Here’s Why the Tech Scene in the UK is Disappearing into Private Hands

Here’s Why the Tech Scene in the UK is Disappearing into Private Hands

The UK tech sector appears to be disappearing. Research has been done and it has shown that it is now transferring to private hands. A number of companies have been quoted as saying that private money is now snapping up any undervalued cash businesses. Businesses are also struggling to stay afloat and when you look at things from this point of view, you will soon find that it’s a tough situation to say the least. Take a look at Thoma Bravo for example. They happened to buy out the cybersecurity specialist known as Sophos.

The UK Tech Scene is Growing

Even though more and more businesses are starting up and being sold to private hands, that doesn’t mean that the market is taking a downward turn. In fact, things are now moving forward more than ever before. Businesses are experiencing more and more success, and this is especially the case when you look at the casino industry. Online casinos are now opening up across the world and this is because there is a demand. People would much prefer to go online rather than venture down to their local traditional casino. Sure, this is just one example, but it really does show how far things have come in recent years, and it also shows that the tech market is growing more than ever before.

Stock Market

As mentioned above, there has been a lot of growth in the tech industry. That being said, things aren’t so evident on the stock market. Only last week, a UK business known as Sophos departed the public market in favour of private capital. They were bought out by a US private equity firm and this is showing a shift in the balance of power. Things like this have been going on for over a decade and it’s not just the UK that is suffering. European investors are also buying out diminishing options. Brands such as Misys, CSR, Logica and more have all departed from the FTSE index and this is especially the case when you look at the biggest 250 companies in the UK. The 2016 sale of Arm Holdings is quite possibly the biggest tech movement to date. They were sold to SoftBank in Japan in an attempt to gain private equity. With this, they could then pick off tons of other smaller businesses.

Of course, it looks like things are changing but could it end up being a good thing? Only time will tell but so far it looks as though the tech industry is in fact thriving. The problem is that there seems to be a success cap. Businesses need to sell to private equity firms in order to break through and achieve a good return, and if this carries on, there is no telling how things could look in the future. That being said, it’s certainly an interesting point to think about and it’s exciting to see how things could be developing for the industry.