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Gerard Grech CEO, Tech City UK November 2016 @TechCityUK @gerardgrech
Developing a Agenda: -‐ National context
-‐ Success stories
-‐ 4 key drivers of digital economy growth -‐ Why is this all so important?
Who are we? 1. programmes | 2. policy convening | 3. advocacy
-‐ Founding stage -‐ 12,000+ in training -‐ 50% want to start their own business
-‐ Later Stage -‐ $3bn raised -‐ 10 acquisitions
Most comprehensive annual analysis of the UK’s Digital Tech Economy
-‐ Mid stage -‐ Mentorship program -‐ £200M+ raised
Accelerating digital growth across North of England
Concierge service for fast-‐growth US tech companies
Dedicated Visa Scheme for hiring digital tech talent
Best practice mini reports to share learnings
3 British Digital Tech Economy is growing steadily Tech Nation 2016 Report
£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
Recent OECD/McKinsey report (Aug 2016) puts UK in top ranking on digital share of economy; a great place to build form
Acquired by News Corp in 2015 – example of traditional industries being transformed by disruptors
Acquired for £114million
News Corp harnesses Unruly to: • Bet big on mobile and video
-‐ launch a new vertical video ad format purpose built for mobile audiences
• provide new insights to its adver.sers and improve ad engagement
400 employees in: New York, Edinburgh, Glasgow, Orlando &
Los Angeles
Fanduel Web-‐based fantasy sports game and the largest daily fantasy sports company in the industry. As of April 2016 most U.S. states consider fantasy sports (including daily fantasy sports) a game of skill and not gambling.
@techcityuk @gerardgrech
Finance & Fintech: Nutmeg Nutmeg provides low-‐cost online wealth management makes investment expertise accessible to millions of people who usually couldn’t afford advice
@techcityuk @gerardgrech
MagicPony London based Artifical Intelligence company – uses neural networks – systems that are designed to think like human brains
Twitter acquired Magic Pony Technology to provide expanded data for images, used to: • enhance a picture or video taken
on a mobile phone • help develop graphics for virtual
reality or augmented reality applications.
June 2016 $150 million
deal
Deliveroo Raised another $275 million in funding, a Series E investment -‐ values the company at around $1 billion. The investment will go into growing its service in both new and existing markets & investing in its new initiatives -‐ includes a new B2B remote kitchen service, RooBox -‐ gives restaurants access to delivery-‐only kitchens in key locations
Live in 84 cities
Facing heat from competitors -‐ targeting the higher end of the prepared food market – rivals include Uber, which has stormed into Europe with UberEATS, as well as others like Delivery Hero, Just Eat, and Amazon
Farfetch Platform for luxury brands and boutiques from around the globe, everywhere from Tokyo to Toronto, from Milan to Miami. Farfetch was founded in London in 2008 by the Portuguese entrepreneur José Neves and now has offices in nine countries globally.
TransferWise Banks and other providers oVen add markup to their exchange rate -‐ TransferWise transparently displays its fee upfront and deducts it before conversion
Latest funding values TransferWise at £750 million
12
The impact: >40% of European ‘Tech Unicorns' ($1bn+) are in the UK
@techcityuk @gerardgrech
47 European Unicorns
19 UK
Unicorns
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 36
4
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
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
82. End-‐to-‐end policy conditions for tech growth are ripe Regulatory environemnt is key
>£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
3. Rich Ecosystem: >60 UK tech accelerators, >100 co-‐ working spaces & 50+ tech business support orgs
@techcityuk @gerardgrech
24
+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
8The pool is deep & extensive, with international HQs, world class institutes & top research universities
International & EU HQs Technology Institutes World – Class Universities
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
@techcityuk @gerardgrech
Why is all this so important? We need to create a sustainable ecosystem and future-‐proof the economy and controibute to making it more resilient & productive.
InsDtutes UniversiDes
Govt. Dept. (naDonal & Inter).
Local AuthoriDes
Investors Entrepreneurs
Corporates
Incubators
Accelerators
Stock Exchanges
Colleges
InternaDonal hubs
@techcityuk @gerardgrech
Developers