The UK is said to have more unicorns than any other country in Europe. Now, we’re not talking about the beautiful (but mythical) horned horse; we are talking about tech startups that are worth $1 billion or more. For the UK, this is a very impressive figure, that is until you realise that Silicon Valley has so many of these $1 billion tech startups that they’ve had to create a new term – decacorns – and these are $10 billion firms!
The UK has always appeared to be in the US’ shadow, especially when it comes to tech companies. Even more so when billion dollar startups are becoming so common in the US that they hardly relate to the name of unicorn anymore, which is meant to reflect the rareness and difficulty of achieving a $1 billion valuation.
Traditionally Europe’s tech scene has always been smaller than the US’ because, as Rob Kniaz, a former Valley resident and partner of London’s Hoxton Ventures states ” it’s hard to build big companies here.” In the US, where they have an audience base of 320 million, one currency and (generally) one language it makes things a lot easier to grow and scale a company.
Despite Europe seemingly being on the back foot in this regard, London appears to be fighting the good fight on behalf of the rest of the continent. More and more startups appear to be basing themselves in the capital, especially fintech startups, which appear to not have had too much of an issue in securing investments from the likes of HSBC, RBS and Barclays Bank.
Two things which are certainly helping the tech startup cause in London are the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS); both of which have been introduced by the British government. The two schemes are designed to encourage investment in small businesses by offering investors tax relief.
The British government must be lauded for its attempts to encourage investment, especially when compared to the US government, which has always taken a very hands off approach when it comes to investment in business.
The UK government has also seen a positive result following their push around “Tech City” (the cluster surrounding the Silicon Roundabout, which is the area where tech startups have settled themselves in London). Since the time when the drive started (2010) the area has seen a number of exciting things take place, such as hackathons and networking events which played a large part in building the Californian Valley, so will hopefully do the same for London.
The current state of play
One thing that most experts tend to agree on is that the UK, and London in particular, has everything it needs to compete on a level playing field with Silicon Valley. The UK can access the top tech talent it needs from its world class universities, such as Oxford and Cambridge, which are certainly on par with the US’ Stanford.
More and more top talent is pouring into London and an ever increasing number of startups are ‘starting up’ which means that the Silicon Roundabout is growing. So, whilst London may not yet have a decacorn to compete against the likes of Silicon Valley’s Uber, it is coming…we just need to be patient.