Unicorns are on the loose in London – and they’re spreading across the city.
As a barometer of the capital’s rapid growth, consider this: the UK has produced more billion-dollar valuated companies (unicorns) than any other country in Europe. In fact, 17 of the 40 European tech companies that claim the coveted title of “unicorn” come from British shores, with a further 13 calling London home to their humble roots. To put this in perspective, that’s more than the total in Sweden and Germany put together (two countries which, it should be noted, each boast their own impressive portfolio of tech start-ups).
London has emerged as the outright leader in Europe’s burgeoning tech industry, appealing to aspiring entrepreneurs and daring venture capitalists who boast deep pockets and even deeper ambitions. Fuelled by new-found optimism, investment has soared, business accelerators have flourished and government policy-makers have backed measures to propel the tech industry forward.
With all of this collaboration comes innovation. London-based unicorns like Asos, JustEat and Transferwise have caused considerable disruption in their respective industries. However, while these hero stories serve as mouth-watering inspiration, the competition to follow in their footsteps is fierce, with nearly 40,000 tech businesses headquartered in central London alone (according to research from Stirling Ackroyd).
At the vanguard of this tectonic shift sits Silicon Roundabout, London’s “Tech City”. Originally located in the immediate area surrounding Old Street Roundabout, Tech City has grown to encompass larger swathes of the East End, including the edgy, start-up friendly Shoreditch. Since Tech City’s birth in 2010, venture capital investment into tech start-ups has increased tenfold, a staggering indication of the market’s growth. Clearly, we’re witnessing a profound transformation in the landscape of London business. Yet, with all the excitement and fervour, naturally some begin to wonder – can London one day challenge Silicon Valley as the world’s centre for tech innovation?
The short answer: no. While these accolades are admirable, let’s not forget that Silicon Valley has produced (and continues to produce) some of the world’s most formidable tech giants. Uber, Airbnb and Snapchat account for a collective valuation of over $100bn – not too shabby. As a consequence, London still plays second fiddle to San Francisco’s South Bay.
However, that’s not to say that London can’t carve out a niche of its own. In fact, we’re already beginning to see how technology can intersect with other industries. London, known for its love of fashion, is now leading the charge in the thriving “FashTech” industry. The world’s first major FashTech Summit will be hosted in London on April 13th - 15th, a showcase of the talent and flair on display in London’s tech industry. As a hotbed of innovation, look for London to spearhead the evolution of tech for all of Europe.
While London’s tech scene has progressed from strength to strength, danger may be lurking on the horizon. Critics are awash, claiming the tech industry is teetering on the edge of a rocky precipice. Some analysts look to the fact that tech firms now account for only 14 percent of IPOs (the lowest number since 2008) as a sign that the red lights are flashing. Whether or not these fears materialise is a matter of debate; ultimately, no one can predict the future of a market that has been historically volatile.
However, despite the gloomy forecasts, with 2016 under tow, the industry shows no signs of abating any time soon, and, when you hop off the Tube at Old Street Roundabout and step into the crisp, early-spring sunshine of Tech City, that timeless scent of entrepreneurial spirit still hangs heavy in the air.