Investor backing gives boost to UK start-ups
Number of new IT companies on the rise as a result of improved investment
The number of IT start-ups in the UK has increased in 2004, with a total of £6m in initial funding being raised in the past 18 months.
This multitude of new IT companies, revealed by government-backed entrepreneur support group SETsquared, can be attributed to healthy interest from investors and increased entrepreneurial activities in the past quarter.
The firm said that it was not only the ability to get investor backing that was improving, but also new ventures' ability to win business.
Karen Brooks, regional manager at SETsquared, said there is a "significant increase" in venture capital interest in IT start-ups.
"In general, there is more financing in the market, and if you have products and services that address areas of demand, investors are willing to invest," she said. "We currently work mostly with small IT manufactures, but we will work with any technology firm that offers unique products and services."
The company's director, Nick Smailes, said: "In the past few months we have seen a real increase in activity. But it has not just been about ventures raising funds, [because] many have found it easier to win customers, enter licence agreements and sell consultancy work."
Brooks said security is an area currently receiving attention from investors. "The investments are across the board, but security and web-based application businesses are receiving the most [funding]," she said.
Graham Smee, director at distributor equIP Technology, which recently invested in a new division, said now is a good time to put money into the IT sector. "The market is growing at a faster rate than it has for the past few years and there is confidence," he added.
He said new VARs will undoubtedly appear as market growth continues to pick up speed. "Investment brings new money, new developments and new companies, but resellers will need to specialise to succeed," he said.