Last year British tech companies raised a staggering £6.7bn in investment – more than the rest of Europe combined. London is now recognised by the likes of PwC as one of the world’s top Cities of Opportunity; in fact, excluding the US, more tech start-ups go public or are acquired in the UK than anywhere else in the world.
The completion of Traveler’s £375 million pound acquisition of Simply Business (the UK’s largest online business insurance broker) last month is just the latest high-profile example of a UK company gaining traction in the global marketplace and, ultimately, being acquired by a US-based business.
But can the UK retain its status as a hub for successful businesses – and can the UK start-up scene compete with that of the US?
To begin to answer this, we must first understand the essential role that the cloud has played in enabling UK start-ups to be both flexible and ambitious, and how, by nurturing a culture of creativity, the UK has become such a hotbed for technology start-ups.
Make some noise
In recent years successful start-ups have become commonplace in the UK; their stories have not only left a lasting impression on the world’s perception of the UK but also reveal an interesting common thread among these businesses.
Deliveroo demonstrates this point in practice: founded in 2011, the brand has become a household name in a very short period, operating in over eighty-four cities worldwide. Deliveroo realised that it could use the power of software to create an innovative solution to the challenge of delivering food to its customers more conveniently than the competition, and in doing so helped to reshape the food delivery market.
Deliveroo’s appreciation for cloud software as a creative tool is not itself unique; it is instead reflective of an attitude which countless successful UK start-ups have adopted.
Fintech start-up Monzo has only founded two years ago but finds itself on a similar trajectory to Deliveroo (albeit in an altogether different market). The company’s tagline, ‘it’s time for a new kind of bank’, reflects the mindset that has helped to make it a success.
Unlike conventional banking, almost all of Monzo’s operations run through mobile applications. Just a few years ago the prospect of such an unconventional bank being issued a UK banking licence would have seemed highly unlikely. And yet, this April, Monzo’s licensing restrictions were lifted, and the bank can now offer its customers a full UK current account.
Reach for the skies
This change of attitude is significant because it reveals a subtle, but crucially important, shift in the way in which disruptive, software-heavy technology is being viewed.
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Looking at the recent Simply Business acquisition reveals how this new attitude is bringing more success for UK start-ups. Speaking of the £400 million move Alan Schnitzer, Travelers’ CEO, explained that “technology and innovation [are] driving customer preferences and expectation.” Schnitzer argues advancing a company’s digital agenda to better serve customers is “a key strategic priority.”
Companies today are beginning to understand the importance of agility and innovation. As Simply Business’ acquisition attests, this insight has been realised during a peak period for UK start-up acquisitions. This isn’t a coincidence, these companies have recognised the role the cloud can play in helping them to adapt to changing customer preference with speed and agility.
The cloud has empowered businesses like Monzo, Simply Business, and Deliveroo to create innovative solutions through which to better engage with the customer. Through their creativity, these start-ups have frequently caught the eye of bigger brands and potential investors.
Communication is key
Specifically, the old mantra that ‘communication is key’ holds true here – businesses are using cloud platforms to help put communications at the very heart of their business. By doing this, they have been able to drive meaningful interactions with their customers. In an increasingly digital age, the importance of this cannot be understated. Today’s digitally-savvy consumers increasingly expect their communications to be both instant and secure – regardless of the platform, they’re using.
Once upon a time, even the most well-established and well-oiled brands would struggle to achieve both of these goals simultaneously – the cloud has changed this.
No longer do start-ups need huge-budgets and lengthy timelines. By working closely with developers, these UK companies have created flexible and responsive interfaces with their customers, which can grow with the company and evolve as customer preference does.
The growing opportunity
The UK has always strived to be a welcoming, accommodating home for young tech companies – it’s the only G8 member with a Tech Nation Visa, and it also offers attractive tax cuts for start-ups.
It has become enveloped in a culture of exploration and experimentation – a perfect setting for the developer in today’s cloud-centric markets. The UK represents somewhere where developers are allowed, and often encouraged, to put the onus on being creative. In nurturing this unique culture, the Silicon Roundabout in London has the chance to become a true one-of-a-kind setting in which the brightest and most daring minds can work.