Confidence levels among UK tech startups has fallen over the past three months as Brexit concerns have become more prominent, a recent survey by Studio Graphene has revealed, though business leaders remain bullish on hiring top talent and raising investment. The Tech Tracker survey quizzes over 100 business leaders within early stage, UK-based technology companies each quarter to assess and monitor their confidence levels.
Following the first two iterations of the survey in March and June 2019, more than 100 responses were gathered again in late September.
The Q3 Tech Tracker found 73% of tech startups are ‘confident’ or ‘very confident’ they will increase their turnover in the coming 12 months. This is 7% lower than three months ago. Nevertheless, 79% intend to hire more staff (up 6% quarter-on-quarter) and 66% hope to raise investment (up 7%).
However, Studio Graphene’s research uncovered significant concerns over a potential no deal Brexit. Almost three quarters (73%) of entrepreneurs think a no deal Brexit would be bad for their business. In terms of their preferred outcome, the majority (57%) favour cancelling Brexit and remaining in the EU. Meanwhile, 22% would back a second referendum and 11% would like the UK to exit the EU with a deal agreed – only 8% said they would prefer a no deal Brexit.
More generally, 58% of tech startup leaders said they think Boris Johnson’s tenure as PM will have a negative impact on their business, compared to 18% who think it will be positive.
Elsewhere, the Q3 results found that hiring the right talent remains the biggest challenge facing tech startups in the UK– 66% cited this as an obstacle to growth, which is 12% more than in Q2. This was followed by securing private investment (53%), increasing sales (47%), keeping pace with competitors (27%) and developing new technology (21%).
Ritam Gandhi, Founder and Director of Studio Graphene, said: “While there has been a dip in confidence over the past three months, it’s important to note that the vast majority of tech startups are confident they will grow in the year ahead. What’s more, significant numbers are looking to take on more staff and raise investment, which is positive news for the private sector.
“That said, we cannot ignore the impact Brexit is having on entrepreneurs across the country, more specifically, the threat of a no deal. Business leaders need clarity and certainty over what the future looks like – a no deal Brexit cannot provide this. So, while cancelling Brexit seems unlikely, it’s hugely important Boris Johnson and his cabinet listen to the concerns of UK tech startups, ensuring these businesses are supported and their interests are protected as much as is possible.”