AI is booming in start-ups – but turning it into real value is still a challenge

Image credit: Propel Tech

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Start-ups are increasingly investing in AI, with 93% already incorporating it into their software infrastructure and 95% planning to increase spending by 2026. However, many face challenges in translating this investment into real-world value, with issues such as data, systems, and costs being common obstacles. Propel Tech highlights that while AI is enhancing bespoke software development, it requires strong foundational systems and expert understanding to effectively drive efficiency and growth.

Press Release

PRESS RELEASE: April 2026

For start-ups, the pressure to move fast has always meant making pragmatic technology choices: build from scratch or rely on off-the-shelf SaaS tools. But that traditional “buy vs build” decision is becoming less clear-cut.

Artificial intelligence is rapidly changing what bespoke software can do, how quickly it can be delivered, and how it is built. For early-stage and scaling businesses, this creates huge opportunity, but also new complexity, as many are still working out how to turn increasing AI adoption into meaningful, measurable outcomes.

Recent insight from UK bespoke software development firm Propel Tech shows that in 2026, 93% of organisations are already investing in AI as part of their software infrastructure, with 95% planning to increase spend further. However, turning that investment into real-world value remains a key challenge across all sectors, with 85% reporting issues when implementing AI.

For start-ups in particular, this challenge is often amplified by limited resources, evolving product-market fit, and fast-changing technical requirements.

As AI accelerates bespoke software delivery, tailored solutions are becoming more accessible, more adaptable, and better suited to delivering faster returns. Rather than replacing SaaS, this shift is enabling start-ups and growing businesses to build on existing platforms with more intelligent, high-performing solutions that reflect their processes, data, and strategic goals – improving speed, flexibility, and cost efficiency.

As a result, bespoke AI systems are increasingly being viewed as critical infrastructure for ambitious start-ups, not just supporting operations, but actively driving efficiency, insight, and growth.

Against this backdrop, Propel Tech is seeing growing demand from start-ups and scaling businesses looking for solutions that combine the flexibility of custom development with the accelerating capabilities of AI.

David Ritchie, Co-Founder of Propel Tech, comments: “We’re seeing a clear shift in how growing businesses think about bespoke software. AI is making tailored solutions more accessible than ever, and much quicker to implement, allowing even smaller teams to build systems that are far more closely aligned to how they actually work.”

Advances in generative and agentic AI are accelerating development cycles, but the real opportunity lies in how these tools are applied. AI is enhancing, rather than replacing, the role of experienced developers.

Wil Jones, Technology & Solutions Director at Propel Tech, explains: “AI helps remove friction from the development process, but the real value comes from combining that capability with human expertise. For start-ups, that means less time spent on technical overhead and more focus on solving the right problem and building the right product. The outcome is better systems that are more responsive, better integrated, and designed to support faster, smarter decision-making.”

The recent study also highlights the practical barriers organisations face when adopting AI. In the 2026 survey, 84.0% of respondents said that a drive to invest in AI had uncovered other issues across their business. The most frequently cited were data issues (29.0%), systems issues (28.6%), and cost issues (27.3%), followed by people issues (22.2%). This reinforces the view that AI adoption is acting as a diagnostic force, revealing weaknesses in core infrastructure, integration, and organisational readiness – challenges that are especially acute for early-stage businesses.

These findings reinforce a key point: AI does not reduce the need for strong software foundations, it increases the importance of getting them right, alongside the growing need for expert developer understanding.

Andy Brown, Co-Founder of Propel Tech, adds: “What we’re seeing is a shift from software as a static tool to software as something that continuously adapts to the business. For start-ups, that creates huge opportunity, but it also requires the right structure underneath it. The teams that succeed fastest are those that take a considered approach, bringing together data, systems and expertise to build solutions that genuinely deliver value.”

As start-ups face increasing competition and pressure to scale quickly, they are looking to maximise the return on their technology investments. Bespoke, AI-enabled software is becoming a more accessible and strategic option, not only for larger enterprises, but for start-ups and scaling businesses seeking to improve performance, agility, and scalability.

This reflects a broader shift in mindset: away from a simple “build vs buy” decision, and towards designing the right combination of platforms and tailored systems to support long-term growth from the earliest stages.

David Ritchie concludes: “The conversation is moving towards ‘what do we actually need, and how can we build it in the smartest way possible?’ AI is making that question far more achievable to answer.

“To support organisations at that stage, we’re offering a free AI readiness audit to assess systems, identify opportunities and help turn AI investment into practical outcomes.”

Notes to editors

  • Propel Tech is a UK-based software consultancy specialising in the design and development of tailored digital solutions.
  • The company supports organisations in modernising systems, improving performance, and unlocking value through scalable, AI-enabled technology.
  • The rise of AI-assisted development is expected to continue accelerating, increasing demand for more tailored, high-performing software solutions.
  • Insights and stats from Propel Tech’s 2026 software survey: https://propeltech.co.uk/unlock-the-future-ai-potential-of-software-development/

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