More Londoners now work in Tech than Finance

Kingly Brookes, February 26th, 2015 Kingly Brookes

The Mayor of London recently revealed that around half a million people now work in technology-based businesses in the capital.

On Wednesday 11th February, London Mayor Boris Johnson spoke to a room full of startups, investors and media, as part of his six-day tour of the East Coast of America designed to bolster the relationship between London and the US. Arianna Huffington, co-founder and editor-in-chief of the Huffington Post, also joined Mr. Johnson. Ms. Huffington was representing the US media. The event was well timed, with London’s tech sector continuing to go from strength-to-strength. Mr. Johnson also took the opportunity to release figures from London & Partners revealing that London-based tech companies received a record-breaking $795.2 million from US Investors in 2014.

In total London’s tech companies attracted $1.4bn worth of investment in 2014, over half of which came from the US. The increase in these figures over the last couple of years reflects just how much London’s tech scene is flourishing; the industry has received more than two and a half times as much investment than it did in 2012, when it received $296m. 2015 is already looking very promising for a number of London-based tech companies, with fintech (financial technology) company TransferWise securing $58m of investment from a Silicon Valley-based investor and Music app company Shazam has just received a $30m investment from the US. Mr. Johnson also revealed TransferWise will be opening offices in Florida and New York, employing 50 people in the US.

However, it is important to acknowledge that whilst growth prospects for London’s tech scene are looking extremely promising, one of the key reasons Mr. Johnson organised this conference was to encourage US investors to increase their investment into London-based companies. Fast-growing tech companies in the US have received huge investments in recent months and years. For example, US-based Uber, famous for ‘disrupting’ the taxi profession in many different countries across the world, raised a whopping $1.6bn in January of this year. It is currently unheard of for UK-based tech companies to receive investments anywhere near this size. This is something that UK companies are well aware of; a number of owners of these companies who attended the event were quick to point out that it was easier to secure larger sums of funding in the US.

The Chief Executive of London & Partners, Gordon Innes, emphasised the commonalities between the two major cities, especially when it comes to fintech: “As the world’s leading financial centres, London and New York are also leading developments in technology, in particular financial technology… The proximity of our world-class financial services infrastructure to London’s booming tech industry is driving innovation across mobile payments, retail banking and crowdfunding, resulting in dynamic products and apps for a plugged-in, online generation, and a similar story is playing out in New York. It makes sense for our two cities to collaborate further, bringing the next generation of financial products to market.”

Taavet Hinrikus, co-founder of TransferWise, also sung London’s praises: “London has been a great place to start and grow our business. Its status as both a tech and financial hub means we’ve been able to grow the company from just my co-founder and I to a company of 250 employees, processing over £3bn worth of customers’ money in four years.”

 

Kingly Brookes LLP are chartered accountants who work with UK-based startup businesses delivering a range of specialist advice and compliance services. We help technology companies to take full advantage of government incentives designed to reduce the amount of corporation tax that they are required to pay. If you would like to find out more about how we can help your business, please contact Martin Jones on 0207 292 8850 or on martin.jones@kinglybrookesllp.co.uk.