE OF MORE THAN FOUR BILLION PEOPLE According to Statista, more than 3.6 billion people around the world were using social media in 2020, and they predict this will increase to 4.41 billion people by 2025.

With so many users, it’s impossible to ignore the potential audience available to businesses. However, with Facebook and Twitter banning certain political organisations, and providing a platform for others to spread hate, big questions are being asked as to whether it is moral for people to continue using social media.

Anya McKenna questions the morality behind social media platforms controlling what people are able to say.

She comments: “Factually, they have done this. Morally? I do not think that one single private organisation should have governing control over free speech, which is what social media is - it’s a platform for people to express their opinions. As more people migrate to the Metaverse, social media platforms will have a huge responsibility to protect its end users from hate crimes, cyber bullying and things that we don’t even know exist yet. Investing further resources into this would be of huge value.”

people. The difficulty being that the business of these companies is people. So, from an ethical standpoint, what we are essentially doing by limiting voices is, in fact, saying the world isn’t a democracy – it’s only the democracy we choose it to be.”

"AS MORE PEOPLE MIGRATE TO THE METAVERSE, SOCIAL MEDIA PLATFORMS WILL HAVE A HUGE RESPONSIBILITY TO PROTECT ITS END USERS FROM HATE CRIMES, CYBER BULLYING AND THINGS THAT WE DON’T EVEN KNOW EXIST YET." Anya McKenna

Regarding people spreading hate over social media, Antony is also divided over whether it’s making us better or worse as human beings.

However, Antony Thompson believes the banning of political organisations needs to be looked at from multiple perspectives.

“This is an incredibly difficult thing to measure,” continues Antony. “I would say it brings so much good to the world, but it may indeed highlight the areas where it isn’t.

I think where we may not be getting this right are the algorithms, which encourage polarisation.”

He says: “I believe this question requires two lenses of focus: one being an ethical lens, the other a business lens. Ultimately, these are companies that are ungoverned by

For those that may not know, algorithms are how social media platforms sort posts in a user’s feed based on their relevance to that user.

Cont. 

Business Leader - Inspire • Inform • Connect

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So, if you’re someone who engages with lots of right-wing political videos, for example, right-wing political content will be increasingly likely to pop up in your feed.

A NECESSARY EVIL? Statista says the average amount of time someone spends on social media per day is two hours and 25 minutes, which equates to more than 17 hours a week. So, with social media taking up such a huge amount of people’s time, even if you object on a moral level, can you afford not to be on Instagram, Twitter or any of the other major platforms?

Youssef Darwich believes you can’t.

“Nowadays, if you don’t have an online presence, you don’t exist,” says Youssef.

“Social media is the space where everyone is at, and you want to make sure to be on whatever platform your audience is on. Yes, it carries more risk when you're building your brand on someone else's product, but I think there isn't really another option. Just make sure you understand what you can and can't do/say on each platform and ensure you're trying to keep up-to-date with developments to make sure your content remains popular on those platforms.”

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April/May 2022

IS SOCIAL MEDIA AT CRISIS POINT?

WHAT’S NEXT FOR SOCIAL MEDIA? As the number of people using social media continues to increase, many will be wondering where the platforms will go next.

Is there further room for them to develop?

Recent developments such as the Metaverse, a 3D virtual world facilitated by the use of augmented and virtual reality, suggest that social media could continue to develop as other technologies do.

According to Youssef Darwich, a prime example of social media’s continued evolution is TikTok. He says: “There are so many things that we can’t predict, and social media keeps evolving. Each platform has a different appeal. Communities within different niches are growing strong within every single platform, and the space keeps evolving and catering to the different user’s needs. You just need to look at how brands have used TikTok over the last couple of years to see there is still so much more room for platforms to develop.”

Anya McKenna concurs.

She comments: “Social media will continue to evolve as long as technology does. So, indefinitely, I guess. Alexander Graham Bell probably never envisaged

seeing the person on the other end of the telephone whilst chatting!"

Antony Thompson believes we have a long way to go before the full value on offer from social media is realised.

“In my honest opinion, we haven’t even begun to fully comprehend the level of value a social platform can bring.

The issue we face today is that of globalisation, whereby we are infinitely more connected, but because of volume, these connections are often shallower and less meaningful. We have the opportunity for a new form of social platform to connect those much smaller communities – to enrich trust and deepen the connections within.”

Business Leader - Inspire • Inform • Connect

Whilst social media certainly has its downsides, it’s impossible to deny its potential benefits, especially when technology continues to provide social media platforms with chances to evolve.

Taking advantage of technological innovation could keep your business ahead of the curve, but if you do decide to become part of the hype, make sure you consider your actions on social media carefully. 

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INTERVIEW

‘the opportunities are there for the taking’ business leader talks to matt hancock mp

Business Leader recently paid a visit to Matt Hancock MP to get his views on all things business. Best known for his role as Health Secretary during the pandemic, Matt also says he is looking to come back to his roots in business – having previously worked at the Bank of England and seeing first-hand his parents’ experience of the ups and downs of running a company. In the interview, Matt talks about the work he is doing around dyslexia, FinTech and cryptocurrency; and the headwinds hitting the UK economy.

FIRSTLY, FOR THOSE THAT MAY NOT KNOW YOU, CAN YOU TELL US ABOUT YOURSELF? I am the MP for West Suffolk, and most people will know me because of my role as the former Health Secretary. Before politics, I was in business and economics, having played a role in my family’s small business that nearly went bust because of a client not paying their bills. This is what got me interested in business and how it works – how can a good company be affected like this?

I have also worked for the Bank of England.

YOU’RE DYSLEXIC AND YOU HAVE BEEN DOING A LOT OF WORK AROUND THIS. COULD YOU TELL US ABOUT THIS WORK? I only discovered I was dyslexic when I got to university, and it was a lightbulb moment because my tutor said to me ‘you can talk the talk, but you can’t write well enough’. I was assessed and diagnosed, and it explained a lot of things to me because I had found English, and all languages actually, very difficult. Now, I want to make sure that people can identify if they are dyslexic quicker and get the support they need because there is no need to feel inadequate or stupid.

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April/May 2022

MATT HANCOCK MP

"FOR MOST PEOPLE, IF THEY DON’T GET THE SUPPORT THEY NEED AT SCHOOL, THEY DON’T END UP HAVING GOOD OUTCOMES. THE STATISTICS SHOW THAT AROUND 40% OF BUSINESS OWNERS (THAT HAVE A COMPANY WORTH OVER £1M) ARE DYSLEXIC."

EXPERIENCE SHOWS THAT SOMEBODY THAT IS DYSLEXIC MIGHT BE AN ASSET TO A BUSINESS THOUGH? That is true because the skills that dyslexic people over-index in are ones that are very important, such as creativity, problemsolving and lateral thinking. This is valuable to businesses, and they are traits found in many entrepreneurs too.

There are organisations that have long been recruiting for these types of skillsets, like GCHQ. MANY SUCCESSFUL BUSINESS LEADERS DIDN’T DO WELL AT SCHOOL, BUT STATE EDUCATION HAS BEEN CRITICISED FOR NOT FOCUSING ENOUGH ON BUSINESS-FOCUSED SKILLS AND HELPING THOSE THAT ARE DIFFERENT. DOES MORE NEED TO BE DONE? There are people who don’t think in the same way as others. They need more support to get a good education because the people who end up as successful business leaders, who haven’t had a good experience at school, are the exception.

For most people, if they don’t get the support they need at school, they don’t end up having good outcomes. The statistics show that around 40% of business owners (that have a company worth over £1m) are dyslexic. But in our prisons, more than half of prisoners are dyslexic. If you compare this to the population, where around 10% of people are dyslexic, it shows it can go both ways for somebody with this condition.

SO, DO YOU THINK THE EDUCATION SYSTEM IS TOO RIGID BECAUSE THE SET CURRICULUM DOESN’T WORK FOR EVERYBODY, AS WE’VE DISCUSSED? You must be careful not to throw the baby out with the bathwater, because having strong English and Maths skills can be the foundation to a successful career. The research also shows that good phonics-based teaching of a language, whether you’re dyslexic or not, is important too.

The issue we have is the failure to identify quicker that some people may need extra support and perhaps we also need more flexibility too. But I’m not one of those people who would like a free-for-all in education. I believe it is important that teachers and the education systems follow the science but are also sensitive to everyone’s strengths and weaknesses.

Then there’s a broader question about teaching business skills, such as teaching financial literacy and communication, to make sure that people are ready for the workplace.

YOU MENTIONED YOUR BACKGROUND AT THE BANK OF ENGLAND. WHAT IS YOUR PROGNOSIS FOR THE UK ECONOMY? My worry in the short-term is that the labour market is very tight, and inflation is rising faster than it has done for several decades, so the macro-economic short-term picture is a balancing act. In the medium to long-term though, I am very optimistic because if we get these judgements right, and we have recently seen the removal of all Covid restrictions, the prognosis for the UK economy is very good.

Listen to the interview here

HOW CONCERNED ARE YOU ABOUT RISING INFLATION? With inflation running at the highest level it’s been in decades, this is putting a cost-of-living pressure on families.

Cont. 

Business Leader - Inspire • Inform • Connect

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INTERVIEW What you don’t want to do though, is put in place responses that are themselves inflationary, like a loosening of fiscal policy.

So, there is a real short-term set of risks around the economy and people’s lives. That’s my biggest worry for businesses and the economy in 2022, but I think the medium to long-term opportunities are there for the taking.

CAN MORE BE DONE TO HELP WITH THE ISSUES BUSINESSES HAVE AROUND FINDING THE TALENT THEY NEED? Yeah, I think it’s important that we make sure that in all learning environments, the work is being done to help people get on in the workplace and ‘skill-up’. This is obvious, but it’s even more important now because the shortages are unbelievable.

What I would add though, is that it’s a better problem for society than the problem of unemployment. I think most people are surprised that we came out of the pandemic with a problem of labour shortage, rather than the problem of unemployment.

YOU HAVE BEEN TALKING A LOT LATELY ABOUT CRYPTO – WHY HAVE YOU BEEN DOING THAT? The reason that I’ve been speaking out on crypto is because I think it’s incredibly important that as a country, we are open and liberal to innovative new assets. Of course, there’s a need for a regulatory regime (for example, on anti-money laundering) and it’s vital that we put that in place, but we need to do it in a way that encourages investment, encourages growth, and encourages the industry to be based here because it’s going to happen, and our choice is whether we benefit from it happening or not.

It’s too easy for the political debate to be about looking at new innovations and thinking ‘how can we stop that?’ I think it’s very important that we also have voices that are saying ‘let us seize the opportunities of these new innovations’ and make sure that the regulator and government response is to embrace FinTech and crypto, whilst ensuring it is as safe as possible.

MATT HANCOCK MP shouldn’t be going into. I think that the job of the system and the regulator is to make sure there is an open framework with transparency and that advertising rules are met.

WHAT IS YOUR MESSAGE TO INVESTORS WHO WILL BE LOOKING AT THE UK? We have a real chance over the next few years to strengthen the ecosystem and to improve and liberate our regulatory structures.

We can see others really piling into the UK in terms of investment.

When I was first working on policy in this area over a decade ago, the big question was about start-up funding and about companies looking to list accessing the funding they require.

Now, these spaces have increasing amounts of funding available and the scale-up space in the UK is a real success too. This all makes the UK ecosystem much, much stronger than many other countries.

There are unprecedented amounts of capital available to businesses but could this result in a consequence of companies not achieving product market fit and raising for raising’s sake?

Well, having the level of capital available that we do have is a nice problem to have. You need to be cognisant of it, but it is one hundred times better than not having enough capital available.

It’s a bit like a skills shortage being better than an unemployment problem. Yes, you’ve got to address the challenges in that space, but I’m not actually sure there’s that much that the government can do about people’s choices of when to exit or raise money.

There are lots of people who say ‘too many people exit too early and exit into American hands’, but all the government can do is ensure there are investment opportunities available and that the market is working effectively. We also need to make life easier to list on public markets, if you want to go down that route here, rather than having to go to another country. 

DO YOU THINK THAT CRYPTO MIGHT DEMOCRATISE INVESTING? I believe there is a financial inclusion aspect to this, and I want people to be able to access investments that might perform well. And it is the ‘might’ that is important. People can understand risk. We shouldn’t be patronising about their ability to understand it because you should always invest no more than you can afford to, but we shouldn’t say that just because you’re not a high net-worth individual, you can’t invest in high-risk assets.

That’s always been the approach that we’ve taken to publicly-traded equities, but less and less equity as a proportion is publicly traded because we have put more and more regulations and requirements on listing.

I’m glad to see some steps in the right direction in that space; this is about empowering people to have access to investments. It isn’t for me, as a politician, to say what investments you should and

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April/May 2022

KEEPING YOUR BUSINESS IN THE

PINK WHILST GOING GREEN

Don’t be neutral when it comes to sustainability. Be carbon neutral.

Albert Goodman has pledged to be net zero by the year 2030.

Simply thinking about environmental and social governance is no longer an option; individuals, businesses and consumers are making big changes to ensure that their actions are fair and their impact on the environment is nothing less than neutral.

Albert Goodman can keep your business in the pink, whilst going green.

We are with you wherever you are, on your sustainability journey.

albertgoodman.co.uk Business Leader - Inspire • Inform • Connect

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