Growing Business Awards: one in four entrants looking to raise equity within 12 months

With the GBA entry process now closed - and the shortlist to be announced imminently - one thing is clear: the 146 contestants vying for the several awards up for grabs are not letting the tumultuous macroeconomic climate weaken their resolve.

Analysing the entries, Growing Business Intelligence found that 99% of entrants are confident regarding their trading prospects over the coming 12 months. More than two thirds (70%) are “extremely confident”, with that proportion rising to 77% in the media & marketing sector, and 73% in the technology and recruitment sectors, among others.

That bullishness is no surprise given the high-achieving nature of the cohort that entered the awards. More than 70% of the entrants have grown by more than 30% between 2020 and 2021, and almost a third (32%) doubled their revenues during that period. Taken as a whole, the cohort enjoyed a combined growth rate of 54% year-on-year, rising to 68% when looking at the 2019-2021 period.

The entrants posted a combined 2021 turnover of £2.45bn; more than half (55%) turn over more than £5m, around 10% turn over in excess of £50m, and 84% are profitable.

Just 22% are currently backed by private equity (PE), but this could change soon: a quarter (25%) of non-PE-backed entrants are looking to raise equity in the next 12 months to fund their growth. This proportion rises to 32% for companies already backed by PE. Around 17% of all entrants are looking to raise or refinance debt in the coming year, with that number again rising to 22% for businesses that have received PE investment.

The fact that those looking for finance remain in the minority is perhaps not surprising given that around half (49%) of entrants cite organic growth as their main growth driver - taken in conjunction with the aforementioned growth rates and levels of profitability, this would suggest that they could be content with bootstrapping their expansion for the time being. In addition, a further 19% rely mostly on increased demand to fuel their growth (including 3.5% from non-UK markets). Just 6% expect their growth to be mostly driven by acquisitions , although 18% may be in need of financing as they rely on launching new products/services and/or conquering new markets.

The shortlist for the 2022 Growing Business Awards will be announced on Thursday 21 July - look out for the full breakdown of all the finalists on Growing Business Intelligence in the coming days. To learn more about the research above, please contact gba@realdealsmedia.com