Brexit hitting London tech investment
Written by Peter Walker
Political uncertainty has had a direct effect London-based tech firms’ ability to access capital, according to new research which has revealed a sharp fall in venture capital investment.
Trade body Tech London Advocates found that 87 per cent of tech firms felt the Brexit process had tarnished London’s reputation as a business centre, while 39 per cent said it had become more difficult to access capital in the capital since the referendum.
One in four of the 200 tech executives surveyed said they had lost out on investment as a direct result of the UK’s planned exit from the EU, with start-up EcoSync stating that a large German venture capital firm pulled out of on a £300,000 investment due to uncertainty about the post-Brexit regulatory environment.
Tech London Advocates founder Russ Shaw commented: “It is no surprise that London tech investment fell in 2018 when so many tech companies are experiencing investors deferring decisions until they see some clarity around Brexit.
“One thing is certain – the political situation is harming our fastest-growing industry and making access to capital and talent harder than ever before.”
Delays in the process were a common problem for respondents, with 23 per cent saying they would prefer things to be resolved quickly. Although, 70 per cent stated they would prefer to stay in the EU, while only 15 per cent were in support of leaving.
Separately, London and Partners figures showed that venture capital funding in London declined to £1.8 billion in 2018 from £2.53 billion in 2017, with 48,000 tech jobs in the capital remaining unfilled, up from 30,000 two years ago.
Shaw said that investors in China and the US were “confused” about Brexit, with the process making it more difficult to attract highly skilled staff from the EU and elsewhere.
Meanwhile, the survey found that while Brexit has boosted the tech business prospects of Paris, Berlin, Barcelona and other European capitals.