Despite a challenging 15 months, Scottish startups have performed well and continued to grow, according to the 2021 Scottish Startup Survey.

The survey, run by the Engage Invest Exploit (EIE) team at the University of Edinburgh’s Bayes Centre, provides a glimpse into how Scottish startups have fared throughout the coronavirus pandemic.

More than two-thirds (68%) of startups said they grew during the pandemic, the survey found, with only 11% saying they contracted.

Similarly, nearly three-quarters (72%) of respondents said they expect their company to come out of the pandemic in a stronger position, with just 7% answering in the negative.

59% of startup founders also said their company had to pivot in the wake of the pandemic.

75 startups drawn from EIE alumnus companies – as well as other startups from across Scotland – were interviewed for the survey, exploring topics ranging from growth prospects to government support, recruitment and the investment landscape.

According to the survey, just one-third of startups completed an investment round during the coronavirus pandemic. However, the outlook for respondents remains optimistic moving away from the pandemic.

More than one-quarter (26%) said they were actively targeting angel investors while 31% revealed they were targeting venture capital firms.

The challenging operating environment brought on by the pandemic doesn’t seem to have dampened spirits among the survey respondents, with 92% stating that they were targeting investors outside of Scotland.

Remote communications culture has helped propel this outward looking shift among Scottish startups, the survey found, with 57% noting that platforms such as Zoom have made investor contact easier.

In relation to government support, 60% of startups said they had received government support over the last fifteen months, with 40% saying they had not accessed government support.

Notably, when asked whether the government is doing enough to support startups, nearly two-thirds (65%) said no.

Commenting on the findings, an EIE21 spokesperson said: “While only a third of startups polled secured investment rounds during 2020, government support was crucial for many, and overall it’s pleasing to see the overall confidence from founders around coming out of the pandemic in a stronger position.

“What also came through in the survey, was how the vast majority of startups are targeting investors outside Scotland – an area that remains crucial to the success of Scotland’s technology ecosystem.”

Recruitment has been a key talking point for startups during the coronavirus pandemic. Despite the challenges of hiring while many firms work remotely, 65% of respondents said they had continued to hire over the last 15-months.

Concerns over the impact of Brexit have also lingered throughout the pandemic, with 38% stating that the biggest impact Brexit has upon their business relates to hiring and retaining talent.

Callum Murray, CEO and Founder of Amiqus, which took part in the survey, said: “After taking the decision early on not to furlough any of our team, we were one of the companies in the survey that showed significant growth in the last year, but it’s our people first and the digitisation and behavioural changes brought about by the pandemic second that have led to that success.”

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Moving out of the pandemic, the majority of survey respondents (63%) said they are planning to return to the office this year, with 37% revealing they do not plan to return at all in 2021.

However, 93% of startups polled said they would continue to operate a remote working model.

Also looking ahead, many startups have implemented measures to deal with the wellbeing and mental health of their teams as a result of the pandemic.

Three-quarters of respondents noted that the well-being and mental health of their team has been one of the biggest challenges brought about by the pandemic.

Murray added: “The last year has taken a toll on every person and every family. We’ll be looking to build on our growth not just in terms of revenue, but in how we can continue to look after our people and contribute to making flexibility and wellbeing at work the norm.”