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UK Tech Startup Ecosystem 2015

Since venture capital investment into UK tech startups has hit an all time record high this year, with more than $2.2bn raised, there is no surprise that there has been a focus on continuing that growth.

A recent report “Tech Nation: Powering The Digital Economy 2015” highlights some key figures of growth that the nation has already seen. The report analysed 47,200 digital companies and found that 15% of total UK companies formed in 2013-14 were digital companies.

Headline Facts:

  • Over 1.46M people employed in digital companies nationwide
  • 45K current number of digital jobs being advertised in the UK
  • 62% of those were outside inner London
  • Over 1m digital technology jobs were advertised last year, 2014
  • Digital employment is forecast to grow by 5.4% by 2020



Startup Ecosystem: London 

According to the second release of the startup data benchmarking report by Compass entitled; Startup Ecosystem Report, London has come out as the leader amongst its European rivals. Other key insights from the latest report has seen New York City overtaken Tel Aviv in the rankings to become the second most significant startup ecosystem in the world, behind Silicon Valley.

The below index is produced by ranking ecosystems along five major components: Performance, Funding, Talent, Market Reach, and Startup Experience.


Headline Facts: London

  • The London ecosystem has become more interconnected and startup teams have become more international
  • London has quadrupled in exit growth between the years 2010-2014
  • Total venture capital investment across the top 20 ecosystems rose 95% from 2013 to 2014
  • The biggest leaps within the startup ecosystem are New York, Austin, Bangalore, Singapore, and Chicago
  • The is still a lack of gender equality that is common across all startup ecosystems, over at Potential VC we have just started a Female Founders’ Syndicate on AngelList to try and help level the field
  • No ecosystem comes close to an equal share of male and female founders

Guardian Interviews

The Guardian has interviewed 4 startup “experts” who have thrown in their 2 pence on how as a nation we can build out startup ecosystem.

Sherry Coutu CBE, entrepreneur, non-exec director, investor, adviser and author of the scale-up report


With the appointment of a scale-up minister, release of up-to-date data that the government already holds, some minor adjustments to policy, more training for key individuals and minimal adjustment in funding and resource levels, I firmly believe that we can have a stable of super-unicorns.

Firstly, we need lots of UK startups. Check – we’ve got more start-ups per capita than in the US! Good so far.

We need to have talent for them to hire – lots of talent: whoops – 990,000 unfilled jobs? We need to work on that.

We need role models from the world of business going into schools to inspire students and let them know what they need to study to fill the posts being created. The government has created the National Careers Service and there are some great charities doing awesome work in this area.

We need specialist coaches and mentors to help the leaders at our fastest-growing start-ups learn how to supply ever more customers with ever more products in ever more countries.

The government should launch a scale-up visa so that the best international talent can plug the current gaps and should encourage more programmes like the ELITE course at Imperial College or the Small Business Growth course at Aston University.

We also need the government to release data it holds more promptly. For instance, Companies House data is free but there’s a significant delay of 12–18 months.

And finally, we need the government to assign a minister to be responsible for scale-ups.

Job done!

Manish Madhvani, managing partner, GP Bullhound, co-author of The European unicorns: do they have legs?


Our report shows the unprecedented rise of unicorns in Europe and, in particular, the undisputed success of the UK in driving growth.

However, whilst the European tech community has progressed dramatically in the past decade, US unicorns still boast valuations we can only dream of. The next objective for the European billion-dollar tech companies is to raise their ambition levels and grow into super-unicorns. A supportive and informed community of VC firms, angels and institutional investors providing capital for the tech sector are necessary in order for the European companies to reach the $10bn and $100bn valuations.

We can’t forget that Europe, compared to Silicon Valley, is in the early stages of its development. The challenge is consolidating and celebrating the unique attributes of Europe’s tech success stories. The vast majority of new additions to the prestigious unicorn list are consumer companies. This is a clear contrast to the US, where enterprise IT continues to dominate the highest valuations. Aside of Europe, Britain has made itself a world leader in the fintech sector.

European unicorns have the potential to successfully grow globally. Its issue lies with an inability to create companies with the winning formula of killer ideas, unstoppable momentum and the best funding that enables them to go supermassive. Establishing well-connected, business, investor and knowledge hubs akin to Silicon Valley is key to addressing this. Furthermore to scale past the $5bn level expansion into the US and or Asian markets at the right time in their evolution is also essential.

Ultimately this is a question of confidence. Certain asset classes have not been investing in European companies because there has not been a track record of success. 40 tech unicorns is precisely the critical mass required to change this.

Christian Hernandez Gallardo, managing partner, White Star Capital


It is ironic that a few years ago there were questions about whether companies with billion-dollar valuations could be created in Europe. That has been proven, and so now the bar begins to move and we begin to question whether $10bn companies can come from Europe. I believe that in the next few years you will see a UK-based company achieve a $10bn valuation. While it might be a consumer-technology company like King or a financial technology company like TransferWise but more interestingly it might come from some of the emerging fields like artificial intelligence, health tech or new materials like graphene, where the UK’s universities are among the world leaders in research and PhD output.

To achieve this the ecosystem needs a couple of components: the talent with the right level of vision and ambition, which I feel we now have; the funders who can understand and back deep-tech companies and have the ability to fund them to compete on a global scale, which we are developing; the exit markets which neither the AIM or FTSE currently provide at scale and we are therefore reliant on US exchanges and mostly US-based buyers.

It is important to note that most often forget that one of the leading companies behind the era of mobile in which we now live, ARM, is a UK-based company with a valuation well over $20bn … proof that yes, you can build large enterprises from the UK.

Fred Destin, partner, Accel


The current generation of British unicorns is made up almost entirely of home-market champions. Valuable segments, such as real estate with Zoopla or food delivery with Just Eat, clearly allow startups that achieve local leadership to reach billion-dollar valuations. Moving to the next level requires much more.

It is likely that super-unicorns or decacorns, if you want to call them that, will need to belong to one of two species: pan-European or global leaders in a valuable category of online commerce or digital media services (such as being attempted by London startups Secret Escapes and Deliveroo) or global category leaders in areas like infrastructure software, SaaS or messaging (Markit or ARM being prime examples).

Across Europe, we are seeing promising examples of overall category leaders emerging, such as Spotify in music, Delivery Hero in food delivery and Supercell in mobile gaming; all these companies are now driving multi-billion dollar valuations.

While American businesses have been much better at building global platforms and scaling them (Uber, AirBnb), the European venture industry is confidently backing more recent entrants like BlaBlaCar (intercity transportation), WorldRemit (remittances) and Funding Circle (SME lending). The founders of these companies are intent on world domination and have the means to achieve it!

To rear decacorns, British entrepreneurs need to think beyond their borders from day one, just like the limeys of old!

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