Tussell Tech200 deep-dive: what can we learn?

Tussell Tech200 deep-dive: what can we learn?

Posted by James Piggott on 13 January 2022

It's been a month since we revealed the Tussell Tech200 - a list of the top 200 fastest growing technology companies in the public sector, produced in partnership with techUK.

Over the Christmas period we've been crunching the numbers behind the Tech200's impressive growth figures, to answer the question: what can we learn from their meteoric rise?

Below we've picked out our top findings from our analysis, putting detail behind the Tech200's growth, their composition, achievements and more.

We've also converted these key insights into a downloadable factsheet for ease of reference.

 

Tussell Tech200: the key takeaways

🚀 Nearly £1bn was spent with the Tech200

 

£941 million was spent with the Tech200 in FY2020/21.

While this is impressive in and of itself, this spend represents a 341% increase on what was spent with the same suppliers in the prior financial year (£213m).

What does this mean? 

In the face of the unprecedented demands and difficulties brought by FY 2020/21, the Tech200 heeded the call. Be it through offering innovative solutions to new problems, bagging sizeable new contracts despite their size, or through building out their public sector networks, the Tech200 thrived against a backdrop of uncertainty.

It will be interesting to follow how many Tech200 members successfully capitalised on their high public sector revenue in the last financial year, and retain a place amongst the top growers in FY2021/22. 

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💼 Just under 1/3rd of Tech200 procurement went to SMEs

 

Tech200 SMEs earned 30% - or £281m - of the £941m FY2020/21 total spend.

What does this mean? 

As our 2021 Year in Review report discusses, central government has committed to spending at least £1 in every £3 with SMEs, either directly or indirectly via supply chains.

SME spending amongst the Tech200 seemingly corroborates this commitment. Rather than solely relying on its largest suppliers during the troubles of FY2020/21, the public sector put its trust in smaller suppliers to provide innovative and fresh solutions. So much so, in fact, that 9 of the top 10 Tech200 companies were SMEs.

Here's a breakdown of how some of these high-flying SMEs achieved their impressive growth:

  • Wonde Ltd (Ranked #1, 3917% growth) - a very sizeable chunk of new public spending with EdTech firm Wonde came via their provision of free school meal vouchers during the pandemic, using their platform's school meal assignment functionality. Outside this, Wonde provide a school data management platform.

  • Hyper Talent Solutions Ltd (Ranked #3, 2032% growth) - "Cloud, Digital [and] Technology" provider Hyper Talent Solutions saw a surge in spending from the Cabinet Office, following a £2.92m contract to provide "Cloud support, Workday implementation Oracle, Fusion implementation, SAP implementation and Cloud migration".

  • TPG Services Ltd (Ranked #4, 1998% growth) - rising spend with digital consultants TP Group came from the Ministry of Defence for "professional services"; though the nature of these services is unclear, TP Group were awarded two £90k contracts to "produce and analyse financial information to support an Options Analysis and Business Case for submission".

  • Diegesis Ltd (Ranked #5, 1998% growth) - systems integrators Diegesis saw a large spike in spending from the Office for National Statistics, after being awarded a services contract to "support and maintain ONS's existing Ingres/Actian-X systems".

The large chuck of revenue taken by SMEs among the Tech200 is testament to how sizeable, important public sector work is not the reserve of large, well-established suppliers.

If you're an SME looking to break into the public sector, take a look at our SME guide to doing business with the public sector.


🏥🏫 Edtech & Healthtech account for over half of Tech200 revenue in FY2020/21

 

Of the £941m spent with Tech200 suppliers in FY2020/21, 29% - or £270m - went to Edtech suppliers, while 22% - or £205m - went to Healthtech suppliers, totalling £475m (51%).

The Department for Education accounts for 99% of this Edtech spending, while Oxford University Hospital, the NHS Foundation Trust, and the Department for Health & Social Care made up 25% of Healthtech spend.

At least 28 companies on the Tech200 - or 14% - were Healthtech or healthcare-related, while 5 were explicitly Edtech providers.

What does this mean?

As our first Tech200 overview noted, Edtech and Healthtech soared in demand across the pandemic. New services and products were needed to provide digital recreations of once in-person activities: in this case, education and healthcare.

The top Healthtech provider on the Tech200 was Medefer Ltd (ranked #21, 580% spending growth), whose GP referral software was picked up by numerous NHS Trusts. The Tech200's top Edtech supplier was Wonde Ltd, who, as discussed, were engaged in the distribution of free school meals during the pandemic. Below Wonde in 27th place were Education Software Solutions, who provide a range of academic and library software services.

It will be interesting to see how spending with Edtech and Healthtech firms evolves alongside the pandemic. With the gradual return to in-person activities, will their services still be in as much demand, or has the pandemic caused such a step-change in day-to-day life that their services will become engrained?

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📈 Tech200 grew 10x faster than industry leaders

 

Tech200 suppliers grew 341% over FY2020/21: 15x greater than the 10 largest tech suppliers!

What does this mean?

This figure is testament to just how seismic the Tech200's growth really was.

While the 10 largest tech suppliers grew 5x more in absolute terms (at £5bn), their relative growth of 22% pales in comparison to the 341% average growth of the Tech200.

 

🤝 Larger Tech200 members diversified their client base

 

Finally, we observed that some of the larger Tech200 greatly diversified the number of public sector buyers they worked with.

Three notable examples include: Cancom Managed Services Ltd, who grew their no. of unique public sector buyers from 8 to 13 between FY2020 and FY2021, culminating in a 361% increase in spend revenue (£6.7m to £31.2m); Softwareone UK Ltd, who saw a rise from 30 to 56 clients, and a 277% revenue rise (£11.9m to £45.1m); and Daisy Corporate Services Ltd, who saw a rise from 54 to 87, and a 185% rise (£7.1m to £20.2m).

This strongly indicates that when larger suppliers leverage their already strong public sector presence and connections, they can quickly build new relationships and acquire new business.

On the whole, however, the correlation between the Tech200's growth in spend and diversification of customers isn't strong. Many firms experienced a surge in public spend with only a handful of extra clients. A notable example is Computacentre, whose public revenue jumped from £34m to £294m across the Tech200 period, but whose number of different public buyers hardly changed.

The story of Computacentre - and many others like it - shows that the more public clients you have doesn't necessarily mean a big jump in revenue: consolidating your relationships with a smaller pool of buyers, and acquiring larger and larger business from them, is a tried-and-tested strategy.

 

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Diving into the Tech200 gives hints as to the state of both the public sector tech market, and the public sector as a whole. The strength of Healthtech and Edtech indicates a shift in public priorities, while the success of SMEs demonstrates a growing trust in smaller suppliers to offer vital public services amid unprecedented times.

It won't be until the end of FY2021/22 that we can truly see how many of these trends stuck, or were rather a temporary reaction to the times.

There's lots to learn from the Tech200, and we're only just getting started: watch this space for chats and interviews with some of the Tech200 members, to better understand how they achieved their impressive growth. Subscribe to the Tech200 mailing list to not miss out!

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