You can’t do much to change the weather, but you would be hard pressed to find many people arguing against London being the central city for arts, theatre, live music, sport, museums and architecture, even these days the food is pretty good. Believe it or not, scientists have recently even said the British have a strong showing of happy genes.
In fact, if you’re bored with London, escaping for even the day to Amsterdam, Barcelona, Berlin, Cambridge, Dublin, Edinburgh, Oxford, Manchester and Paris is pretty easy. But if you love startups and technology, what most people still don’t fully appreciate is how fundamental a force London has become in the global technology ecosystem.
So as we start 2016, here are just 12 possible reasons why London is now so firmly on the map for startups and scale-ups alike:
- London & UK’s macro conditions — UK GDP is top 5% globally and growing; Internet as % of national GDP is top of G20; London speaks 300 languages and is one of the world’s greatest and most diverse cities; we speak English (without an American accent, which sometimes helps!); less than an hour from Cambridge which is becoming a significant global deep-tech hub; GMT.
- Top 3 global market for consumer tech adoption — UK is the largest market other than US and China for all major tech companies because of UK consumer’s higher propensity to be mass-market early adopters of smartphones, broadband and on-demand TV; London is the top city for Facebook & Twitter; global leader per capita for e-commerce and online ad spend by brands.
- Top 3 customer base for enterprise & infrastructure tech — London is unique in not only having major customers across every enterprise sector but have government & financial markets co-located alongside. If you want to sell technology to business & government, the efficiency of selling in London is like having New York, San Francisco, DC and LA all in one city.
- Government with an open & ambitious attitude — incredible practical leadership of GDS; D5 principles (open source, open data, coding in schools, 25% of government IT procured from startups); very real incentives for talent (startup visas, entrepreneur capital gain tax incentives) and seed investors (EIS/SEIS); support for growth companies (TechCity UK, ScaleUp, LSE High Growth Segment); much more functional regulation model than US especially in relation to fin tech & health: very real transformational policy ambitions for sharing economy
- World class universities & increasingly meaningful R&D for deep tech — there are over 5k new STEM PhDs per year in the UK; profound expertise in AI/ML (Deepmind, CSER, Amazon); drones & aviation (Facebook); advanced automotive, robotics & manufacturing (McLaren, Dyson); advanced hardware (ARM, CSR/Qualcomm, Pi)
- Lots of capital from experienced local investors at every step along the funding ladder from pre-seed to IPO — a few examples of the many strong, established, well networked, value-added investors at every step of the funding ladder include: experienced angels (Ed Wray, William Reeve, Alex Chesterman), pre-seed (Entrepreneur First, Seedcamp), seed (Connect, Episode1, Hoxton, Passion, Playfair), early stage (Accel, Balderton, Index, Octopus, BGF), growth (DST, GA, Summit, Vitruvian) all the way to LSE (and NYSE/NASDAQ)
- Startup ecosystem maturing across all key dimensions — experienced talent battle-tested at both scaled startups (eg Skype, Lovefilm) and US tech leaders (eg Amazon, Google); sophisticated company support from lawyers, bankers, recruiters, marketing & PR; amazing work spaces makes London not just a great place to live but work, and the quality of opportunities is also finally becoming a magnet for top US talent
- London has inherent and deep institutional strengths — with scale in world-leaders in financial services, healthcare & pharma, education, fashion, retail, media, advertising and the arts but…. there is still a huge challenge in unlocking these institutional assets and to be honest we have had limited progress with significant adaption and adoption of a networked mindset
- But we now at least have many role models who have gone all the way to IPO and beyond — with over £30bn of new value from the likes of ASOS, Betfair, JustEat, King, MoneySupermarket, Paysafe, Sophos, Rightmove, Markit, Mimecast, Worldpay, Zoopla — not just Sage & ARM anymore (and not forgetting Skype)
- Who set the stage for the emerging stars — including Deliveroo, Farfetch, Funding Circle, Shazam, Transferwise, Worldremit plus Skyscanner & FanDuel outside London
- Giving the next generation ambitions for real scale — which is now becoming a long list including Citymapper, Datasift, Huddle, Improbable, Lyst, Moo, OneFineStay, Secret Escapes, Songkick, Swiftkey
- And last but by no means least, we are getting to a level of ecosystem maturity where a very long list of second & third acts are starting to emerge — Brent with Founders Factory & Martha with DotEveryone and the Lastminute alumni (Wahanda, Made etc); Joanna Shields in government & Christian Hernandez and the Google/Facebook EMEA alumni; David Yu, Stephen Morana and the Betfair alumni at Funding Circle and Zoopla etc; the very productive exoduses of the Lovefilm, Last.fm, Skype & Playfish alumni; founders turned investors (like Mike Lynch with Invoke, Niklas Zennstrom with Atomico, Jos White with Notion and the Innocent founders with JamJar); experienced investors creating new funds like Toby, Michael & Simon at Mosaic and Frederic at Felix and many many more
Having been actively involved founding and investing in over a 100 tech companies in London since 1994, we couldn’t be more excited to be able to focus our newest seed fund on the incredible startup ecosystem that London has become. We’re pretty sure the next 20 years will be even more exciting than the last and look forward to continuing to play a role in the next phases of London’s development.
The LocalGlobe team