Confidence levels among UK tech startups have significantly dropped over the last three months as the fallout from the coronavirus pandemic takes hold, Studio Graphene’s new Tech Tracker survey has revealed.
The quarterly survey polls more than 100 business leaders within early stage UK-based tech companies to assess and monitor their confidence levels, with the latest highlighting the damaging effect COVID-19 is having on smaller and less-established companies.
As little as 32% of respondents said they were ‘confident’ or ‘very confident’ of increasing their turnover in the next 12 months, which is 42% lower than three months ago and down 47% when compared with Q1 2019.
What’s more, the vast majority of entrepreneurs (91%) said they were worried about the impact that COVID-19 will have on their business, with 35% saying that they do not feel their business is well-prepared to withstand the potential fallout.
In terms of plans for potential growth in the coming year, 58% said they intend to hire more staff (down 19% quarter-on-quarter), 60% hope to raise investment (down 7%) and 49% plan to expand into new territories (down 18%).
Almost 70% of respondents admitted to lacking confidence in the UK Government’s ability to support the tech sector through the COVID-19 pandemic.
Ritam Gandhi, founder and director of Studio Graphene, said: “We launched the Tech Trackersurvey 12 months ago to see how tech firms were responding to Brexit and the general pains of growing a business, but everything has been turned upside down; today’s data shows just how damaging coronavirus has been to business confidence.
“This is the biggest challenge many businesses have ever faced, and with smaller reserves and less nascent customer-bases to fall back on, it is understandable that many startups will be concerned about what the coming months will bring.”
However, Gandhi argued that there are still reasons for UK tech startups to be optimistic.
“Startups are also well placed to weather this storm. They are nimble, agile and able to respond to the challenges that arise on a day-by-day basis. What’s more, demand for technology is higher than ever – consumers and businesses need innovative solutions to the problems they are currently facing. So, there are opportunities for those who can pivot and keep pushing forward.”