We sum up the key points from Public’s ‘State of the UK GovTech Market’ report.
The GovTech market is currently at least £6.6bn, and estimated to be at least £20bn by 2025. This growth is driven by new technologies, new contracts, and the positive externalities of private sector companies. We are also seeing significant increases in deal volumes and values, not dissimilar to the rapid increase in FinTech in 2014.
GovTech’s similarities to FinTech continue. The proximity of talent, capital, and rich regulatory & policy systems have led to a supply of innovative new firms. Both the public sector and banks have had large legacy core systems and a demanding large-scale market to satisfy. If GovTech continues to follow FinTech’s progression, the UK is geared to become the world’s leading GovTech hub.
Some companies are already demonstrating GovTech’s potential. The ‘State of the UK GovTech Market’ report includes the Public 100, a list of the most significant product-led GovTech firms with public sector traction in the market today.
“By 2022, I think we will reach valuations upwards of £10bn…”
One of the more revealing aspects of the report, to some, has been the demystification of the public sector’s procurement process. Government procurement cycles can be much shorter than they are often perceived to be, and the process is much simpler than previously thought. The report features a simplification of the tendering process for smaller contracts (see pp.23–4).
How will the GovTech market look in five years time? The definition of the market will likely be more expansive and more specific. Most importantly, however, the numbers will be much larger. I expect the market to increase geometrically, and by 2022 I think we will reach valuations upwards of £10bn (to be tested!). It’s a very exciting time for GovTech.
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Join us at The GovTechSummit in Paris on 12 November 2018 to bring entrepreneurs to the public sector!