Capita Scaling Partner (CSP) was established in 2018 to unlock the growth potential of some of the most transformative early stage startups in the UK. Backed by Capita PLC, the UK’s largest business services company, we’re able to offer the startups in our portfolio unrivalled access to relationships which can take their business to the next level and importantly take a lot of the risk out of startup investment.
When we assess startups for the portfolio, we focus on three core factors. Firstly, we commit to sign up as a customer where we can –in turn this helps to drive internal innovation by adopting the latest technologies in digital services and also shows that Capita believes in the startup. Second, we provide our startups with amazing access to our network of clients and suppliers which has developed over the last four decades.
With over 9,000 clients and 8,000 suppliers across the vast majority of the biggest companies in the UK, this is a vast opportunity for startups which cannot be replicated by any other form of growth strategy, such as traditional angel, VC or PE funding. It also enables Capita’s clients to benefit from access to vetted, tailored innovation.
The third factor is that we deploy dedicated, full-time employees from the Capita Scaling Partner team within the startup to help unlock opportunities from the partnership and accelerate sales. This is a hands-on relationship that wouldn’t be seen in usual corporate venture models.
How did you come up with the idea for the company?
We were witnessing big changes in the outsourcing market as digital technologies disrupted the business model. We recognised that the Private Equity and Venture Capital firms were early investors in these emerging technologies and we quickly realised that there was a huge mutual benefit in forging partnerships with innovative startups that align to Capita’s business, such as customer experience, learning and development or tech solutions.
Big corporates can sometimes struggle to develop disruptive technologies in-house and acquisitions of early-stage companies can be expensive and risky. This is why there are lots of different types of corporate accelerators and incubators out there in the wider market. We capitalised on the opportunity to bring a more proactive, partnership-based model to the startup community, where Capita demonstrates a level of commitment that we’ve not seen anywhere else before.
In turn, our clients benefit from access to highly innovative solutions from startups, and are able to engage safe in the knowledge that these companies have the support of Capita PLC.
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How has the company evolved during the pandemic?
We recently celebrated the tenth deal in our rapidly expanding portfolio, which is testament to the size of the opportunity that startups recognise in the relationship with CSP.
Throughout 2020 and the first half of this year, the UK has experienced record VC investment in startups, meaning founders face multiple options they have to consider when growing their business. In this same time period, we’ve seen a huge interest from startups who recognise that relationships – particularly with enterprise customers – offer the key to unlock their growth potential, more so than cash injections from funding rounds.
Taking two examples from within our portfolio, talent platform Adepto grew its revenue 600% over the course of our 18-month partnership before being acquired. A staggering 65% of this revenue came through opportunities generated by CSP. In another case, on-demand software engineering firm Distributed increased their run rate revenue by 500% in the first year of working with CSP, with over 80% coming from the Capita network. This led to CSP supporting them through a £4.3m Series A in April this year.
What can we hope to see from Capita Scaling Partner in the future?
Evolution is driven within CSP by a constant evaluation of the most innovative digital technologies which solve the most common and important challenges faced by Capita’s clients.
We’re always looking for the most innovative startups, the most talented founders and businesses which align with our strategic goals and client needs. We also see a growing number of corporates turning to the CSP portfolio as their trusted pool of innovative technologies.
Startups can watch out for our regular pitch days which are vertically focussed. For example, we have one for sustainability firms coming up where we’ll be specifically seeking the latest innovations to address the drive to net zero; bring a fresh approach to reskilling; and have a unique take on community impact initiatives.