“We started here because the UK is a hub of scientific talent… For me having other companies around us that I can look up to, can learn from, and of course the ecosystem of talent and capital that has led us to grow to where we are today, has been fantastic,” explains Alex Kendall, chief executive of London startup Wayve.
The company, which was founded in 2017, creates autonomous driving technology based on computer vision and machine learning and partners with the likes of Ocado, Asda, and DPD Group for online grocery delivery.
After first trialling driverless cars in central London, it has now extended testing to various UK cities, including Cambridge, Coventry, Leeds, Liverpool, and Manchester.
As it has scaled, Wayve has received investment from the likes of Virgin Group, and last year partnered with Microsoft, with ambitions to deploy autonomy in more than 100 cities, and to take it to markets globally.
Wayve is just one of many startups adopting the spirit of innovation that has helped the UK tech ecosystem become one of the best places to invest in tech within Europe.
In 2021, UK tech captured more than a third of the total investment into Europe at £89.5 billion, with £29.4 billion raised by startups and scale-ups. This figure was double the amount raised in Germany and almost three times that seen by French companies.
It was also another record year for venture capital investment despite the challenges posed by Brexit and COVID. Fast forward to 2023 and many of these UK startups are providing products and services across the globe, with a string of unicorns already household names.
So, what is it that makes the UK so uniquely poised to scale in the tech space?
Building on a rich history of technology
Britain’s rich history of innovation in modern computer science has fuelled many of the contemporary tech innovators of today such as Poppy Gustafsson of Darktrace, Demis Hassabis from Deepmind and Nikolay Storonsky, head of Revolut.
“We started here because the UK is a hub of scientific talent,” says Kendall. “We are standing on top of the shoulders of the giants that’ve come before us. Artificial intelligence was invented here with the work of Alan Turing, and today has some of the best deep-learning research in some of the companies here but also in the universities.”
Britain now has more than 1,300 artificial intelligence (AI) companies, a 600% increase in the number of firms over the last decade, with a collective turnover of almost £1.47 billion.
The UK’s AI research has the third-highest rate of AI publication citations per capita globally, while the Alan Turing Institute has a partnership with 13 of the UK’s most internationally recognised universities carrying out research and development in AI.
Significant growth is predicted over the next ten years, with a further rise in AI, and robotics and autonomous systems (RAS). The total market for UK RAS is expected to be worth £3.5 billion by 2030.
Talent to scale
The UK fosters talent to fuel the tech ecosystem, with universities in the country leading the world in fundamental and applied science. The government is already funding 1,000 PhDs in AI and the same again in scholarships for masters degree conversion courses in AI and data science as part of its digital strategy. It has also introduced High Potential Individual and Scale-up visas so UK businesses can easily recruit from anywhere in the world.
“I’m fortunate enough to be here on a visa,” New Zealand-born Kendall said, who completed his PhD in deep learning, computer vision and robotics at Cambridge University. “In terms of talent, what’s important to me is that we build the most effective team to solve this problem and that doesn’t necessarily come with just picking brilliant individuals, but putting the team together that has the complementary skill sets to succeed.
“That means a whole diverse set of talent from folks that come from universities, that have ideas that challenge the status quo, to people that are seasoned executives and operators from some of best technology companies, to folks with different ideas that come from companies around the world, both startups, scale-ups, big technology, public and private.”
Local solutions; global vision
Huma is a medtech firm that allows doctors to monitor patients remotely through a mobile app that integrates their data into a dashboard for clinicians to monitor. In 2021 it raised $200 million to scale its digital health platform for better care and research, backed by the likes of Bayer, Hitachi, Samsung, Sony Innovation Fund by IGV, Unilever and the PE fund HAT.
Dan Vahdat, chief executive and founder, says that part of Huma’s digital-first solution came from the health infrastructure already implemented in the UK. “The UK has a very patient-first approach. The healthcare is not that commercial, in terms of trying to maximize revenue and money,” notes Vahdat. “Because of that, doctors, compared to some of the health systems in other places, have more authority to innovate and bring new technology.”
This was essential when the COVID-19 pandemic caused hospitals to pivot to digital-first initiatives quickly. “Right before March 2020, we had maybe five to 10 hospital systems working with us, and now three years later, we are 500+, and we have powered thousands of hospitals, 1000 studies and partnered with some of the biggest pharma companies,” says Vahdat. “We are now strategically important to some of those, none of those things were there and were unimaginable three years ago.”
The density of the UK, coupled with its small size, has also made it seamless to trial technology, scale it, and then reimagine it for a global audience. “Imagine every asthma patient can get the same level of asthma care management that [everyone] gets. Everyone in the world – from Africa to the Middle East, from Indonesia to the Bahamas. That is imaginable now.”
Anchoring innovation in a better future
London-based startup Bboxx, which provides access to affordable solar energy for off-grid communities in the developing world, works with university students to tackle energy poverty and the lack of access to essential products and services across Africa. The company has recently expanded into Mali, Ghana, Ivory Coast and Senegal. To effectively scale globally, Mansoor Hamayun, Bboxx’s chief executive, has found it helpful to fund research within UK universities while creating connections with universities abroad to create a talent pipeline designed for explosive growth.
“In the UK, we have two academic partnerships, one with University College London and one with Oxford,” explains Hamayun. “We provide funding in both of those relationships to have Ph.D. students working on the data that we generate. At Oxford, we are working more on batteries and at UCL, it’s more sociology-based, so looking at customer impacts in different ways and forms, from gender to economic, to choices, to consumer preference changes over time.”
This research centre then allows Bboxx to expand outward, working within African countries to create a talent pipeline from local universities to scale quickly. “Our mission is to try to reach every single household that doesn’t have access to electricity,” explains Hamayan. “We are in 11 countries today, and we have a lot to do in those 11 countries.”
In December, the company, along with its partner EDF, secured an €11 million loan managed by Lion’s Head Global Partners Asset Management. It aims to reach more than 100 million people by 2030, developing technology to expand into water pumps, clean cooking solutions and e-mobility.
From the UK’s Department for Business and Trade:
The UK’s Department for Business and Trade brings business and trade together into a single department, with all the levers to unleash the power of British businesses, reform regulation to reduce burdens and unlock Brexit freedoms. Find out more.