Ahead of this month’s European elections, with the Brexit deadline further extended until October, the UK’s relationship with the continent is now more uncertain than at any time in the past three years.
It would be reasonable for one to assume that such a persistent and high-level of uncertainty should be a recipe for chaos, yet the drumbeat of bad news that has echoed far and wide since June 2016, has been blocked out by the UK’s fast-growth tech businesses and their founders, as well as European funders.
Research that we released last week shows that British companies secured an unprecedented amount of funding from European venture capital in 2018, with investment approaching £2bn – a 14 per cent increase on the previous year.
In London, the rise of UK fintech proved irresistible, with Atom, Monzo and OakNorth Bank making up three of the top five deals backed by European investment funds in 2018.
With so much cutting-edge technology being originated in the UK, European investors’ interest in the tech scene here extended beyond the confines of the capital. Oxford and Cambridge, the two other cornerstones of the UK’s “Golden Triangle”, also saw an impressive increase in investment from the European mainland.
Of last year’s 120 venture funding deals seen nationally, Oxford and Cambridge were home to nine and six of the recipient companies respectively – second and third after London. Aside from acting as a strong vote of confidence in our regional tech clusters, these figures are a testament to the rich seam of intellectual capital around the UK’s leading universities and research institutions, and the attraction this continues to hold for European investors.
The message from Europe is clear. The Brexit uncertainty does not appear to be a hindrance to backing UK tech businesses, provided there’s cutting edge innovation, access to talent and an ecosystem that supports and enables these companies to thrive and become a success.
It is therefore vital that we maintain these components that make the UK such an attractive investment destination.
The UK’s position as Europe’s tech capital does not rely exclusively on EU membership, but on access to talent. The ability for innovators and entrepreneurs to move across borders and be part of the UK’s startup ecosystem has been key in fostering growth in the sector, and is indispensable to continued success. Whatever the outcome in the coming months, the politicians must ensure that preserving this talent pipeline is imperative.
The Golden Triangle is home to four of the world’s top ten leading universities; Oxford, Cambridge, Imperial College and UCL, with a number of other world-class institutions located elsewhere in the country. This undoubtedly feeds into the success of the UK tech sector. With this in mind it is crucial that the country nurtures future talent by continuing to invest in higher education and supporting the innovation and entrepreneurial approach of the next generation of innovators.
Thankfully, as Westminster stalls, the groundwork is being laid for a bright future with recently launched startup and innovator visas programmes aimed at attracting leading business talent to Britain’s shores. These new visas systems will help ensure the talent pool is made up of the brightest and best, while providing a clear message that the UK remains open for business.
As both the political and tech landscapes shift and evolve, the UK’s tech sector must never take for granted the attributes and infrastructure that has made the country an attractive destination to deploy investment funds. This is vital if the UK is to retain its position as Europe’s tech capital.
Rob Hayes is head of tech at law firm Penningtons Manches