London’s tech unicorns generate the highest number of startup spinouts in Europe, new data shows, in signs the capital’s biggest firms are laying the groundwork for the UK’s long-term success in the sector.
As many as 185 startup spinouts have been created from 27 London unicorns, according to a report released today by venture capital firm Accel, 20 more than that produced in Berlin and nearly 50 more than the number made in Paris.
Fintech Revolut tops the London list with 26 spinouts, followed by takeaway app Deliveroo with 24 spinouts and money transfer service Wise with 22.
Accel partner Harry Nelis told the Standard: “For every big company now you can create the seeds of seven other companies. That is a flywheel that should both sustain the ecosystem but should grow it as well.
“We’re at a point where the european ecosystem now has the same benefits that Silicon Salley has had for decades.”
The report comes amid a turbulent time for the tech sector that has seen scores of layoffs, falling valuations and difficulties for startups seeking access to funding. Nearly 200,000 people have been laid off at tech companies globally since the start of the year, according to tracking site layoffs.fyi.
“Yes it’s more tough today than it was two or three years ago but that was the outlier, not today,” Nelis said.
“The startup game has always been a game full of adventure, and the hard reality is that many of the companies that we finance end up not working, and that’s ok because we’re supposed to take risk.”
Rob Lincolne, CEO of London fintech Paydock, which recently secured a £25 million funding round, said it had become more difficult to secure funding amid a fall in fintech valuations but that investors are continuing to back tech firms with a strong business case.
“We’re seeing the capital markets drift towards B2B and infrastructure investment – that is a message to the market that orchestration is here to stay,” he told the Standard.
“We feel really pleased about the choice we made to be in London. It’s still a great hub for fintech.”
