21% YoY Growth In London Based Startups

The past few years has seen an extraordinary number of startups explode onto the London scene and with many of these startups becoming incredibly successful and seeing huge growth, probably even beyond their founders’ wildest dreams, it is worth looking into why this might be so.

Analysis of data from Companies House shows that, over the past few years, technology businesses appear to have been the main driver behind London startup growth, with stats showing that the sector has seen a 200% increase! This should not perhaps be a surprise, since it is often innovators who drive growth forward and in no other industry do you see more innovators than in the tech industry.

It is also worth noting that the tech sector is getting enormous levels of backing from the government, who is not only creating a number of initiatives to encourage investors to give funding but also giving small businesses tax breaks where possible.

Recently, in June, London played host to London Technology Week 2015. This event saw IBM launch Tech.London, a platform which aims to bring together all things tech (London-based). This can include anything from news and jobs to events. The benefits are twofold; tech companies can have access to everything in one place and IBM would benefit from being able to access “Type A” startup businesses.

Even though it is clear that tech startups are leading the way in the capital, research from Real Business shows that the retail sector is actually the fastest growing business sector across the whole of the UK, with textile wholesales increasing by 170% and clothing and footwear retail by 76%. Ecommerce has also seen growth, although this is notably smaller than other sectors, standing at 10%. There is therefore no doubt that the retail sector is having a strong impact on the year on year growth of London-based startups.

The UK has many excellent startup examples across its many market sectors, such as ASOS, the online fashion retailer. Camden-based ASOS has, over the past 15 years, worked incredibly hard to make its mark in the fashion sector, as well as online and has done incredibly well. This is clearly shown by their July announcement of a 27% sales increase.

The simple hailing of a taxi cab has also been transformed recently, with the likes of firms such as Uber revolutionising the way taxis and their hailers operate. This change in mind-set, i.e. the use of apps to book and pay for a taxi, has created a steady growth spurt of 117%, with each taxi operator striving to win (or steal back) customers from their competitors.

New startups now have to become ever more wily and innovative in order to ensure they don’t miss out on their share of the pie, something that Tim Rodber, CEO of Instant Offices notes alongside the increased demand for office space: “The diversity of the firms behind this increase in demand is interesting – but of particular note is the role technology and creative services industries are playing in driving growth in the capital and producing space requirements outside traditional business locations.”

Startups are popping up in every industry and making the most of people’s willingness to give new and different ways of operating a chance. Something which seems to have worked for online real estate company Sellmyhome.co.uk who has harnessed an online-only approach to helping people buy and sell their homes. Mike Freeman sold his house using the service and has nothing but praise for it, stating that: “It opened us up to a wider audience and made it easier for people to view our property. The future is using technology to better support the property market and the first virtual open house just goes to prove the future is online for the estate agency industry”.

Indeed Sellmyhome.co.uk is not the only property business to see such success, with the property sector as a whole seeing an impressive growth increase of 71%. Other startup sectors to see an impressive growth rate include computers and software sales (200%), temporary employment agencies (87%), wireless telecommunications (79%), letting and operating of own real estate (54%), computer facilities management (51%), clothing sales (46%).

The following sectors have also seen growth but all currently stand at between 6-20%: advertising agencies, research & development on biotechnology, mail order and internet retail, IT consultancy, PR and communications agencies.