Latest news with #Antavo
Business Mayor
23-04-2025
- Business
- Business Mayor
How to Help UK Start-ups Flourish
You're reading Entrepreneur United Kingdom, an international franchise of Entrepreneur Media. Kecsmar, who has experienced firsthand the struggles and triumphs of building a tech startup in the UK, offers a sharp critique of the current support available for early-stage ventures. Despite initiatives such as the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and R&D tax credits, UK startups face growing barriers to success. Funding: A persistent hurdle} For Kecsmar, one of the most pressing issues facing startups is access to funding. 'Funding remains a major challenge, with early-stage investment becoming harder to secure,' he says. The numbers support his claim: in 2024, just €16.5bn was invested in UK startups, the lowest since 2018, and much of that went to later-stage companies. The implication is clear: the funding ecosystem in the UK is increasingly skewed toward scaleups, leaving early-stage startups struggling for attention and resources. 'This suggests we're going backwards in the UK in this regard,' Kecsmar notes. This funding gap must be addressed to allow more startups to reach maturity. The government could play a crucial role here. Kecsmar proposes partnerships with major tech firms to offer discounted cloud services and AI tools to startups – critical resources for companies in their infancy. Beyond this, tax credits for office space and transport could lower operational costs, easing the financial burden on early-stage businesses. The benefits of government programs Despite the challenges, Kecsmar remains a strong advocate for the government's existing support mechanisms, particularly the R&D tax credit program. 'Government programs like R&D tax credits have been invaluable for Antavo,' Kecsmar explains. These credits have allowed Antavo to fund its innovation team, Antavo Labs, which is central to the company's development of cutting-edge loyalty technology. The R&D tax credit has allowed Kecsmar's team to experiment with new ideas without the constant pressure of financial constraints. 'By reducing the financial burden of innovation, these credits have allowed us to stay ahead of the curve,' Kecsmar says. 'They've been key to accelerating our product development and growth.' However, Kecsmar is quick to point out that these programs need to be more widely available and targeted at the very startups that need them the most. If the UK is to remain competitive, investment in R&D, particularly in emerging technologies, should be increased. What can be done to help start-ups grow? Despite the successes of existing programs, Kecsmar is not convinced that the current climate is conducive to fast startup growth. The funding shortfall is just one part of the equation. 'We need a more founder-friendly ecosystem,' he insists. The current system, he argues, makes it difficult for startups to access the funding, talent, and support they need to thrive. The UK must also be more open in terms of talent acquisition. Since Brexit, the movement of skilled workers has been hampered, creating a talent deficit in many sectors. For Kecsmar, solving this issue is critical. 'Making it easier for skilled workers to move to the UK would be a game-changer,' he says. Allowing greater flexibility in hiring and immigration would provide startups with access to a global pool of talent, something that is especially crucial in the fast-moving tech sector. A call for regulatory reform Beyond funding and talent, Kecsmar highlights the need for regulatory reform. He argues that blanket regulations, particularly in fast-developing fields such as AI, could stifle innovation. 'We need reduced AI regulations for startups only, up to a certain size,' he explains. Kecsmar emphasizes that these regulations should still include ethical guidelines and oversight, but the imposition of heavy rules could prevent small firms from competing effectively with their global counterparts. The UK government, according to Kecsmar, should consider introducing a 'start-up exemption' – a form of regulatory flexibility that would allow smaller businesses to operate under more lenient rules, at least during their early years. Such a move could help level the playing field with startups in the US and China, where tech regulations are often less restrictive. Investing in infrastructure Beyond policy reforms, Kecsmar stresses that the UK must continue investing in technological infrastructure if it is to remain a global leader in innovation. Cuts to tech and AI funding in 2024 – totalling £1.3bn – have raised concerns that the UK risks losing its position as a top destination for startups. 'There's a very real chance that the UK has already lost some top talent to the US,' Kecsmar warns. If the UK is to remain competitive, the government must reverse these cuts and prioritize investment in emerging technologies. Kecsmar also proposes tax incentives to encourage the hiring of apprentices and interns by startups. By reducing National Insurance costs for companies that take on young workers, the government could help alleviate some of the financial pressures faced by small businesses while also addressing the skills gap. Competing on the global stage Startups in the UK are not only competing with each other – they are up against ecosystems in the US, China, and beyond. The government must understand that UK startups are not operating in isolation. As Kecsmar succinctly puts it: 'We need to look at the global stage. Who are startups in the UK competing against, and what are their ecosystems like?' The UK's future as a global hub for innovation depends on how effectively it can compete with these other ecosystems. To do so, the government must make bold moves to improve access to funding, reduce regulatory burdens, and foster a more open and competitive talent pool. The UK has a long history of nurturing entrepreneurial talent, but the landscape is changing. If the government is serious about fostering a thriving startup ecosystem, it must invest more in technological infrastructure, reduce regulatory barriers, and create an environment where talent can flourish. The path forward is clear: better funding, smarter regulation, and a more flexible approach to hiring and innovation will ensure that UK startups remain competitive on the global stage. As Kecsmar concludes, 'A more founder-friendly ecosystem with improved funding access, scalable support, and a more open approach to hiring would help unlock the UK's full entrepreneurial potential.' Only with these changes can the UK remain a leader in the global innovation race.
Forbes
07-04-2025
- Business
- Forbes
Britain's Entrepreneurs Fear Uncertainty More Than A 10% Tariff
Attila Kecsmar CEO of Antavo says the real issue lies in the pace of change It's bad, but just how bad? That's the question a great many U.K. startups and small businesses are asking themselves as the Trump administration's newly minted tariff regime heaves into view. Outside of the steel and automotive industries, the U.K. has got off relatively lightly with a tariff of 10% on goods compared with the 20% imposed on the European Union. Nevertheless, as I sit down to write this piece, the FTSE-100 index is down nearly 4.0 and the Prime Minister is announcing emergency measures to protect the domestic car industry. Amid the panic, small and medium-sized businesses are trying to work out what the sudden change in the world trading order means for them. On the face of it, many will not be affected. Services companies don't fall into the Tariff net - good news for software-focused startups - and for goods shipped directly to consumers from the U.K. to the U.S, there is a threshold at which taxes are applied. As things stand, relatively low-value packages are not subject to charges. What Britain's small businesses are facing, though, is a huge amount of very unwelcome uncertainty, which could affect their ability to trade with the U.S. even if the tariffs themselves are not seen as too onerous. U.K. companies exported £182.6 billion in goods and services to the U.S. in the 12 months leading up to the end of Q3, 2024, according to government figures, so at a macro level, any increase in import charges has the potential to do some real economic damage. However, according to Dr Joseba Martinez of London Business School's Economics Faculty, the overall impact on SMEs is likely to be limited. As he sees it, distance tends to be a deterrent to export activity, and the U.S. market is a long way away. Another factor to consider is that very small companies find exporting too difficult and, thus, concentrate on their domestic markets. 'Putting these two insights together, the direct effect on UK SMEs is likely very small, except perhaps for some super-specialized firms, and those firms can probably pass on the 10% tariff,' says Martinez. That's not to say there won't be some impact, even on companies that trade only in their home markets. As Martinez acknowledges, many will be suppliers to big exporters such as Rolls-Royce or Jaguar Land Rover, so there may well be a lot of companies facing an indirect hit. And of course, the big picture can obscure the experience of businesses that have made a point of exporting their products to the American market. A case in point is Peter Christian, a menswear brand that sells directly to consumers. As Account Manager Robson Ternoth explains, the U.S. market now accounts for 35% of the company's total turnover. As things stand, tariffs won't have a direct impact on the business as an $800 'de minimis' rule allows most packages to make the Atlantic crossing without charges kicking in. But there is, nevertheless, no one knows if that situation will sustain. 'The key issue now is the threat to the de minimis threshold. The exemption is due to be removed for China and Hong Kong on 2nd May, and US officials have stated they will extend this to other tariffed countries once the infrastructure is in place," says Ternoth. 'Even if the UK secures a free trade agreement, many of our garments are manufactured in countries, such as Spain, Italy, Bangladesh, etc, meaning they would still be subject to higher duties under Rules of Origin.' Added to that is a change in sentiment. Ternoth says there have been signs of consumer hesitancy following the start of Donald Trump's second term. Nevertheless, the company plans to grow U.S. orders to 50% of turnover. Ternoth hopes the U.K. government will negotiate the continuation of the de minimis rule. Uncertainty is also facing service sector businesses. Attila Kecsmar is co-founder and CEO of Antavo, an AI-driven loyalty program platform. His company has been making inroads into a U.S. market that now accounts for 20% of new business. 'Our global expansion efforts will continue, with a particular focus on enhancing our footprint in the U.S.,' he says. As a software company, Antavo is not affected by the import charges but Kecsmar sees hazards in the road ahead. 'The real issue for the software sector lies in the pace of change and the chaos emerging from unpredictable and seemingly fast-and-loose tariff policies.' In addition, if the tariffs affect the US economy, customers there could be put under pressure. If U.S. technology companies face higher costs for items such as microprocessors, there could be a benefit for rivals elsewhere in Britain, Europe and elsewhere. Adit Abhyankar is CEO of Breakthrough, a Madrid-based AI sales platform. As the cost of components going into the U.S. rises, he says activities such as model training could move offshore. 'This creates two secondary effects," he argues. 'Comparatively, it becomes cheaper for any AI company to build models using hardware outside the US, so the US risks losing its AI advantage. Why would they want to build a team in the US, if they have to do all the research on infrastructure that is offshore? And Once data is moved outside the US, what does that mean for data security, privacy and complying with US legislation in general?' There is a bigger picture here. If British and European companies can access low tariff components or raw materials, then any disadvantage imposed by U.S. tariffs might be offset by relatively cheapers costs elsewhere in the value chain. Of course, anything could change. The tariffs could be removed, delayed or could also be a global recession. That's why uncertainty remains the biggest problem facing U.K. and European businesses.
