There are innovative fast-growing tech companies spread across the UK but London still employs roughly four times as many people in the tech sector than the next biggest cluster in the country (Bristol and Bath).
Many of London's brightest young startups have based themselves in Shoreditch but there are signs that this part of town will only appeal to the tech community for so much longer.
Don’t get me wrong; Old Street’s 'Silicon roundabout' isn’t a bad place to be based right now if you’re a tech company. The graffiti-covered streets surrounding the roundabout (technically a “gyratory”) are home to hoards of trendy bars, restaurants and coffee shops, as well as a handful of coworking spaces like TechHub, Google Campus and Central Working. It's still considered "cool".
However, the increasing demand for trendy warehouse conversions has led to rising rents and other parts of the city are much better connected by public transport - Old Street station has one underground line (the Northern Line) and a limited mainline service, while Shoreditch High Street is only connected by the London Overground line.
What's more, the "trendiness" of London's neighbourhoods is constantly in a state of flux so what's cool one day often isn't the next.
Could these factors combine soon lead to a mass exodus of tech startups from Shoreditch? Are the next generation of entrepreneurs going to start considering other parts of the city when it comes to setting up their business? If so, where are they headed? Techworld explores the ever-evolving geography of London's tech startup scene.
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King’s Cross and Euston
King’s Cross is in the midst of a multibillion pound redevelopment and global technology companies are taking note.
Facebook moved its headquarters to the area that is served by three major train stations (Euston, King’s Cross and St Pancras) last July, before nearly doubling the amount of office space it has in the area. Meanwhile, Google is building, albeit slowly, a colossal $1 billion (£653 million) campus next to the Guardian Media Group's headquarters behind King’s Cross station. Twitter was also planning to open up an office in the area at one point.
When Silicon Valley giants like these move to an area it’s inevitable that young digital businesses will follow and, as you may expect, there are already a handful in the area, including those based out of the government's Digital Catapult Centre, opposite the British Library and one floor about Techworld's own offices.
Tech-savvy investors, such as European venture capital house Balderton, which has $2.2 billion (£1.4 billion) in total assets, also moved to King’s Cross recently.
The firm, which has profited off the back of a number of tech successes, including Bebo and Lovefilm, relocated from stuffy Mayfair to a converted bus station on a quiet backstreet in order to be closer to where it believes the UK’s next generation of billion dollar companies are likely to spawn.
Suranga Chandratillake, general partner at Balderton and cofounder of Blinkx, the internet video search engine that went public on the London Stock Exchange in 2007 with a valuation of £125 million, said: "As with so many other parts of London and, indeed, Europe, the area has a culture, vibe and pace that is uniquely its own. Kings Cross has a thoughtful influence, from the leafy squares of Bloomsbury, to the nearby universities, and with the British Library and British Museum on the doorstep too.
“There's also a vibrancy and entrepreneurial spirit. You don't have to go far to find lots of locally owned, independent businesses, whether technology-related or otherwise. Also, as a pan-European team, we quite like knowing that a train to Paris is just around the corner."
Many of the companies in Balderton’s 70-strong portfolio, which includes fashion ecommerce platform Lyst (who raised £26 million yesterday) and software provider Nutmeg, will also work out of the new office from time-to-time.
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Several miles east of King's Cross, the Canary Wharf Group is trying to make its skyscraper district (long home to the UK headquarters of giants in the banking world) one of the leading technology hubs in London.
The Canary Wharf Group’s aim of turning the whole area into a leading tech hub got a huge boost earlier this year when Alibaba, China’s take on Amazon, announced it was going to move its UK headquarters into One Canada Square, the tallest skyscraper in the Wharf.
The area’s corporate feel may have deterred startups for much of its life but through the Level39 tech accelerator, Eric Van der Kleij is out to convince founders that Canary Wharf holds potential for startups, particularly if they’ve built a financial technology (fintech) product or service that can be utilised by banks in the vicinity.
Van Der Kleij previously said: "Level 39 is a soft landing for technology companies at Canary Wharf. Beyond that, we can help firms scale up in a very short space of time, moving from say a dozen employees to a hundred, then to a thousand, without having to be displaced from the local area."
He added: "The aim is for us to offer something completely new for London, a physical centerpiece for fintech which complements the other tech clusters across the UK and helps cement London's position as the tech capital of Europe, while helping to return the financial services sector to growth."
The wealthy property developer has plans to build several new skyscrapers in Wood Wharf, a new development springing up east of Canary Wharf that will contain offices and homes, as well as shops and restaurants.
Startups that move to the area, such as eRipple and DataSift, stand to benefit from a more serious image than their rivals in more grimey parts of London, possibly helping them to secure deals with large corporates. Indeed, DataSift counts Facebook as one of its main customers.
South of the River Thames, Croydon is desperate to make a name for itself and one man in particular, Jonny Rose, is doing his best to lead the charge.
He’s been evangelising “Croydon Tech City” since he coined the term and the area has attracted a host of tech companies, partly due to the council’s reduced business rates. Newswire DWPub has been based in Croydon for nearly a decade but younger companies, such as tech startup Loaf, are also choosing to base themselves in the area.
Rose even tried to make a case for why Croydon should get the £50 million Silicon Roundabout investment fund but it would appear as though he has been unsuccessful.
“Croydon is an area of London that has huge potential and will change a lot over the next couple of years as we see the impact of improved transport, capital investment and a growth in residents," said Kit Malthouse, deputy mayor of London for business and enterprise. "The 100 percent relief in business rates will encourage a variety of small businesses that would not otherwise be able to trade in the area. Helping as many people as possible to be as economically active as possible is another way that the Mayor is striving to make Croydon a jewel in London’s crown.”
The outside bet for London's next major tech hub is probably Here East. Unlike other hubs, Here East is a completely new development, currently springing up on the Olympic Park.
Costing £1 billion, Here East is designed to be a melting pot for tech startups and large organisations. It features 1.2 million sq ft of commercial space, a £120 million Infinity data centre, an auditorium, an “innovation centre”, a Loughborough University postgraduate research and training centre, a digital apprenticeship scheme run in conjunction with Hackney Community College and BT Sport's headquarters, among other things.
Here East CEO Gavin Poole claims the East London site - traditionally occupied by factories and warehouses to support the area's once-thriving steel and textile industries - could soon become the UK’s largest technology centre.
“It’s the biggest in the UK and the biggest in London,” Poole previously told Techworld on a tour of Here East, which is currently in the construction phase. “You can’t compare it with anything else. This is a dedicated campus about collaboration and innovation that we haven’t got anywhere else.”
So it looks like the battle for London’s leading tech centre is about to heat up.
Of course, there’s every possibility that several neighbourhoods in London could coexist and thrive in harmony but given the patrioctic nature of the city’s residents, the jury is out on whether this will happen.
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