'Big risk' business needs more support says Veeqo founder

Swansea's Urban Village is home to the city's growing digital sector Image copyright Coastal
Image caption Swansea's Urban Village is home to the city's growing digital sector

More needs to be done to encourage "big risk and rewards" businesses in Wales, a technology entrepreneur has said.

Matt Warren, of Swansea's TechHub and the Veeqo online retail firm, called on the Welsh Government to offer more loans as well as grants and for Finance Wales to become less "risk averse".

He said high risk business was needed for growth and employment.

But Finance Wales said it was committed to fostering a vibrant and positive technology sector in Wales.

Mr Warren made the calls as his firm Veeqo, which helps online retailers increase profit by managing orders across different websites like Amazon and Ebay, launched an online campaign to raise £2m from venture capitalists.

Established in 2013 in Mr Warren's kitchen, the company now employs 30 people, and has a £1m revenue. In 2014, it received a £50,000 Welsh Government Digital Development Fund grant, which Mr Warren said helped him attract private investment.

But he has now called on the Welsh Government to introduce more repayable loans, as well as grants.

"The sort of companies who are interested in grants don't tend to be the ones who want to grow really big," he said.

"With a loan, the company is going to have spend the money well and think really hard about what they want to do with it."

Finance Wales need to become more innovative, he said, and added that the institution is "government-led and risk averse."

"The tech industry is high risk, but it brings big rewards," he added.

"Finance Wales tend to invest in more low-risk, traditional industries. But these aren't the companies who are going to employ thousands of people in the future."

Image copyright Thinkstock

But Steve Smith, technology venture investments director at Finance Wales, said a number of funds support new digital firms, including the £10m Wales technology venture investment fund and the £7.5m technology seed fund, both backed by the Welsh Government.

Finance Wales also have a team who specialise in helping early stage technology companies.

He said: "Since April this year, this team has invested over £5.5m in nearly 30 Welsh companies. An active co-investor, our investments are usually matched by the private sector.

"We're committed to fostering a vibrant and positive technology sector in Wales."

And a Welsh Government spokesperson said Veeqo had "thrived with their support".

It said it was aiming to launch a Development Bank of Wales next year, and that latest figures showed "above average survival rates" for companies backed by the Welsh Government.

The spokesperson added: "We are always seeking to improve, and are currently working on refreshing our economic priorities so we can continue to build a fairer, more prosperous, and more secure Wales.

"Business finance is one of many issues being considered as part of this work."

Image copyright Veeqo
Image caption Veeqo founder Matt Warren called the Finance Wales investment bank "risk-averse"

Veeqo's growth reflects a rise in Swansea's digital sector.

The city's TechHub, which Mr Warren co-founded, houses 20 digital start-ups, employing up to 300 people.

Swansea is set to be the first area of Wales to receive an ultra fast broadband connection, the city council plan to set up a 'city digital district', and Swansea could be home to the world's largest interactive digital screens for learning about science and technology.

Prof Paul Hannon, director of Swansea University's institute for entrepreneurial leadership, said: "Matt's success with Veeqo is an inspiring story that will provide further encouragement to Welsh small to medium enterprises (SMEs) looking to take their businesses to the next level, which will undoubtedly add significant value to our local economy."

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