Blog

Posted: 19 october 2020

The new digital services tax begs two big questions

Laurence Parry, tax partner at Kreston Reeves, on why the new digital services tax begs to very important questions. The Chancellor Philip Hammond announced in his Budget at the end of October the introduction of a new digital services tax. The tax, which will be shaped further in a consultation, will apply to search engines, social media platforms, and online marketplaces and will be levied at 2% of the turnover from those businesses that relate to UK users. The government gives the following examples of businesses that will fall into this new tax: If a social media platform generates revenues from targeting adverts at UK users, the Government will apply a 2% tax to those revenues; If a marketplace generates commission by facilitating a transaction between UK users, the Government will apply a 2% tax to those revenues; If a search engine generates revenues from displaying advertising against the result of key search terms inputted by UK users, the Government will apply a 2% tax to those revenues. This begs the first question – how will the legislation define this? The government obviously knows who it wants to target, but that is not the same as writing it into law. For example, it is intended that the provision of online content and television/broadcasting services will not be in scope. How will the government ensure that Amazon’s income is split to ensure that Amazon Marketplace is caught but Amazon Prime isn’t? The second of our questions is how will the UK government obtain access to this data, when it is by definition held outside of the UK?

Ori Biotech To Use $30M Series A On Cell, Gene Therapy Manufacturing Platform

The London and Woodcliff Lake, New Jersey-based company is developing a platform that closes, automates and standardizes manufacturing for cell and gene therapy developers so they can move their treatments from the pre-clinical process through to scale commercially. The company…

IBM UK’s Chief Medical Officer, Mark Davies to discuss his Point of View - Emerging Smarter: Rethinking Healthcare on Tech Data's Healthcare Ecosystem Webinar

The current crisis has created a watershed moment for the NHS, demanding a reappraisal of how essential services are delivered to the public. Many industries have already made the shift to enabling collaboration and innovation through more agile models of…

Startups Magazine: Female Founders & Women In Tech - 15th October

Join Startups Magazine for an afternoon of inspiration & motivation - there will be a short talks, networking, goodie bags & prizes. This will be a VIRUTAL event, held on Zoom but with a mix of polls, interactions, goody bags…

Ask the Investor with Jai Juneja, Head of Tech Investment from SeekVentures and Kartik Varma, Managing Director of the Barclays Accelerator powered by Techstars

Access to investors is rare, so when you have a chance to pick the brains of some of the best in the business, you shouldn’t pass it up. Jonno Southam, who leads Venture Capital Business Development for Amazon Web Services (AWS), sat down with Kartik Varma, Managing Director of the Barclays Accelerator powered by Techstars, and Jai Juneja, Head of Tech Investments at SeekVentures, to talk about the state of the sector at the 2018 event. The investors said they saw a couple of key themes emerging among startups. First, unbundling the bank – separating functions like mortgages, current accounts, and so on – and, second, large enterprise investments, for example the technology for getting information to investors, such as startups disrupting products like the Bloomberg Terminal. Juneja said many of these startups are focused on disrupting the user experience, but plenty of companies are also applying novel technologies to fintech problems. Distributed ledger technology, such as the blockchain, is being explored in several areas, as are artificial intelligence and machine learning. Both investors said they look closely at a startup’s tech stack. “Architecture is destiny,” said Varma, explaining that early decisions can affect how the company develops and what it is able to do later. This is where cloud technology can preserve flexibility. Often, said Juneja, “our portfolio companies do due diligence” on a potential investment’s tech stack. That’s important because, as anyone who has spent any time in startups knows, new businesses frequently have to ‘pivot’ – to change their approach, as circumstances evolve. Varma said it’s always important to consider how big a pain point a company is solving – is the startup’s solution addressing a big market where the problem is deeply felt. A startup has little chance of success if it isn’t solving a customer’s problem. He said companies often consider ‘product-market fit’ – how well their product addresses the market in question, but they don’t often consider ‘founder-market fit’. In other words, why is this particular founder the right person to change this specific market? Juneja said that for early stage companies he is looking at “problem, team and market” but there’s room for change. With later-stage companies, business models are more of a concern. Asked about how his views on certain trends had changed, he said he is more skeptical of peer-to-peer lending companies than he was a few years ago. Conversely, he has been surprised by the potential of challenger banks and is now more optimistic about their potential. It isn’t just startups that change their ideas as new information comes to light. Investors do, too. Learn more about how AWS can support your fintech startup and register to be the first to hear when registrations for the 2019 AWS FS:Insight open .

Five questions every private equity investor will ask technology businesses

Raising money from private equity investors to fund growth is a well-trodden path for technology businesses, and the key to a securing the deal is preparation, says Jack Clipsham and Haodong Zhang of Kreston Reeves. Here, they share the five key questions every private equity investor will ask a technology business looking for funding. Before approaching any funder, a technology business needs to ask itself one important question: how much is it looking to raise? The answer will determine who might be interested in investing. Companies looking for smaller amounts, typically under £2m, would be best looking towards family offices, high net worth individuals and private funds. Those businesses wanting more substantial amounts are best approaching larger private equity investors with institutional backing. There are a significant number of sources of funding and it is important to pitch to the right providers in terms of both amount and sector specialism. Irrespective of the amount raised, senior management teams can expect to be asked the following five questions: Q1. What are you going to do with the funds? There are three good reasons why would-be funders ask this question. Firstly, to simply make sure the right kind of funding is being sought. Would, for example, debt funding or asset-based lending be more appropriate and less dilutive for shareholders?

COVID-19 & UK Tech SMEs: Demand for tech in the “new normal”

The “new normal” is a term that has been used with increasing regularity over recent months. It refers to the lasting changes COVID-19 will have on people’s day-to-day lives. From social distancing to new health and safety measures, remote working to travel restrictions, exactly what the “new normal” is going to look like will only become clear over time. However, what is already becoming apparent is that demand for technology is going to rise. With people cut adrift from the physical world, digital solutions have already become increasingly important for both consumers and businesses. Zoom stands as a testament to that; unable to meet in person, colleagues, friends, and family turned to technology to keep connected. On its quarterly earnings call webinar in June, the video conferencing tool reported a total revenue of $328.2 million in the three months to 30 April 2020, a 169% increase from the same period last year. Not only have consumers relied on technology for everything from managing their financial affairs to ordering groceries online, but industry sectors that have hitherto not been the most forthcoming in their adoption of tech have suddenly looked to digitise many of their processes. Pubs are now reliant on taking online bookings, barber shops are using contactless payments instead of accepting cash, and cafés have replaced paper loyalty cards with rewards apps; examples can be seen all around us. As a result, the technology sector as a whole – as broad and multifarious as it is – has been one of the few parts of the UK’s private sector to perform well during the immensely difficult coronavirus pandemic. However, as the use of many tech-based services spiked unexpectantly, the businesses delivering them have faced their own unique challenges – most notably in having to scale operations to keep pace with demand.

Rockley Photonics closes $50m growth round

Rockley Photonics, an integrated optics solutions provider has today announced that it has closed an additional $50m of growth funding from leading deep-tech VCs, strategic investors, and institutional funds including Credit Suisse backed SIG-i Capital and Applied Ventures, LLC, the venture capital arm of Applied Materials, Inc., as well as existing shareholders. Formed in 2013, Rockley is led by Dr. Andrew Rickman, the founder of the first commercial silicon photonics company Bookham Technology. To date, Rockley has raised over $225m of financing to develop its unique silicon photonics platform. The Sunday Times also recently recognised Rockley Photonics as one of the ‘top 10 British tech companies to watch’. “It is testament to the strength of our technology and emerging market opportunities that we have attracted such a preeminent list of new investors to join many of our existing shareholders in this funding round,” said Andrew Rickman, chief executive officer, Rockley Photonics. “This round provides the funding for Rockley as it moves into the next exciting growth phase and develops next generation disruptive silicon photonics powered healthcare and wellness sensors and communications products for its Tier-1 customers.”

Employee engagement platform Winningtemp raises €15.1m

Swedish employee engagement startup, Winningtemp has announced its Series B funding round of €15.1M co-led by London’s Frog Capital and Stockholm-based Bonnier Ventures. Having experienced a 300% increase in platform usage during the first three weeks of lockdown, and consistent growth over summer, Winningtemp’s AI and science-based employee engagement platform has become a mainstay for companies attempting to ensure morale is maintained during a time of remote working. Based on more than 600 international scientific studies, the platform helps senior team members visualise employees’ behaviour and development in real-time: providing predictions and recommendations alongside real-time insights and help. Winningtemp is relied upon by 600 companies globally. The startup now has over 100,000 daily users in over 20 countries, and is targeting international expansion, specifically to the United States. In order to maintain this international growth and to capitalise upon the fact that employee morale and efficacy has moved from the preserve of HR departments to being a top priority for CEOs and C- suite executives, this latest funding round was brought forward. “We are experiencing unprecedented demand,” said Pierre Lindmark, CEO, who co-founded Winningtemp in Gothenburg in 2014.

Condense Reality raises £800k seed round

Condense Reality, a virtual reality startup developing technology to transform how viewers watch live entertainment and sports, has raised a seed round of more than £800,000, including £220,000 from SFC Capital, the most active seed-stage investor in the UK. The remaining funds come from two grant awards, together worth almost £500,000, as well as smaller commitments from RLC Ventures and angel investors. The investment will see Condense Reality increase its R&D capabilities and commercialise its technology over the next 12 months. Condense Reality has developed a system for streaming hologram-style 3D “volumetric video” of live events alongside a normal television broadcast, with the potential to bring entertainment and sport to life on the tabletop to complement the on-screen action. BT are working closely with Condense Reality in a DCMS funded project that includes the University of Bristol, The Grid Factory and Salsa Sound on the broadcaster’s 5G Edge XR trial to demonstrate the potential of 5G to deliver more immersive live sport viewing experiences through augmented and virtual reality. Until now, capturing volumetric video – which creates a three-dimensional image that can be viewed by multiple people from different angles – required fixed studios with green screens and hundreds of precisely-calibrated cameras, and it took days to process minutes of content for streaming. Condense Reality has developed a next-generation solution that enables broadcasters and content creators to capture and stream volumetric video in real time, outside the confines of a studio, and with far fewer cameras.

RSGB 2020 Convention – Online

This year’s Convention was on online-only event and streamed live between 08.45 and 17.30 on Saturday, 10 October 2020. There are a range of presentations to enjoy—whether you’re a new or returning licensee, or someone who has enjoyed amateur radio…

Are you ready for an unforgettable night of Virtual Reality and eye-opening experiences exclusive to the 4th International #VRAwards?

This year our partners #AIXR are going virtual, bringing the unique VR driven ceremony to you on the 12th of November! Join the celebrations all from the comfort of your own home via desktop, phone, tablet or virtual reality.…

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