UK technology firms turn to Silicon Valley to ward off Brexit blues

Industry leaders from the north of England have embarked on mission San Francisco to woo top dealmakers in the US 

Theresa May’s article 50 letter might have dominated the front pages in Britain but it was met with a shrug in San Francisco, where 30 tech leaders from the north of England recently embarked on a four-day mission to woo, impress and tempt cash from Silicon Valley’s top dealmakers.

Anxiety over the future of Britain outside Europe has not, it seems, spread to the home of Facebook, Twitter and Google.

“Investors here just don’t know what Brexit means yet,” said Gerald Brady, managing director of the multibillion-dollar lender Silicon Valley Bank.

However, that is not stopping EU27 countries from making furtive attempts to lure British entrepreneurs overseas.

“Other European countries are trying to attract talent by saying, ‘Hey, come to Ireland, or Holland or Germany because we’ve got free movement of people and if your number one issue is talent, we’re gonna be able to help you get engineers.’ That’s happening today,” Brady said.

Matt Haworth, the co-founder of Manchester-based “tech for good” agency Reason Digital, said he and other entrepreneurs had been targeted with Facebook adverts from authorities in Estonia and Transylvania since Britain voted to leave the European Union.

But it will take more than that to lure Haworth and others away from northern England, where a rapidly growing technology sector has led to a boom in investment in Britain’s former industrial heartlands.

Investment in northern tech businesses reached a 10-year high last year at £327m, up from £20m in 2007, according to the government agency Tech North, as startup clusters developed in Manchester, Leeds, Sheffield and the north-east. Sunderland, which is about as far removed as you can get from Silicon Valley, has the fastest-growing digital turnover in the UK behind London, according to Tech City UK.

GP Bullhound, an investment bank, says the north now has 12 tech “unicorns” – that is, companies valued at more than $1bn – which is more than Sweden or Germany. They include some of the UK’s biggest tech businesses, such as the software giant Sage and The Hut, the online retailer with an annual turnover of £335m.

Northern tech businesses received a further boost recently when Virgin Atlantic launched its inaugural flight from Manchester to San Francisco, the first direct UK route outside London. Entrepreneurs hope it will tempt US investors to look outside the capital, where tech companies received £1.4bn of the £1.9bn invested in the industry last year, according to the mayor of London’s promotional firm London & Partners.

The northern tech scene might not be under threat from Brexit, but there remains significant barriers to competing with London. Founders complain that UK investors are far more risk-averse than their US counterparts, stifling the growth of young companies. Scott Fletcher, the founder of IT firm ANS, believes Manchester’s wealth of former Premier League footballers, such as Gary Neville, should open their chequebooks to the region’s top tech-talent.

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Source: The Guardian

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