“This is a coming of age moment for the UK cyber sector”: Saj Huq’s closing speech at LORCA Live //22.09.20
LORCA’S director closed our week-long cyber conference with a rallying call to the sector to get behind our startups and innovators. Here’s an excerpt of his speech.
Over the last five days, we’ve had Lords, ministers, unicorns, professors, the biggest VCs in Europe, companies with the biggest technology budgets for cyber and fast-growth business founders – all convening to debate, engage and collaborate.
Why did we want to be more ambitious than ever before? Because UK cyber startups have stepped up during the pandemic, providing resilience and security to the technology services that have allowed society to continue operating.
Because cyber startups have never attracted more investment than during the pandemic, and never experienced such potential for growth and success.
And because this is a coming of age moment for the UK cyber sector. The moment when it could stand alongside the biggest international cyber hubs as a truly world-class cyber ecosystem.
Consider this: in the worst economic crisis of our lifetimes, none of the 72 cohort companies within the LORCA programme have failed. Of course they’ve had challenges over the last six months, but every single cyber startup in our programme is alive and well and many have actually closed funding rounds and continued to grow during this period.
They are the future. And they need our continued support.
So anything less than a virtual experience that was bigger, better and further reaching than what we’d done before would have been a disservice to the entrepreneurs driving cyber innovation in 2020.
We’ve also tried to capture the breadth and influence of the cybersecurity industry through our content. We wanted to reflect the extent to which cyber is now a critical business issue and a theme that’s increasingly woven through technology, business and policy trends now and in the future.
To work in cyber in 2020 is to be at the forefront of some of the biggest ethical, regulatory and political questions facing society.
Like all of those individuals and organisations who are a part of LORCA, what fascinates me just as much as the growth potential and commercialisation of our cohort companies is the opportunity to work alongside people who are developing technologies that will shape the future in years to come.
And to work alongside people who are trying to address some of the unanswered questions that technology has posed. Questions like:
How can we combat the wave of disinformation flooding social media?
Who is responsible when a cyber event renders a driverless car inoperable at 70 miles per hour on the motorway?
And how can we create secure and accessible digital identities to help society bridge a widening digital divide?
The digital world is the new Wild West, and it is cyber experts working with those in adjacent fields – including ethics and public policy as we have heard this week – who are introducing rules and principles to govern it.
If nothing else, cyber in 2020 means predicting and asking the right questions in advance of them needing to be asked.
LORCA Live is our salute to everyone working in cybersecurity across startups, corporates, investors, the government and academia. We are with you every step of the way.
Why we need an ecosystem approach
Throughout the week, we’ve talked about the importance of the UK cyber startup ecosystem. I wanted to clarify the two key reasons why the success of cyber startups up and down the country is so critical to the future of the whole country.
The first is economic growth. We’ve spent so much time discussing the record levels of investment going into British cyber startups because it’s the best indicator for the market’s confidence and optimism in the growth potential of these businesses.
This means that the international investment market is looking to the UK to produce world-class cyber companies and create products that will be sold around the world.
Considering the economic crisis in which we find ourselves, this is such good news because it means cyber companies will be the ones driving economic growth, creating jobs and taking British IP worldwide.
In the same way that fintech emerged out of the financial crash as a new and growing sector of our economy, I believe that cyber can and will define the post-pandemic economic recovery – both directly through the continued growth of its sectoral economic contribution and indirectly, as an enabler for our wider digital economy, which has expanded and leapt forward by at least a decade in the space of a few short months.
Cybersecurity is now equally as critical for the multinational corporation, as it is for the local baker who has pivoted their business during the last six months and now accepts online orders and payments for the first time.
The second key reason for the importance of a robust and sustainable UK cyber ecosystem is because we’re stepping into new and unknown territory.
The COVID-19 pandemic means we’re walking into a perfect storm of an expanded attack surface, unknown vulnerabilities and low levels of cyber literacy and security hygiene. The use of data has never been more important: more people are working from home in insecure environments and we’re spending more and more time online buying food, watching content and connecting to families and friends.
Even before the pandemic, we knew there were challenges ahead, from driverless cars and digital identities to cyber attacks launched by hostile states and an increasing dependence on tech-enabled national infrastructure.
The problem is, as we’ve heard today, there is a realism gap between the perceived risk of being online at an individual level and the ultimate consequence when things go wrong.
To frame this another way, we are in the midst of a global health pandemic. Concurrently, we’ve heard this week about the increase in attacks on the health sector. Today it’s being reported that a murder investigation has been opened by the German police after a patient died following a ransomware attack on a hospital.
Cyber resilience is a matter of national security, and the consequences of a concerted cyber attack on the UK means we can’t afford to do anything other than maximise our investment, further accelerate innovation and create our best possible digital future.
The only way to do this is to support our cyber startup community, which is driving the new technologies and solutions that we don’t even know we need yet.
Reasons for optimism…and challenges ahead
What I’ve learnt from two years running LORCA is that we have plenty of reasons to be optimistic.
Despite the pandemic and the economic challenges which we may face in the coming months, the UK has a long-term track record of producing world-class cyber companies and innovations.
We have world-class academic institutions, we have a critical mass of global investors, we have a government that’s fully committed to supporting the cyber industry, we have a vibrant community of entrepreneurs and a wealth of expertise within industry collaborating with cyber startups day in, day out.
Of course, there are still challenges that need to be overcome.
The funding gap for early-stage cyber businesses needs to be addressed to ensure the sustainability of the sector.
Too few rounds are being raised by first-time entrepreneurs and those raising capital for the first time.
Too much money continues to go to too few later-stage startups who have already survived the famous valley of death.
Without more intervention and support for our early-stage startups, we risk limiting the potential of a generation of talent – talent that we will rely on to grow our way back to a prosperous economic future.
But through the thousands of hours that we’ve spent with our cohort companies, and the willingness from the wider industry to come together and support the next generation of cyber businesses in the UK, there is a clear appetite from entrepreneurs, business leaders and the government to learn, collaborate and champion the ecosystem as a whole.
Most importantly, I want to recognise the startup founders and the startup teams whose determination, grit and courage is the future of our country.
Speaking directly to those entrepreneurs – I want to say that LORCA is here to support you. We admire what you’re achieving, and we want to make your success a reality.
What’s next for LORCA
So what role does LORCA have to play in all of this?
In our live broadcast on the first day of LORCA Live, Andrew Roughan, managing director of Plexal, gave an update on what LORCA has achieved over the last two years. And we’re incredibly proud of the numbers: £153m raised by cohort companies, £26m in revenue generated and 844 contracts secured. But I believe we’re just getting started.
We’ve created an ecosystem to commercialise and scale cyber startups and the success of the 72 cohort companies we’ve supported shows what a difference government backing – combined with private sector support – can make.
Our cohort companies are set to create 800 jobs by 2022. This could be a vital lifeline during the economic recovery as the employment landscape re-balances.
We’ve supported many digital skills initiatives and are campaigning to increase diversity and inclusion in cyber. We want to continue this work and stimulate startup growth in a way that makes cyber careers accessible to as many people as possible.
We’re very proud that 58% of our cohort companies are based outside of London, with 36% based across regional areas of the UK and 22% having moved to the UK through LORCA to engage and grow into the UK market.
LORCA is an access point to growth capital, global industry and capital markets in London for startups around the country, and a critical springboard to international markets around the world.
We want to continue this and make our programme available to startups in the cyber clusters that are emerging nationwide.
We can’t do this without the support of the government. And specifically, the support of DCMS has been essential to stimulating cyber startup success through our programmes. We are confident that the government stands shoulder to shoulder with us in our ongoing commitment to creating a world-class cyber ecosystem in the UK.
These are exciting times to be a cyber entrepreneur in the UK. My hope is that LORCA continues to sit at the heart of the UK cyber ecosystem, helping our most promising startups and scaleups realise their full potential and helping to create a world-class cyber ecosystem for many years to come.