Start-ups and Slow-downs: Delivering growth in a declining market

Investment in UK tech start-ups has increased at record rates as the global economy slows after the coronavirus pandemic. 

Between January and May 2022, British technology companies raised more than £12bn in investment. This record fundraising brought UK start-up investment to the top of the pack, trailing only behind the US, and surpassing Chinese investment for the first time in recent history. Home to more tech start-up unicorns than any country other than the US and China, the UK is experiencing unprecedented growth in its tech sector. 

However, this meteoric rise is set against the backdrop of a post-pandemic economy, and signs of a fall back to earth are imminent. The global market is slowing, and base-rate rises by central banks means loans are increasingly expensive. Many start-ups formed during the pandemic (like grocery delivery services and virtual conferencing platforms) had sky-high valuations but are now fighting to prove their post-pandemic worth. 

Venture capital investment firms, who too raised unprecedented funds during the pandemic, are increasingly skeptical of backing start-ups and unicorns as it becomes more expensive to invest. A now common trend in UK post-pandemic VC is “haircutting”, when start-ups raise at a higher rate than previous rounds of investment but still  receive far less funding than anticipated based on valuation.  


What does this mean for start-ups and VC firms in the UK?

There are now more UK tech start-ups than ever, funded by an extraordinary amount of domestic and international money. But this crowded marketplace is backed by global investors, and overseas markets are experiencing a distinct downturn. So, start-ups must separate themselves from the pack, establishing not only feasibility but also prominence in a populous market.  Meanwhile, VCs must be more selective in their investment while vying for the most viable start-ups (and ensuring that the start-ups they have already funded succeed). 

In both cases, public relations and reputation management can contribute to success. For start-ups, strategic relationship- and identity-building serve to pinpoint their purpose. In the UK, investment in purpose-driven start-ups has increased to $3.5bn in the past decade. Additionally, there is a positive correlation between strategic reputation management and revenue, key to building credibility as start-ups seek VC investment. Media coverage of start-ups has been shown to increase VC investment, performance during IPO, and long-term survival chances. 

For VCs, establishing marketplace security through reputation development is key to succeeding in a post-pandemic economy. Reputable VCs, or VCs that have a strong public presence that reflects the success and trustworthiness of the firm, benefit from less costly and larger fundraising and are more likely to invest in successful start-ups. Reputation and public relations have been found to be more significant indicators of VC success than the age of the firm, its investments, or its connectedness in the market. 

As liquidity tightens, it can seem counterintuitive at first glance to spend valuable cash to fortify reputation and fund or portfolio company profile; however, investment in PR might very well be the difference between success and failure as the market starts to turn.



UK Tech News

New Statesman

Growth Business UK

Journal of PR Research

Corporate Reputation Review

Journal of Financial Economics

Fusion energy: the forever solution?

As an increasing number of countries around the world commit to the phasing out of damaging fossil fuels, fusion energy may just provide the alternative long-term electricity-generation solution humanity urgently needs.

Fusion is the original and oldest source of power – it is the energy source that powers the sun and stars. In fundamental terms, and we implore you to stick with us on this, fusion energy involves the combining of small, light nuclei to form a larger and heavier nucleus – a process which releases bursts of energy.

To achieve the generation of energy through fusion, hydrogen gas must be heated to extreme temperatures. The nuclei in the hydrogen then combine and form helium nuclei, with some of the resulting mass being converted to energy that can be harnessed.

The reaction to create fusion energy is most efficiently performed and controlled in a device known as a tokamak. And only a small amount of hydrogen is needed to provide a huge amount of energy that can then be used to drive turbines and generate electricity.

The advantages of fusion energy are significant: it is a clean, non-polluting source of power that is both affordable and safe. Hydrogen, the fuel for the generation of fusion energy, can be easily extracted from seawater, meaning potential supplies of fusion energy are almost limitless. Successful development and distribution of fusion energy on a global scale could, quite simply, change the way we generate power forever.

And the advent of the age of fusion energy may not be far off. Specialist fusion energy scientists across the world are working at pace to develop the cutting-edge technology and advanced processes required to commercialise fusion energy.

Thanks to global collaboration between scientists and engineers, and recent technological breakthroughs, the emerging fusion energy industry is now nearing the point of being able to scale-up operations to offer at commercial scale.

As demand for electricity continues to increase, and as humanity works towards meeting essential global climate policy goals, it seems likely that fusion power plants will punctuate our landscape soon.

It’s entirely plausible that fusion energy, together with other important renewable energy sources including wind and solar, could solve the world’s clean energy challenge forever.

Unmasking the truth in the face of falsehood and fabrication

Unmasking the truth in the face of falsehood and fabrication

As the war in Ukraine has unfolded, global media channels have been awash with news and updates from conflict territory. Audiences, keen to keep abreast of developments, have had to decide how and where to source reliable information about the conflict – a task made more difficult in a modern world where it is all too easy to spread distorted interpretation of fact with the click of a button.

Hats off to one of our clients, Prevail Partners, which has committed to publishing regular news bulletins containing accurate intelligence on what is happening on the ground in Ukraine. Comprised of security and intelligence experts, and former military personnel, the team at Prevail has unconstrained access to the true details of the conflict.

It has been sharing this information as widely as possible, for free, to counter the mass disinformation being released about the war and to ensure that the true story is told. And the integrity of Prevail’s intelligence is trusted to such an extent that it is relied upon by some of the major mainstream broadcasters.

Prevail Partners’ honourable action got us thinking about just how essential it is that accurate information be made freely available – not just in situations of conflict, but in general. Throughout history, there have been innumerable examples of the truth being skewed in the favour of, and to the advantage of, interested or involved parties. And the dissemination of what was recently coined ‘fake news’ – usually intentionally incorrect, false or misleading news – has only been exacerbated by the advent of social media.

Quite simply, fake news is the enemy of truth. And without access to the truth, informed opinions cannot be developed, decision-making is distorted, difficult situations are made worse, and justice –even lives – may be at stake.

Indeed, the potential damage that can be caused by the spreading of incorrect information is almost infinite, underlining just how important it is that the truth be freely broadcast.

While on a small scale, we advocate that people try to control their potential exposure to fake news through careful selection of their go-to information sources.

It is unquestionable that more needs to be done on a national, international and legal level to discourage, disallow and penalise the spreading of false news. But it’s fantastic to see Prevail using its expertise to do the right thing by the people of Ukraine.