The UK has created 63 tech unicorns in the previous decade(according to Dealroom), and it nearly goes without saying that the huge bulk of those companies were based out of London, the country’s biggest tech hub.
Notoriously, London’s DeepMind, an AI start-up, was obtained by Google in 2014 for $500 million, however it has resolutely declined to relocate to Silicon Valley; creator Demis Hassabis says the city’s variety of skill suggested the powerhouse required to stay put.
London has actually produced fintech upstarts like Revolut, Monzo and Starling and attracted early Skype staff member who went on to develop TransferWise. In 2019, London’s start-ups got $9.7 billion in equity capital financing, more than Berlin, Paris, Amsterdam and Madrid combined.
Furthermore, in 2015 Pitchbook discovered that approximately $4.4 billion worth of deals had involved at least one U.S.-based investor, with London receiving over $12.5 billion from American investors in the previous 5 years– nearly two times as much as Berlin (on $6.5 billion of investment from U.S. VC firms).
Brexit uncertainty may affect start-ups’ capability to hire and sale, and the UK federal government’s points-based system for immigration is unlikely to please the industry’s starved cravings for talent. London is a tech supertanker that other European cities are not likely to be able to match any time quickly, Brexit or no Brexit.
In the period of COVID-19, will major centers like London still be able to bring in future tech unicorns, and will these be in the very same sectors as before? Will location be changed by mere time zones?
We surveyed much of London’s leading VCs to get their insights. Here’s who we heard from:
- Ruth Foxe-Blader, partner, Anthemis Capital
- Yana Abramova, partner, Pretiosum Capital
- Leila Zegna, co-founding partner, Kindred Capital
- Rob Moffat, partner, Balderton Capital
- Nic Brisbourne, managing partner, Forward Partners
- Sean Seton-Rogers, general partner, PROfounders Capital
- Simon Murdoch, handling partner, Episode 1 Ventures
- Nenad Marovac, creator and managing partner, DN Capital
- Andrei Brasoveanu, partner, Accel Partners
- Jan Lynn-Matern, creator and partner, Emerge Education
- Rob Kniaz, establishing partner, Hoxton Ventures
- Harry Briggs, partner, OMERS Ventures
- Hussein Kanji, partner, Hoxton Ventures
- Eileen Burbidge, partner, Passion Capital
Ruth Foxe-Blader, Anthemis Capital
Just how much is regional investing even a focus for you now? If you are investing from another location in general now, are you filtering for local creators?
Neither our investment thesis, nor our geographic focus has changed: we are an international investor, focused on the U.S., UK and Europe. We are filtering, much more, for the very best founders, as location feels lesser in lockdown.
From that, what do you expect to happen to the startup environment in London longer term, with the shift to more remote work (post COVID-19), perhaps from more remote areas. Will London remain a tech center or will the environment end up being more dispersed throughout the country?
As a global financial center with significant facilities (including capital) developed to support emerging innovation, London will stay a critical node in the fintech community.
Long-lasting, do you expect to be basically locally focused, specifically in light of COVID-19 or in other ways?
We’re preparing for a pretty considerable modification to working standards, at least over the near term (6-12 months). The long-lasting effect is likely to level the playing field for terrific creators operating beyond recognized tech hubs. Remote assessment of companies, while challenging, has the prospective to produce more equitable investment practices.
From that, what do you anticipate to occur to the start-up environment in London longer term, with the shift to more remote work (post COVID-19), potentially from more remote locations. Will London remain a tech center or will the community end up being more dispersed throughout the country?
As a global monetary center with significant facilities (including capital) designed to support emerging technology, London will stay a critical node in the fintech community.
Will there be tech centers post-COVID-19? What is a tech center now, by your definition?
To the level that capital, policy and culture play a big function in preferring particular types of economic activity, I anticipate existing tech centers to stay crucial bastions of innovation. That said, I believe we will see the rise of complementary tech hubs, as well as teams “in the middle of no place” pushed to start terrific business.
Exist particular industry sectors that you anticipate to do uniquely well or improperly, locally?
Offered the proximity to the City and the heritage in financial technology innovation, the London tech ecosystem will continue to produce excellent fintech and insurtech business.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.