When Plexal launched LORCA (which runs a cyber accelerator) in 2017, we were was tasked by the Department for Digital, Culture, Media & sport with raising £40m over three years. Today, we’re pleased to announce that LORCA members have raised £153m – 380% of the original target and 12 months ahead of schedule. This accounts for 76% of the funds raised by all cyber security businesses participating in government scaleup programmes and 69% of all cyber investment raised in the UK since the country went into lockdown.
Investment into LORCA companies has primarily come from UK-based venture capital investment firms. The most active investors into our cohort companies are IQ Capital Fund, 24Haymarket and Octopus Ventures.
Businesses that have gone through our accelerator have also generated £26.5m in revenue over the last two years and are set to create 800 jobs by 2022.
This milestone announcement comes at a time when UK cybersecurity is emerging as a growth success story during the global health pandemic. Research from Plexal and Beauhurst shows that cyber startups have raised £126m since the country went into lockdown, reporting only one fewer deal than in the same timeframe last year. This follows a record year for British cyber investment in 2019, when startups raised more than £500m for the first time.
And to mark our second anniversary, Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport is today visiting LORCA’s London HQ at Plexal to meet innovators from the programme. He said: “Good cyber security is the bedrock of our digital economy – giving people the confidence to shop, work and play online and keeping businesses safe from cyber crime.
“London Tech Week is a fitting time to mark the government’s investment in LORCA, as its network of cutting-edge UK startups smashes investment targets and creates jobs across the country.”
LORCA has supported 72 startups and scaleups over the past two years (including our current fourth and fifth cohorts). This includes innovation and commercialisation consultancy, product development and access to industry through a curriculum designed by Plexal’s innovation team, with support from the Centre for Secure Information Technologies at Queen’s University Belfast and Deloitte.
Our members in include Privitar, one of the UK’s fastest growing startups that was also named as the ninth fastest growing technology company in the Deloitte UK Technology Fast 50 in 2019.
And while our members have been using LORCA as their London base, 36% of them are actually based outside London and an additional 22% were previously based outside the UK. Our cohort companies are based in some of the fastest growing cyber clusters outside London, including Belfast, Cheltenham, Manchester and Edinburgh – all of which feature in the top 10 local authorities for cyber startups in the country according to the inaugural LORCA Report.
Commenting on our second anniversary and the success of our members, Saj Huq, LORCA’s director, said: “Never before has cybersecurity been of such economic and strategic national importance. In the context of the global health pandemic, the UK’s cyber entrepreneurs have continued to drive job creation, attract investment and consolidate the country’s position as a global hub for cybersecurity innovation.
“Breaking the milestone of raising £153m in just two years is testament to the quality and potential of the cyber startup ecosystem that exists across the UK and the centrality of it to the UK’s long-term prosperity.”
Louise Cushnahan, head of innovation at CSIT, added: “The diverse range of startups and scaleups that have taken part in LORCA presented a rich opportunity to deliver further economic, technological and societal outcomes for CSIT’s cutting edge research and innovation in the area of Secure Connected Intelligence and it’s fantastic to see the investment and employment opportunities that these companies have generated.”
Stephen Wray, director of cyber risk services at Deloitte, also said: “Refining emerging market challenges has been central to LORCA and we are delighted to see the impact of our market-led innovators. Reaching this milestone of collective investment in just two years shows the scale of the journey ahead and we look forward to supporting the continued growth of the UK cyber ecosystem.”