Startups Weekly Round Up: 20 March

Welcome to Startups’ Weekly Round Up, where we bring you the latest headlines affecting UK SMEs.

The highlights this week:

• SMEs react to the Spring Statement
• Packfleet and Legislate announce big wins and collaborations
• Is the tech sector facing a brain drain?
• Job seeker confidence is (surprisingly) high

Some Stats to Start Up your week

• 1 in 6 SMEs in the UK have £1,000 or less saved up to help them stay afloat during a revenue downturn.
• 2022 saw the highest number of businesses incorporated in a year since records began, with April being the most popular time to start a business (79,120).
• 54% of businesses say the cost of energy is the single greatest threat in 2023.
• Last year marked the highest number of strike actions by workers since 1989.

11 Downing Street and the UK economy: what should startups know?

💪 Tough recession but optimistic workers → new research shows job seeker confidence is higher than during the Financial Crash in 2008. Employees and jobseekers remain surprisingly optimistic about their job security and career progression prospects despite an impending recession this year. According to the Jobs Confidence Index (JCI), in Q4 of 2022, the JCI was 19.9, up 58.1 points from Q2 in 2009. Matt Weston, Senior Managing Director UK & Ireland at Robert Half said, “The fact that our data reveals that employees are confident about both their job security and job search and progression prospects suggests that we are going to experience an atypical downturn.”

🧠 Is the tech sector heading for a brain drain? → the technology sector is heading for increased candidate movement. It seems 52% of tech professionals plan to look for a new role in the first half of 2023 and 83% of candidates say they are likely to look for a new role by the end of 2023. Tech companies of all sizes should recognise the demand there is in the sector for flexible working – 55% of tech workers said they would prefer to be fully remote on a permanent basis. Darren Topping, Director of Solutions & Insight at Lorien commented, “Knowing what’s driving these career moves and what candidates want is going to be a key to the strength of an organisation’s tech talent strategy for 2023 and beyond.”

😟 The UK stock market is biting its nails → the UK stock market could see more pressure as traders become increasingly nervous about the health of the financial sector following the rescue of Silicon Valley Bank by HSBC. Investors remain concerned about potential spillovers to other areas of the market and new failures. It remains to be seen how central banks will react to the current confidence crisis in the banking sector and whether their interest rate decisions will lead to a calmer market.

Startups 100 Triumphs

⚖️ Legislate → the Startups 100 2023 alumnus has added $3.6M in funding in a round led by Parkwalk Advisors, participation from Oxford Capital, and several high-profile angel investors. Legislate provides companies with ontologies of legal terms, allowing anyone in the business to semantically search for information across an entire database of contracts. Legislate will use the funds to double down on UK sales and prepare for international expansion in 2023.

📦 Packfleet → Packfleet will provide pollution-free delivery for designer rental platform, HURR. The collaboration aims to tackle the forgotten fashion sustainability issue – delivery. All of the fashion platform’s orders within the M25 will be delivered by Packfleet, with the courier handling thousands of items from fashion brands and stores like Selfridges, Flannels, and John Lewis. Aside from operating a completely electric van fleet, Packfleet is a certified Bcorp and plants a tree with every new delivery via Ecologi. Both businesses in the partnership have had a successful year. Packfleet saw 10x growth last year, whilst HURR saw revenues up 700% in 2022.

Tristan Thomas, CEO and co-founder of Packfleet, said, “It doesn’t make sense to shout about reducing carbon if that doesn’t also apply to the wider supply chain.” Thomas added, “We’re pleased to be working alongside a brand that has a similar mindset when it comes to sustainable and ethical business.”

Spring Statement – What did SMEs think?

After the Chancellor made his Spring Statement last week outlining the budget, SMEs have felt underwhelmed. Some policies have warranted optimism like the announcement of 12 entrepreneurial ‘investment zones’ and the pro-parent childcare support policy. Despite some promise, plenty in the startup sector have responded with reservation.

Emma Jones CBE, Enterprise Nation founder said, “While small firms are busy creating the jobs, the news that returning mothers and returnships for the over 50s may help them fill their vacancies will be welcome – but no amount of tax tinkering can make up for the incremental rise in Corporation Tax that hits well before £250K in profits and effective slash in their incomes especially when energy costs are still so high.”

Alan Thomas, UK CEO at insurance provider Simply Business, echoed a similar wary sentiment. “While important measures have been put in place, such as an increase in the Annual Investment Allowance to £1m and offering great support in terms of childcare provisions, the fear remains that these new measures will only scratch the surface.” Thomas added that whilst the 3-month continuation of the Energy Price Guarantee will be welcome, SMEs will be nervous to know what comes after that.