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The UK economy, markets and business landscape continue to be dominated by two large forces at the start of 2021 – Brexit and COVID-19. Yet amidst the uncertainty, there are many reasons for investors to be excited about the growth potential of many UK businesses over the next 12 months. In this article, our team at Bure Valley Group identifies some of the key, exciting opportunities which may present themselves to investors in the coming months.
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Safety Equipment & Supplies Wholesaling
Naturally, the world turned itself to PPE (personal protective equipment) in 2020 as healthcare workers manned the frontline against the pandemic. This drove a surge in demand for safety equipment and supplies, following an already-rising demand as health and safety regulations in the workplace have tightened over the last ten years. As the UK rolls out its vaccination scheme across 2021, there are good reasons to expect this growth and business confidence to continue.
CRM System Providers
Most businesses are reliant on customer relationship management (CRM) systems to maintain, manage and grow their customer/client bases. As companies continue to move more tasks and functions online – spurred further by home working due to repeated lockdowns – CRM providers in the UK are well-positioned for further growth in 2021. Companies of note to watch would be the likes of Oracle, SAP and Salesforce UK.
Food ordering & delivery platforms
As restaurants, cafes and hospitality venues have been forced to close their doors to customers over the last 10 months, consumers have increasingly turned to food delivery services when the urge has stricken for a non-home cooked meal. This has put food platforms – both aggregators and new delivery platforms – in a strong position to facilitate this trend. Even if 2021 transpires in the best possible scenario, with COVID-19 defeated by the new vaccines, many restaurants and cafes will be seeking to “future proof” their businesses from future pandemics by improving their online offering. In this respect, platforms such as Deliveroo and UberEats are well positioned to benefit, as might newer entrants such as Roofoods and Feast HQ.
E-based language learning
With more people stuck at home during the pandemic – many with more time on their hands – it is perhaps inevitable that individuals have been turning to pursue “bucket list” items. Learning a new language is commonly at the top of such lists. Software developers have, at the same time, been developing impressive advancements in technology to make this possible for people to do at home through an internet connection – such as speech-recognition functionality and online practice sessions with native speakers. Some interesting players to watch in this space in 2021 include Busuu Ltd, Memrise Ltd, Lingumi Ltd and Lirica Ltd.
Peer-to-Peer (P2P) lending platforms
The expansion of online P2P platforms over the last 15 years has been an exciting development for investors of all stripes, enabling increasing numbers of people to invest in promising startups which offer attractive returns through the power of the internet. The expansion of P2P lending platforms seems to be stabilising as the first wave of industry entrants slows. Over 2020, many investors were concerned as P2P platforms stopped accepting new credit lending. Yet many of these players have adapted well to the challenges of the pandemic.
Funding Circle, for instance, turned its attention to supporting the government’s Coronavirus Business Interruption Loan Scheme, offering loans of between £50,001 to £250,000. As 2021 progresses, moreover, many of these firms could benefit from the UK’s ballooning national savings rate. Households, which have typically spent less during lockdown months, may turn their attention to the higher returns on offer from P2P platforms – especially now that interest rates on savings accounts are so dismally low. Players to watch in the months ahead include Funding Circle, Zopa and Retail Money Market.
Infrastructure and construction
Across the western world, governments appear poised to engage in large-scale infrastructure spending. UK prime minister Boris Johnson has made public pledges to place this at the centre of his recovery plan for the UK over the long-term, promising to bring forward £5bn in capital investment for new hospitals, schools and roads. This, of course, is good news for construction businesses in the UK – many of which faced painful decisions about job costs and closures in 2020 (e.g. Kier and Costain). Interesting players to watch include the likes of Glencar, which saw an impressive 2020 by bringing in £144m revenue – up from £22m in the previous year – by focusing its efforts on warehouses, logistics sites and other large spacious, easier-to-control environments which are more compatible with a socially-distanced world.
Conclusion & invitation
Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:
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