Quo Vadis - Tech City London Business Executive Briefing Frankfurt 17 th September 2013 Marion Howard-Healy Senior Consultant, BroadGroup
Agenda Origins of Tech City Current status Developments & future outlook Learnings from Tech City
Origins of Tech City
Evolution of Tech City - milestones UK Government in USA Google Silicon on board Roundabout is born Campus born & Central Working 2009 2010 2011 2012 2013 Nr 10 appoint Joanna Shields CEO & Chair of UK Tech City Investment Organisation UK s Ambassador for Digital Industries Nov 2012-41,000 people registered as part of Tech City Initiative Future Fifty Programme Helps biggest start-ups to IPO Growing links to City, UK & internationally August 2013 1,381 companies 5.56M tweets
Tech City location Nearest tube is Old Street London EC1
Grass roots evolution BUILDING COMMUNITY 2009 Silicon Roundabout is born - named by Matt Biddulph of Dopplr 2010 Silicon Milkroundabout developers job fair launched by Songkick 2011 Silicon Drinkabout started by Michael Acton Smith
Fast growing cluster of technology start-ups 2010 200 companies 2011 600 companies January 2012 1,097 companies
Growing UK government involvement November 2011 Downing Street highlighted a 225% rise in the research and development tax credit offered to small and medium sized enterprises, a doubling of capital gains tax relief to 10m for start-up owners and an "Entrepreneur Visa" to help attract talent. http://www.bbc.co.uk/news/technology-15671829
UK government highly pro-active UK Government wanted to create place for entrepreneurs to meet & interact UK Government organised a high level trip to Silicon Valley in 2010 to find big US companies who would commit to Tech City Rohan Silva, Senior Policy Advisor to David Cameron, PM, arranged a meeting with Google s chairman Eric Schmidt and Nikesh Arora, Chief Business Officer at Google
Campus now at the heart of Tech City London Google agreed to build a neutral space and an inclusive community hub Volunteers from Google help start-ups Seedcamp and TechHub run the start-up interaction and space
Campus focus on start ups 10,000 entrepreneurs are members of Campus Typically, 40 events per week open to all E.g. one attracted 15 Chief Marketing Officers of big brand companies Source: www.informilo.com
Seedcamp Seedcamp is an organization to jumpstart the entrepreneurial community in Europe by putting the next generation of developers and entrepreneurs in front of a network of company builders; including seed investors 28 Angel investors 24 Institutional investors including Bertelsman Digital Media Investments Invests in 20 start-ups globally each year Since 2007, invested in 90+ of Europe s Most promising start-ups http://www.seedcamp.com/companies
TechHub TechHub creates spaces around the world for tech entrepreneurs to meet, work, learn and collaborate https://www.techhub.com
Central Working set up on Campus - a place to start your business We ve created a club that s about business people interacting and finding ways to grow and develop together. Having a desk is almost incidental to our business model. James Layfield, CEO Central Working http://www.zipcar.co.uk/smarter-business-blueprint/videos/central-working-james-layfield
Other global brands have followed Google s lead and established a presence in East London Amazon Microsoft Intel Cisco Yammer McKinsey Qualcomm For the listing of new/start-up companies in Tech City London See http://www.techcityinsider.net/companies-list/
2013 Creating an international brand Joanna Shields - ranked #1 in the Wired Top 100, 2011 Britain s digital power list CEO & Chair of UK Tech City Investment Organisation UK s Ambassador for Digital Industries When I got a call from Number 10 to take on the challenge to champion entrepreneurship and help create a high-growth technology powerhouse in Britain starting first with Tech City in East London I jumped at the chance. In 1H 2013, as UK Ambassador, travelled to Europe, Israel, UAE and USA
Credentials to lead Tech City Impressive business experience in Silicon Valley By 1998, CEO of a media-streaming start-up called Veon Moved to UK in 2000 to run Real Networks International Google s Managing Director of Syndication and Partnerships for EMEA CEO at Bebo and arranged its sale to AOL-Time Warner for $850 million in March 2008 Was VP & MD EMEA at Facebook when it went through flotation Working with European governments through her job at Facebook
A key link between start-ups and UK government Shields has successfully built up some of the world s most famous brands and is seen to have developed the winning formula in the private sector. Now aiming to replicate this success in a publicly funded body. London Evening Standard Tasked with turning London into Europe s digital capital Shield sees the advantage of London as everything in one super-city compared with US where technology is Silicon Valley and Government is Washington Tech City as a group of neighbourhood communities in East London but there is a wider vision to look at innovation and support growth companies across the UK, using Tech City as a focal point For more, see interview with Joanna Shields at Le Web London, June 2013 http://www.youtube.com/watch?v=gjdal16zroy
22 Tech Clusters around UK includes Media City in Manchester Growing digital clusters in Bristol, Aberdeen, Middlesbrough & Gateshead Cambridge the UK s earliest Tech City September 2013 1,575 companies 13bn revenues 57,140 employees
Broadband rates vary across London and UK July 2013 - Everything Everywhere (EE) launched 80Mbps 4G mobile broadband in Tech City London EE also plans to give the UK a 4G network that is unrivalled in Europe - faster than the U.S. and Japan, and equal to the world's fastest speeds in South Korea - SK Telekom launched its LTE-Advanced network in July 2013 which has a 150Mbps transfer rate = 800MB movie downloads in 43 seconds EE has launched its 4G network in 16 UK cities and 12 of those are now set to get the double-speed boost to reach a theoretical maximum top speed of 150Mbps. Realistically, there is a long way to go. National fixed broadband UK average speed is 12Mbps and is often a post code lottery even in big cities e.g. in London EC2 users experience 5Mbps
Tech City Today
Inventing the future - Tech City as it sees itself today http://techcity.io/
Benefits of developing Tech City Becomes base for international tech companies Boosts home grown talent Boosts national economy Has a positive impact on the wider business community which finds new ways to capitalise on this
Growing links to the City of London First 9 months 2012 the telecom, media and tech sector acquired nearly 1 million ft² in the City an increase of 39% on same period 2010 This was more space than financial & insurance sectors combined See also August 29 th 2013 update at http://techcitynews.com/2013/08/29/tech-firms-lead-3rd-year-as-largest-source-of-office-space/
Outlook and development for Tech City
Biggest barrier to start up growth is financing Zipcar polled 1,296 StartUp Britain members to uncover how start-ups are rewriting the rules of businesses. Our findings were compelling. http://www.zipcar.co.uk/smarter-business-blueprint/market-research#slide-5
From seed money to IPO, London is becoming a more attractive place for start-ups Venture capital firms E.g. Accel Partners, based Silicon Valley, The investor in Playfish which was sold to Electronic Arts Former staff in Playfish London office have either themselves started or are working in 20 other start ups in London E.g. Atomico, Balderton Capital, Index Ventures, Advent Venture Partners and DN Capital Early stage funds E.g. Connect Ventures, Hoxton Ventures Business angels Seedcamp
Tech City strategy 2013 Help new companies to grow and either be acquired or listed independently Prevent companies leaving to look for US buyers We don t want to see companies leaving. We want to see them get acquired by a British company or we d love to see them hang in there, list and stay independent. Joanna Shields
Help with London listing for new companies March 2013 - London Stock Exchange created a high growth segment aimed at fastest growing technology companies It allows these companies to issue shares on the stock market without relinquishing too much control of the company too early Previously, liquidity was the big issues. The amount of equity you had to give up was really high, it was 25 percent. Now you only have to float 10 percent. Joanna Shields, CEO Tech City
Future Fifty programme 25 April 2013 Joanna Shields and Chancellor George Osborne launched Future Fifty We want to make London the place where people list. A new programme that provides the expertise and guidance needed to get 50 of these big growth companies ready for IPO. Companies like Unruly Media Nr 13 on Deloitte s Technology Fast 500 6,695% growth in 2012
Who qualifies for help? Available to companies from the UK and the EU, as well as UKcontrolled foreign companies Selected from sectors: High tech, retail, finance, fashion, food and design Applicants must have been trading for at least two years with revenue growth of at least 100 per cent year over year
Future Fifty a range of measures Tailored support from UKTI s Overseas Market Introductory Service, which spans 96 posts throughout the world Access to International Trade Advisers and priority placement on trade missions and business delegations Mentoring from world-class organisations, including law firms, banks and accountants to provide guidance on corporate governance and preparing businesses for the public markets Advice on immigration issues, including the Tier 1 Graduate Entrepreneur Visa and Exceptional Talent routes A year-long programme of promotion, events and engagement to help reach investors, suppliers and customers and to help attract top talent
Showcasing Tech City London in USA Official Tumblr of the British Embassy in Washington & our offices throughout the US. Showcasing what makes Britain GREAT and celebrating the UK- US relationship http://ukinusa.tumblr.com/post/43573177144/the-interactive-tech-city-map-highlights-the
International competition persists & grows Silicon Valley In the top 3 universities in Northern California 20% students start a business whilst at University 40% student working in a start-up within 2 years of leaving University Berlin Start-up scene is maturing Companies like Rocket Internet http://www.zdnet.com/the-war-of-the-european-tech-hubs-is-berlin-really-stealing-londons-thunder-7000019611/ Dublin 142 foreign companies expanded or launched in Dublin in 2012 Dropbox opened international HQ in Dublin in January 2013 Google EMEA HQ since 2002
The world s largest Internet incubator is in Berlin l http:// Founded 2007 in Berlin 25 international offices in all 5 continents Operational reach: 50+ countries 75+ active independent portfolio companies, many of them in multiple markets
Learning from Tech City
The economic importance of digital clusters - Example Has produced 10 companies valued at more than $1 billion and two valued at more than $10 billion ARM, Autonomy. In total, at least 50bn of market capitalisation has been generated by the Cambridge cluster The top 50 companies have hired 5901 people in 2012, an increase of 23.2%, and have grown their revenues by 1.3bn, and increase of 17.6% Gross Valued Added to the economy per job is 45k, compared with London s 34.2k (2009) Unemployment in Cambridge is 2.1%, compared with UK average of 7.8%
Companies need to raise their digital IQ or fall behind The core of the ecosystem for innovation has moved from inside the firm to out in the marketplace. John Sviokla, Partner, Strategy & Innovation, PWC
Key factors about Tech City UK Broadband, connectivity, data centres. and a lot more Communities of collaborative working, networking and interaction Nurturing youthful entrepreneurs and innovative companies - shared resources, lean business models Support from established companies mentoring, a two-way street Developing financial eco-systems from start up to IPO Financial incentives and focused programmes to promote growth Brand marketing and internationalisation Currently great support from the very top of UK Government
Personal reflections after visiting Tech City Campus Vibrant business environment has been created by young people Opens up thinking for new ways forward for business and consumers Use of high tech changes people, processes & how people work Young people think differently from established organisational cultures New world focus is on collaborative partnerships - not competition You + You = MORE Campus café community working drives lean business models No office of your own Multi-sided conversations breeds new ideas fast Drives shorter times to market Creates new forms of business energy to make innovation happen in both start ups and collaborative partnerships. CAN DO attitudes Start ups partnering with large blue chip companies and academic institutions to inject new ideas, projects building the digital economy
Quo Vadis - Frankfurt Digital Hub e.v? What is the most appropriate model to build on for the future? Does Frankfurt link into start up city like Berlin? Technology Clusters around Germany? Connecting, interaction, mentoring? Supportive government & policy?
Thank you Email: marion.howard-healy@broad-group.com Mobile: +44 7811 358836 www.broad-group.com www.datacentres.com
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