The tech scene in London is flourishing more than ever before, to hear them tell it. Just trust the loudest man in the room.
So preached Mayor Boris Johnson, at least, on Wed., to a gaggle of startups, investors and media. The event, another stop on Johnson’s six-day barnstorming tour of the East Coast of the U.S., tried to pull out all the stops to impress upon its American (and expat British) crowd that this is true. Arianna Huffington was onstage representing Big American Media (though she’s a University of Cambridge grad). A U.K. bank launched a new accelerator program; a startup announced its Series A funding. The event, efficiently hosted by Johnson’s London & Partners promotional group, Tech City UK and the Technology is GREAT campaign, was packed.
But for the lyrical Johnson–who invoked Prometheus in his speech about new technology and was on his way to make nice with former Secretary of State Hillary Clinton, whom he once described as part-Lady Macbeth–the hoary old line from Shakespeare, “The lady doth protest too much, methinks” might have been more fitting.
Despite the sizzle numbers of growing tech jobs and investor dollars pouring in, the London tech community appears to be feeling growing pains. And it threw an entire large press event to tell you why.
The growth, at least, appears significant. More London residents now work in technology than they do finance, Johnson told reports Wed., about 500,000 in all. London startups attracted $1.4 billion in venture funding in 2014, more than half of it coming from U.S. investors, who pumped in nearly $800 million (a new record). Accel London partner Fred Destin was there to embody the trend, and startup Digital Shadows announced $8 million in funding from Storm Ventures, a Silicon Valley firm, to begin working in New York City and San Francisco, too. “London was the best city in the world for us to set up in,” CEO Alastair Paterson told the crowd.
All positive–but small. By comparison, the U.S. tech industry’s current private behemoth, Uber, raised $1.6 billion in a debt offering in Jan. that exceeds all venture funding to London companies for the year. Though smaller than their West Coast counterparts, New York City startups raised more–$1.37 billion–in the third quarter of 2014 alone, according to CB Insights. Visiting attendee companies at Wed.’s events spoke eagerly of opening U.S. offices in large part to get more attention from the fatter checks being written on this side of the pond. The funding they’re looking for tended to be a lot more than the single-digit millions that Digital Shadows, the event’s poster child, just scored.
“The reasons you typically hear–less funding, fewer big exits–are true,” says Taras Chaban, CEO of London fintech company Sybenetix, who says the London financial tech sector has had one recent notable IPO. “Investment is smaller, but it’s growing.”
London’s position as a banking capital of the world, Chaban argues, makes it a natural location to find talent from different backgrounds and nationalities (he’s originally from Ukraine). And financial tech, or fintech, had pride of place at Mayor Johnson’s showcase. Barclays took stage to announce The Barclays Accelerator, a program for fintech startups powered by Techstars and taking submissions starting March 1 for a class scheduled to demo its creations by Oct. 2015. The program’s been a success for Barclays in London, leading it to export the idea to the finance-minded entrepreneurs in New York.
For startups in finance, as well as media and fashion, London’s great size and location as the gateway to Europe makes it competitive with the best in the U.S., says Neon Labs CEO Sophie Lebrecht, a London native. “Silicon Valley before was full of deep-tech companies like Oracle and HP. Now startups want to serve those sectors, and they need to be close to their customers.” Which is why Lebrecht, who runs Neon Labs from San Francisco, found herself at the event on Wed. in the first place: Many of her customers are in New York.
If London’s awkwardness in pitching its own tech community sounds familiar, it’s because New York techies are often guilty of the same thing. Despite plenty of signs of growth of its own, New York is guilty itself of playing the little sibling, relatively light on big-time exits and runaway hits. It’s not just London. Any tech hub can look small compared to the sheer history and scale of Silicon Valley, home to Apple, Google and Facebook, with its talent pipeline from Stanford University, its venture firms lined up on Sand Hill Road like spaces on a Monopoly board.
The next step in London’s tech evolution may be growing into its recent success enough not to look like it’s just trying this hard.
“London is going absolutely gangbusters in tech right now,” Johnson told the crowd. But Huffington closed the keynote panel by invoking the Greek legend of Icarus: Youthful and eager to prove himself, Icarus ignored his father’s warnings not to fly too close to the Sun on waxen wings. You know how the story ends.
This article was written by Alex Konrad from Forbes and was legally licensed through the NewsCred publisher network.