Technology companies face challenges when it comes to securing funding
A survey conducted on behalf of RSM UK has revealed that two-thirds (66 percent) of media and technology businesses have found it challenging to access the necessary funding in the United Kingdom over the past six months. Only one-third (33 percent) of the surveyed businesses reported easy access to funds in the UK.
Among those who faced difficulties in accessing funding, 37 percent eventually managed to secure the necessary funds, while 24 percent had to seek funding from overseas sources. Additionally, 5 percent were unable to obtain funding within the UK and have not explored other options.
Furthermore, of the businesses with existing debt, 56 percent now have more debt compared to six months ago. Approximately 52 percent of these businesses are planning to initiate a funding round within the next 12 months, and nearly half (48 percent) anticipate the need for additional debt funding in the coming 6-12 months. This data suggests that companies in this sector are determined to continue raising capital and borrowing, despite the persistently high interest rates.
Helen Brocklebank, office managing partner in Birmingham at RSM UK said: “Despite these funding challenges being felt by media and technology businesses, huge efforts have been made across the West Midlands to enable access to investment and ensure acceleration of the region’s tech innovators, as highlighted by Birmingham Tech Week.
“Collaboration across our Birmingham based universities to create a tech ecosystem, TechWM’s funding of a new start up acceleration programme and the announcement of over 1,000 new tech related jobs from our most dynamic organisations show the commitment to make Birmingham an attractive place to invest and grow new tech companies.”
Ben Bilsland, partner and media and technology industry senior analyst at RSM UK, said: “It’s clear that government have put media and technology at the forefront of their plans for the future of the UK economy. Risk capital and funding underpin an innovative ecosystem, so challenges here should be a key concern.
“Without funding, businesses will struggle to innovate and grow in the UK, putting the Chancellor’s ambitions of becoming a ‘science and technology superpower’ at risk.
“Media and technology businesses aren’t shying away from the rising cost of borrowing and plan to obtain funding in the next year. Our survey indicates they are borrowing more, but prudently. However, government initiatives to open up new forms of funding will be welcomed. The Mansion House Compact is a start, as it’s designed to encourage investment into high growth sectors such as technology.”