The number of start-up businesses that are successfully scaling up increased by 12 per cent in 2016, partly because of targeted government support for growing businesses.

There were 35,210 scale-ups, defined as companies that increase their revenues or staff numbers by 20 per cent over three years, in 2016, up from 31,440 the year before, according to official statistics analysed by the ScaleUp Institute.

The 12 per cent rise compares with a 2 per cent rise in the number of companies overall, from 5.4m to 5.5m. In 2013, there were just under 27,000 scale-ups.

The government has prioritised scale-ups as part of its industrial strategy, noting that the UK is the third-best country in the OECD at starting businesses, but only the 13th best at scaling them.

“We are starting to get it right,” said Sherry Coutu, the co-founder of the ScaleUp Institute, a not-for-profit company that supports fast-growing businesses. She said that an increase in “patient capital”, where investors do not expect to make a short-term return, was “so important”.

In the wake of the financial crisis, Barclays, HSBC, Lloyds, RBS and Standard Chartered established the £2.5bn Business Growth Fund, which takes long-term stakes of up to £10m in growing companies.

The BGF has now made £1.5bn of investments, with stakes in 221 companies.

“The best way to create the future champions of British industry is to think longer term and allow companies to scale up.

“The role of capital is changing and entrepreneurs are now seeking patient funding that can help achieve their longer-term ambitions,” said Stephen Welton, BGF chief executive.

Irene Graham, chief executive of the ScaleUp Institute, said the BGF was also taking stakes in companies that are more than 20 years old, but now growing rapidly, such as Petrotechnics, an Aberdeen software business and Cass Art, a retailer.

“These older businesses have episodes of growth where they spurt and then slow again. They are across all sectors and all areas of the economy,” she said.

Meanwhile, the British Business Bank, a state-backed wholesale lender, is putting £1bn into early-stage venture capital and is creating a £2.5bn British Patient Capital investment fund, said Keith Morgan, its chief executive.

Innovate UK, the arm of government that helps companies commercialise new products, has £503m to spend this year, and another £1bn over the next four years from the Industrial Strategy Challenge Fund.

Max Adams, of Innovate UK, said it was now also giving “soft support” with mentoring and coaching in a series of pilot schemes.

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