Gerard Grech CEO, Tech City UK @TechCityUK @gerardgrech August 2016
Developing a
Who are we? 1. programmes | 2. policy convening | 3. advocacy
-‐ Founding stage -‐ 20,000+ UK sign-‐ups -‐ 17,000+ in training
-‐ Later Stage -‐ £1.2bn raised -‐ £1.bn on the LSE -‐ 10 acquisitions
Most comprehensive annual analysis of the UK’s Digital Tech Economy
-‐ Mid stage -‐ Mentorship program -‐ £180M+ raised
Accelerating digital growth across North of England
Concierge service for fast-‐growth US tech companies
Dedicated Visa Scheme for hiring digital tech talent
Alliance between the UK’s many thriving tech clusters
3 British Digital Tech Economy is growing steadily
£161Bn
Total Digital Turnover*
+32% than the wider UK Economy
Growing
Source: Tech Na.on 2016 Report, Tech City Uk/Nesta *based on 58K iden.fied Digital Businesses
@techcityuk @gerardgrech
Runway: London/UK has a strong investment/VC eco-‐system In 2015, 5x more VC investment than 2010. >30% of all EU VC money.
UK companies consistently raise >30% of all European VC money
Source: PicthBook/EY May 25th 2016, CB Insights/L&P
UK VC-‐Backed Investment Activity Top Deals & Cities, Q1’16
@techcityuk @gerardgrech
$5B
$13B
$12B
$7B$7B
$5B
$3B$2B
$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
2016)YTD2015201420132012201120102009
Total-VC-Capital-Invested
UK Germany France Israel Russia Sweden Switzerland RoE
Brexit: Tech City UK Survey – 1,205 respondents – 27th June – 5th July 2016 – largest & fastest survey on tech
Top priorities of UK Tech Community post Brexit: 1. Access to Single European Market (by remaining in the EEA -‐ like
Norway) 2. Retention of EU Talent 3. Clarity on cross-‐border Data standards 4. Access to R&D funding post-‐Brexit 5. Access/Attractiveness of UK for investors post-‐Brexit
6. Cost of business (taxes, regulation environment in the UK) 7. Overall economic climate of the UK
Brexit: political & economic upheaval across Europe could cause a little 2016 slow down but growth deals are increasing which is exactly the kind of news we want
More Growth stage deals
Acquisitions & IPOs: Post-‐Brexit
• Twitter acquired London artificial intelligence startup Magic Pony for around $150m (£102m).
• Magic Pony uses machine learning to create high-‐quality videos from grainy footage -‐ will likely be integrated into Twitter's live and video services: Periscope and Vine.
• IPO values the company at £40.8m
• Has raised gross proceeds of £8.5m at a placing price of 100p.
July -‐ $65 million (£49 million) Series C
Late Stage Deals: Post-‐Brexit • UK investment ac.vity star.ng on strong note in Q3 2016 • In just under three weeks, at least $230 million (£174 million) invested to VC-‐backed
companies in over more than 25 deals
August – $275 million (£210 million) Series E
August – $28 million (£21 million) Series E
9
The impact: >40% of European ‘Tech Unicorns' ($1bn+) are in the UK
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47 European Unicorns
19 UK
Unicorns
European tech is growing sustainably on a base of profit and revenue
Deliveroo: latest
Unicorn
3. Rich ecosystem & connected nation
1. Smart capital
2. Strong business & policy environment
4. Creative talent & critical mass of expertise
4 Key growth drivers powering the UK’s digital economy
1. More funds now exist, opening up new opportunities and securing the growth potential of talented teams
Selected Recent UK IPOs
$552M Gross Proceeds
$3,341M Gross Proceeds
$2,042M Gross Proceeds
$597M Gross Proceeds
$580M Gross Proceeds
2,074 2,010
2,536
590
1,672
638 364
318
146
29
0
500
1000
1500
2000
2500
3000
LSEG NYSE NASDAQ SGX HKSE
# of
Com
pani
es*
Source: Capital IQ as of 26th of May, 2016 Source: Capital IQ as of 26th of May, 2016
London Stock Exchange is a hub for international businesses
Source: Bloomberg 2015, EY Tech Trends 2016
Domestic
International
@techcityuk @gerardgrech
8
2. End-‐to-‐end policy conditions for tech growth are ripe
>£2.75 Bn
latest market
Cap
>£1.1 Bn
latest market
Cap
4. Corp Tax: 17% (joint lowest in
the G20)
1. Seed Enterprise Investment Scheme & EIS: 50% relief on
capital gains tax
3. Visas: Entrepreneurs’ Visa, Tech Nation Visa
2. R&D Tax Credits: fueling innovation
5. London Stock Exchange high growth segment @techcityuk
@gerardgrech
UN E-‐Government Survey 2016– UK ranked No.1
• E-‐Government development Index ranked UK No.1
• E-‐Participation index ranked UK No.1
• E-‐government to provide public services through one stop-‐platforms & online transactions
• Ensures that public institutions are more inclusive, effective, accountable & transparent
• Drive towards Open data for public information & scrutiny
• Participatory decision making • Increased effort to utilize electronic and
mobile services for all
3. Rich Ecosystem: >60 UK tech accelerators, >100 co-‐ working spaces & 50+ tech business support orgs
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16
+2.8x 1.56M UK Tech Jobs Jobs growing
41% In non-‐digital industries like educaOon & Finance
Faster than the wider economy
£50K
Average UK Tech salary
+36% Higher than UK average salary
4. The UK’s tech talent pool is growing fast
Source: Tech Na.on 2016 Report, Tech City Uk/Nesta
@techcityuk @gerardgrech
8 The pool is deep & extensive, with international HQs, world class institutes & top research universities
International & EU HQs Technology Institutes World – Class Universities
Impact: 17000+ in training in 20 months
50% <30 years old, 40% female.
Access to Education Access to Opportunity
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38 ROUNDS
£1.5 Bn RAISED
+ £1.22 Bn RAISED FROM 5 IPOs
+ 10 ACQUISITIONS
In the last 20 months…
Good conditions create great companies
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Examples of UK Tech ‘Unicorns’ (Barclays Scale-‐Up UK April 2016)
Company Valuation (date) Total reported equity Funding (Missing data on at least one funding round for each company)
Description
$ 1.0 b (Mar 2015) $195m Online retail for high-‐end fashion boutiques
$1.05b (Apr 2015) $237m Peer–to-‐peer or non-‐bank lending
S1.03b (Feb 2015) $125m App for music, TV shows and ads
$1.79b (Jan 2016) $197m Provides online travel search comparisons
$0.96b (Jan 2015) $ 90m Money transfer service
Disruptive technologies: Advances that will transform life, business, and the global economy – 6 specialisms in the UK
Autonomous Vehicles
Mobile Internet Artificial Intelligence
Automation of Knowledge Network
Cloud Computing
Internet of Things
Why is all this so important? Because we’re building a sustainable ecosystem, driving effective cultural change & global ambition
InsBtutes UniversiBes
Govt. Dept. (naBonal & Inter).
Local AuthoriBes
Investors Entrepreneurs
Corporates
Incubators
Accelerators
Stock Exchanges
Colleges
InternaBonal hubs
@techcityuk @gerardgrech
Developers
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Thank you for listening. Gerard Grech, CEO, Tech City UK Visit our website: Techcityuk.com Follow us on Twitter: @techcityuk @gerardgrech