There are lots of reasons why London remains the beating heart of Europe’s tech startup universe, despite the UK’s current political turmoil.
Because of its shared language, the city is the first port of call for US companies looking to expand into the EU, while its long-standing reputation as a centre for finance makes it a shoo-in for fin-tech startups who want to leverage its considerable know-how. Add to the equation dozens of universities, ready access to investments and the inevitable cross-pollination of entrepreneurial ideas, and you have a recipe for startup success.
The number of new technology companies launched in the UK last year rose by almost 60 percent, with London’s tech businesses accounting for more than 80 percent of all venture capital (VC) funding invested in the country over the last two years – a total of £5bn, according to figures from London & Partners. That’s significantly more than the UK’s closest European rivals France (£1.55bn) and Germany (£2.15bn).
East London remains London’s tech hotspot
With Shoreditch and Hoxton at the epicentre of tech-driven growth, this area of East London has changed hugely in recent years. The once run-down neighbourhood has undergone a process of tech-fuelled gentrification that’s created plenty of employment opportunities for techies and non-techies alike.
Naturally, it’s a transformation that’s come with a price: rents in both residential and commerce sectors have skyrocketed, making it more difficult for new businesses to be part of the area’s thriving creative community. Thankfully, the emergence of tech-focused co-working spaces, like TechHub, has enabled even the smallest startups to benefit from the Shoreditch buzz.
The co-working formula not only means that means startups have an affordable way of basing their businesses in London but can also tap into the talent, networks and growth opportunities that proliferate in the capital. It also mitigates the risk to businesses of trying to succeed without ready access to tech-focused resources. Tech companies do succeed outside London – but, they’re likely to have to work far harder.
London is a fertile environment for tech unicorns
Tech unicorns are thriving in London – in fact, there are more billion-dollar private companies in the UK than in any other European state, boasting a combined valuation of $23bn, with London alone producing 36 unicorns.
From its London base, ecommerce start-up Farfetch has turned online luxury fashion retail on its head. Fashionistas can buy from its designer collection in over 190 countries and the word on the grapevine is that the company will soon be going public in New York, with a valuation of $5 billion. Fintech challenger bank Revolut is now valued at £1.2 billion, while Farringdon-based virtual world creator Improbable hit the headlines last year when it received more than half-a-billion dollars in funding – the largest investment made in a European tech firm.
London startups also have access to accelerator programs that provide education, mentoring and financing opportunities to promote rapid growth via immersive partnerships: accelerators like Seedcamp support hundreds of businesses a year.