young founders mentoring session

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


$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


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



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


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


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


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


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


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


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