Healthtech/Coronavirus/News/ Over 1,000 UK startups collapse amid coronavirus September saw the highest number of UK startups failing for 10 years. By Freya Pratty 14 October 2020 Empty Interior Of Modern Design Office Empty Interior Of Modern Design Office \Healthtech The UK startup developing a variant-proof coronavirus vaccine By Maija Palmer 1 April 2021 Healthtech/Coronavirus/News/ Over 1,000 UK startups collapse amid coronavirus September saw the highest number of UK startups failing for 10 years. By Freya Pratty 14 October 2020 The number of startups filing for administration in the UK was at the highest level for 10 years in September, new data from Plexal and Beauhurst shows, as the impact of coronavirus takes its toll on new businesses. Over 1,000 businesses have filed for administration, liquidation or dissolution since lockdown began in the UK in March. In September, 273 companies filed for administration, a 181% month-on-month increase compared to August. The data highlights the delayed impact of the coronavirus pandemic on the economy, the report’s analysts say, with government support schemes artificially holding off problems until September. “The government commendably offered a number of startups a lifeline at the peak of the crisis,” explains Andrew Roughan, managing director of Plexal. “But despite the slowly improving funding picture, we are now starting to see the pent-up effect of the pandemic on UK businesses — in particular early-stage startups.” The increase in failures has been most keenly felt in London, where 388 companies filed for administration, liquidation or dissolution since April. In Scotland, 49% of the filings since April were made in September. In recent years, the number of filings in the country grew naturally as the number of high-growth businesses increased, Henry Whorwood, head of research at Beauhurst explains. The country then started to see a reduction in the number of companies filing, he says, as a result of government initiatives to help small businesses, but this changed when the pandemic hit. The UK has also seen a reduction in investment going into startups — since March, companies have raised £5.4bn, down 18% from 2019. And there’s a clear disparity between mature startups and newly founded ones too. Only £458m has been raised by startups raising investment for the first time in 2020, representing a 55% year-on-year decrease on last year. The health of startups is critical for the country’s economic recovery overall, explains Roughan. “It’s these businesses that will provide the innovation and jobs that will drive the UK’s economic recovery, and they need our urgent support.” Freya Pratty covers news at Sifted. She has previously interned at Bloomberg and tweets from @FPratty Related Articles “The team are seeing a different side of me”: Life as a CFO in a downturn By Isabel Woodford Click here to read more 94% of VC-backed startups are going to survive Covid By Marie Mawad in Paris Click here to read more 22% of fintech jobs at risk from coronavirus — but it could be much worse By Isabel Woodford Click here to read more Most Read 1 \Startup Life UK government to reform ‘equity for visas’ residency application system 2 \Fintech Is Revolut really worth $33bn right now? 3 \Startup Life Techstars unexpectedly pulls out of Sweden mid-programme 4 \Deeptech The other funding gap: it’s not just unicorns that are leaving Europe 5 \Deeptech ‘There’s going to be a bloodbath’ — is generative AI a bubble?