Investors are pouring more funding than ever before into social impact startups while consumers are putting ethical transparency front and centre. Growing tech companies now have a dual obligation from the start: move fast and fix things.
The impact of the UK’s flourishing scaleups will be felt globally — the country has recently reached $1tn in total startup value, making it the third country in the world to do so after the US and China.
And scaling fast usually means more press attention and public scrutiny. In a social climate where hyperscaling companies must retain their core values, what does sustainable scaling look like?
Self-driving cars urged to stay in their lane
Founded in 2014, Oxford University spinout Oxbotica has crammed a few startup life cycles into one. The pioneer in self-driving technology has raised £89m, enlisted 230 employees, provided sensor technology to NASA’s Mars Rover and planned the mass rollout of autonomous vehicles across the UK.
Oxbotica CEO and former managing director at Microsoft Gavin Jackson says preserving the original startup mentality has been “key to retaining agility” as the company grows.
“At Oxbotica we call ourselves learn-it-alls,” he says, echoing Microsoft CEO Satya Nadella’s “growth mindset”. He hammers home the necessity of “codifying values” in the form of leadership principles — at Oxbotica this means “obsessing about customers”, “being humble learners” and “acting with velocity and integrity” among others — to ensure strict alignment of teams and guide difficult decisions.
And this trickles down to their tech. With any driverless vehicle software safety takes immediate priority — customer collaboration is important, but safety levels must be “indistinguishable from perfect” before any beta testing, Jackson says.
They will build their own software, their own vehicles, their own sensor hardware and deliver their own services... With the value limited to just a few actors, innovation will be limited
And with Europe’s autonomous vehicle industry worth a projected $16bn in the next 10 years, parameters for competitive behaviour must be settled now. Jackson criticises scaleups with ambitions to construct a "walled garden", or closed platform. Closed platforms block adjacent products by ensuring software incompatibility — a famous example being Apple’s ruthlessly effective removal of the headphone jack from iPhones in 2016.
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“They will build their own software, their own vehicles, their own sensor hardware and deliver their own services,” Jackson warns: “With the value limited to just a few actors, innovation will be limited.”
As the threat of a monopoly looms, the potential industry figurehead insists that scaling responsibly means creating interoperable products that allow others to thrive.
Fintech takes a crack at the wealth gap
On the same trajectory, fintech GoHenry broke crowdfunding records with its £4m raise in 2016. The mobile banking software capitalises on a cashless world and the rise of online marketplaces, crypto and the creator economy which give young adults access to more income streams than ever.
The app provides children with “money missions” — short financial literacy classes — as well as allows parents to monitor transactions and set daily caps for ATM withdrawals or in-app purchases. A secure Natwest account ensures users are safe from the card freezes that befell payment provider Wirecard’s customers during their insolvency in 2020.
Putting banking in the hands of children poses exploitation risks, but churn doesn’t threaten GoHenry’s business model as they have no interest in retaining customers past the age of 18.
“This is our product and we're focused 100% on financial education.” says founder Louise Hill.
Low financial literacy levels correlate strongly with smaller pensions and less net wealth. Hill says that GoHenry will “shape the behaviours of the future economy”, and could help to close wealth gaps in a continent where women are less financially literate than men in every country.
We're focused 100% on financial education
Since launch, the London-based app’s monthly subscription has garnered 2m customers, which Hill says will allow it to “bridge the financial capability gap” across the world as it expands — proving that keeping your core mission front and centre can lead you to untapped markets.
London-based fintech Your Juno, on a similar mission to “climb the final hill in the trek towards gender equity” raised almost €2m last month from Mustard Seed Maze, RLC, Digital Currency Group and Sie Ventures, alongside a board of predominantly female angel investors.
Capital markets ditch the psychobabble
Some companies go the extra mile to manifest their democratic principles; PrimaryBid, a platform trying to open up access to capital markets — or financial markets that connect buyers and sellers to trade stocks, bonds, currencies and other assets — stays in touch with customer needs by holding regular town halls.
COO and cofounder James Deal explains: “We’re a mission-driven business, so fortunately many of the values we want to demonstrate are also core product enablers.”
Primarybid simplifies the sale of shares at IPO so that they can be snapped up by smaller-time investors as well as legacy institutions, and has helped companies raise $1bn across 200 mostly UK-based transactions so far.
Always directed by the same mantra — fair access to public markets — they are hoping to use the same momentum to disrupt the retail bond market and trade of other asset classes in the near future.
The transition to a wider offering required structural change within the company, and Deal brought in a programme management team to take the pressure off leadership and ensure clarity across departments. This has made PrimaryBid feel “less top-down,” he says, and “encouraged involvement at all levels”.
A crucial part of PrimaryBid’s offering is translating the jargon-filled world of capital markets, empowering individuals to engage on their terms.
“That doesn’t mean ‘dumbing down’. It means making company stories digestible and framed against reference points that resonate,” he says. “Individual participation in our capital markets is a trend that's here to stay.”
Join the 2022 Future Fifty 11.0 cohort
Tech Nation’s free Future Fifty growth programme is a network of the UK’s leading late-stage tech companies.
Its cohort brings promising scaleups together each year for peer-to-peer learning between experienced entrepreneurs and founders, in-depth masterclass sessions run by seasoned coaches and access to legislative experts.
Past Future Fifty scaleups include Monzo, Revolut and Skyscanner; find out more about the programme and apply today.