The tech sector is showing signs of recovery but there’s no room for mediocrity when it comes to raising investment.

They were among the main findings of the fourth quarterly Tech Barometer event, organised by tech specialist Fairmont Recruitment and BusinessCloud to discuss the changing trends in tech, recruitment and investment.

Jack Donohue, CEO and founder of Fairmont Recruitment, told the audience of 70 people that he was seeing some ‘green shoots’ of recovery in the sector.

“Earlier this year we definitely saw clients hold back on making new hires following the collapse of Silicon Valley Bank and wide scale job losses in the technology sector,” he said.

“However, after a quieter July and August, we’re starting to see some positive green shoots and our clients are more optimistic for the rest of 2023.

“There has also been a movement away from it being an employee-led market. Salary expectations have cooled and people aren’t necessarily looking to change jobs as quickly.”

He was joined by Tom Eggleston, CEO of ProofID, which raised £15m from Maven in 2022.

He said: “ProofID ensures that the right people get the right access to the right data at the right time.”

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ProofID employs 100 people and has a turnover of c£25m and Eggleston said the investment had been a game-changer.

“It has enabled us to pursue the strategy we really wanted to in order to build and develop the business, “ he explained. “We’ve been able to invest in sales and marketing and to fund an acquisition strategy, predominately in the US.

“It’s resulted in some strong growth for us, 30 per cent last year and that looks to continue into the future.”

In terms of wider tech trends, Eggleston said: “12 months ago, it was an employee-led market. We had issues with retention, it was pretty difficult. We’ve been able to invest in that area and I would say things are more balanced now.

“I think there’s been a trend in the last six months to deferring investment among our big enterprise customers but my feeling is things are starting to change for the better, particularly in the US but also in the UK, where confidence is returning.”

Ed Prior, associate director in the North West corporate finance team at KPMG, said there had been a correction in the tech industry.

“The tech sector is still quote buoyant,” he said. “We’re coming out of a relatively quiet time but from speaking to other advisers and investors there are lots of businesses being prepped to go to market, which is great.

“If you take a longer-term view over the last 12 months, sentiment is definitely down in the tech sector but that’s coming off a 15-year bull run so it’s unsurprising that levels of activity in the last few quarters have been quieter than in previous years.”

David Levine, principal of Manchester Angels Network, said pre-seed, seed and early Series A funding was still available for good businesses but warned that founders needed to be clear about their routes to market.

“The narrative from the press when it comes to fundraising and what it actually takes to get traction in the market, is a little bit depressing but doesn’t really reflect reality,” he said.

Martin Bryant is the founder the UK startup newsletter PreSeed, which profiles two startups a week.

He told Tech Barometer: “There are lots of startups in the market but there aren’t so many keen investors throwing money at them. A lot of people are holding their money back.

“Investors are wanting to see proof of profitability, not even revenue early on, which is understandable but might hold back some later stage growth if you’re expecting to see companies generating profits at an incredibly early stage,” he said.

Susanna Lawson is the co-founder of startup Circle of Trust, having previously sold her EdTech OneFile in 2021.

“We’ve currently raised £250,000 in pre-seed funding and we’re hoping to get another £50,000 pre-seed,” she said.

“Circle of Trust is a digital online platform for word of mouth, trusted recommendations.

“There’s nowhere at the moment to get a trusted recommendation online. You have review sites and they’ve been proven to be between 20-40 per cent fake.

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“You might go on Facebook or a WhatsApp group but it’s very siloed and you might not know who is providing the review. Trust the person, trust the recommendation.”

They were joined at the fourth Tech Barometer event by Jen Atkinson, co-founder and executive chair of Travel Seen. As CEO of Chester-based ITC Travel Group, she helped grow the company’s turnover from  £40m to £90m.

The event was hosted by Chris Maguire, executive editor of BusinessCloud and TechBlast.