East London is becoming one of the world’s great technology centers, a so-called Silicon Roundabout filled with high-growth, innovative companies. Between 2009 to 2012, East London’s tech/digital sector accounted for 40 percent of job growth in this area throughout the U.K. Overall, the number of tech/digital companies in London has nearly doubled from 50,000 in 2009, according to a Tech City report.
Meanwhile, European venture capital investment is creeping up, with a 4 percent increase in deals to 995 and a 7 percent jump to $6.4 billion invested in 2013 through the third quarter compared with the same period in 2012, Dow Jones figures show.
Some of the new funds include Amadeus Capital Partners with a $75 million fund, Hoxton Ventures with $40 million and Dawn Capital at $124 million. European fund of funds Silicon Valley investors are showing up in London too, such as True North Ventures. Feeding the venture pools are funds of funds including the European Investment Fund that has committed $6.2 billion into 260 VC funds, according to Mathhias Ummenhofer, head of venture capital at EIF.
The next turning point could be to bring in more corporate venture investors. Chinese tech titans such as Huawei are already investing heavily in research and development operations in key U.K. universities, points out Huawei VP-Western Europe Tim Watkins.
Accelerators and incubators already abound in London, just like they do in other tech hubs we’ve explored in Hong Kong and San Francisco. Technology entrepreneur Eric Van der Kleij, who heads up accelerator Level 39, says the space on a top floor of Canary Wharf is filled and another level has been added to house those who have outgrown the facility. Some 500 businesses have applied to set up at Level 39, he notes.
Others worth noting are TechHub at Google campus in Shoreditch. Microsoft Ventures too has made London one of its key accelerator hubs globally, with others running in Bangalore and Beijing.
What’s still lacking is a high-profile example of a U.K.-based startup that has recently broken through and succeeded. As a journalist at Red Herring during the dotcom era, there were some. But few now. That could have something to do with the British culture of playing down successes, but it also has to do with a work ethic and entrepreneurial drive that don’t quite measure up to what I’ve observed in Silicon Valley and Asia’s emerging markets.
Silicon Dragon is in London this week to do more exploring of this theme. See related Forbes post on UK tech startup XMOS, and stay tuned for more news from our Level 39 VC and tech event this Friday.