The 'compelling' reason why Europe's unicorns are choosing London

London is home to more $1 billion-plus companies than any other city in Europe, according to a study released last week.

Published: Fri 8 Mar 2019 08:47 CEST
The 'compelling' reason why Europe's unicorns are choosing London
Photo: London & Partners

With 13 businesses surpassing that valuation mark, the UK capital has nearly twice as many unicorns as its nearest European competitor Berlin, and more than Amsterdam, Paris and Stockholm combined. 

The findings by technology and investment firm GP Bullhound also revealed that the UK as a whole is home to 20 unicorns, nearly one-third of the 64 $1 billion-plus companies across Europe. 

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London’s crop of unicorn firms is led by fintech sector standouts like TransferWise, Revolut and Monzo, with gaming and AI companies like Improbable and BenevolentAI also making the list. 

Photo: London & Partners

“London is the beating heart of the European tech scene and it is great to see so many unicorns currently based here, along with several contenders that are likely to hit the status next,” Manish Madhvani, the co-founder and managing partner of GP Bullhound, said. 

The investment firm suggested that London’s best days may still be ahead of it, as every fourth billion-dollar companies created in Europe in the next few years is expected to be based in ‘The City’. Among the firms tipped to achieve unicorn status soon are fintech companies like Starling Bank and SumUp, as well as cybersecurity firms Onfido and Callsign. 

“The challenge now is for London unicorns to kick on, and crucially for investors to back them with increased resources so that they can challenge the dominance of Silicon Valley, which will lead to Europe securing its first tech titan of a valuation of over $50 billion,” Madhvani said. 

Starling Bank CEO Anne Boden said that London is well positioned to take on that American “dominance”. 

“London has something that Silicon Valley never had: in addition to a thriving tech community and an entrepreneurial culture, it is also a big financial centre. This makes for a compelling combination,” Boden said. 

“London’s success as a fintech hub should also enable it to spread wealth beyond the capital city throughout the UK and the wider economy,” she said. 

Photo: London & Partners

Recently-released figures from fDi Markets, a service of the Financial Times, show that there is plenty of outside wealth pouring into London. The city attracted more foreign direct investment (FDI) than any other place in the world last year. According to the figures, some 453 projects at 420 different companies across the city attracted foreign funding in 2018. That made London the world’s top destination for FDI, beating out cities like Singapore, Dubai and New York. 

This is far from a new development, as the fDi Markets figures also showed that London was the top destination city for FDI during the ten-year period of 2008 through 2018 and the only city to have more than 4,000 individual companies that attracted foreign funding. 

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During that same period, 740 financial service firms set up operation in London, creating nearly 26,000 jobs, while the 822 companies within the information and communications technology (ICT) and electronics sectors that established operations in London brought an estimated 27,000 jobs to the city. 

The world’s largest tech companies have also made significant long-term investment plans in London, with Apple, Google, Facebook, LinkedIn, Amazon UK and Spotify all having announced recent expansion projects in the city.

Laura Citron, the CEO of the Mayor of London’s official promotional agency London & Partners, said the foreign commitments “show that London is open to investment and talent from all over the world.”

Citron also welcomed the unicorn findings, saying they are proof that “London is a top place to start, grow and scale and international business.”

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“From Artificial Intelligence to fintech, London is home to lots of exciting companies that are leading the way in developing innovations and ideas to change the world. London’s business community is truly global, built on the values of diversity and progressive thinking,” she said. 

This article was produced by The Local Creative Studio and sponsored by London and Partners.



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