Innovation Capital Advisors

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London’s tech scene - the place to be for investment

November 2nd, 2015

London’s tech scene has been booming and continues to do so. The excellent mix of people, innovation and capital has created the ideal conditions for accelerating new businesses to grow and expand at a continually increasing pace. According to recent data from London & Partners, London’s technology companies have raised £1bn so far out of a UK total of £1.4bn. When compared to last year’s total of £1.3bn, it is understandable why London leads the way in Europe for being the place to be for tech companies.

So where has the money gone so far? There have been a number of headline investments including Shazam ($30m), Transferwise ($58m), Funding Circle ($150m), worldremit ($100m), Blippar ($45m) to name but a few showing that great companies are originating from the flourishing start-up scene that London has.

Where has the money come from? Interestingly, in 2014 around half of the investment into London’s tech companies came from the US ($795m) which was 2.7x the amount in 2012 ($296). They are certainly catching the attention from abroad meaning that innovation and caliber of the companies is world class. In fact, Japan has also been taking a keen interest with a number of deals over the past few years...

From a domestic perspective, London offers a wide range of funding depending on the stage and nature of the business ranging from venture capital, family offices, high net worth individuals, creative debt providers, venture debt, bank debt etc. What we are hearing from our conversations with investors is that everyone is busy but also happy to look at quality businesses meaning that capital is definitely available. The question then becomes how you access it, efficiently.

If you are in FinTech, then there is really good news as this sector alone has attracted a total of £362m of investment this year, already surpassing 2014’s total of £318m. London is white-hot with FinTech companies as some of the larger deals quoted earlier demonstrate. If you are not in FinTech, the rest of the £1bn that has been invested so far is across a number of sub-sectors so a business in a big market, with a great team and high growth commercial traction, is still the recipe for success with investors.

How to get hold of this money? Raising capital is hard for a team building a business as it can be a huge distraction for the team which should be focused on the day-to-day running of the company. Moreover, in the early days it is not just about the money and valuation - it is about having investors that ideally can add value, from opening doors to potential new customers to helping attract and build the best teams to grow your business.

At ICA we know the importance of this and have successfully helped many clients not only navigate through the increasing number of sources of capital available but also helped bring on board investors and create partnerships that will give the company the best chance of executing its strategy. If you are building a business that has significant growth potential please get in touch as ICA can help you get the best partners to help you succeed.



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