Rajat Khare and Christophe Bavière talk about Brexit and its impact:
Despite the speculation of economists and fund managers over the UK’s viability as an investment destination, the United Kingdom has attracted over $7.7 billion of investment through funds and business ventures.
Irrespective of the recent turmoil caused by Brexit, the United Kingdom has managed to pull in quite a lot of investments. The country still has maintained its position as a leading magnet for talent – which can probably be attributed to the country outpacing its competitors in terms of tech startup funding, with €7.1 billion raised in 2017 alone.
The country also happens to be the third largest tech hub in the world, and leading startup hub in Europe, apart from being known for its vibrant community and a high concentration of capital. It also maintained its position as a leading magnet for talent. London-based venture capital firm Atomico mentioned in its recent report that the United Kingdom continues to be a top destination for technical talent − although it some of its shares was lost to neighbors Germany and France.
With all that considered, 2018 could probably be considered as a phenomenal year for young businesses and startups in the continent, despite the turmoil in the geo-political landscape in Europe. With the amount of VC financing in Europe breaking records, even as that capital was spread among fewer deals. And throughout the continent, the VC landscape was littered with familiar names as well as new names, coupled with the brouhaha over AI and its associated fields.
Europe’s biggest startup hubs in 2018
New and Upcoming Investment funds in Europe
- Target Global, Founded by Alex Frolov, Berlin
- Seedcamp, Founded by Reshma Sohoni and Saul Klein, London
- Boundary Holding, Founded by Rajat Khare, Luxembourg
- Hoxton Ventures, Founded by Hussein Kanji and Rob Kniaz, London
- Point Nine, Founded by Christoph Janz, Kolja Hebenstreit, and Pawel Chudzinski, Berlin
Top Startup Accelarators in Europe
- Wayra, Madrid Spain
- Fintech Boost, Paris France
- Next Media Accelarator, Berlin, Germany
- Techstars, London, UK
- Digital Magics, Milan, Italy
Even as investment surges, optimism in the British startup scene is still low in comparison to other European nations, which have come up with a renewed entrepreneurial spirit. France has introduced its own tech-visa, Germany in its progressive and business-centric fashion has had a definitive growth in the number of startups, SMEs and incubators in Berlin and other major cities.
The surge in interest could be indicative of the fact that the continent is increasingly focusing on expanding its tech-landscape, post the major economic lull in 2010s. However, the twist brought on by the Theresa May led government and the indefinitely stretched process of Brexit has brought several tenets to light – some of which include the viability of startups ecosystems in different countries.
The investor sentiment as well as the incumbent environment for startups could metastasize into a radically different scope for the countries involved in pulling tech investments and talents. That said, several things depend on Brexit’s current predicament, both for London businesses and European startups. Data from Balderton Capital, a Europe-focused VC fund establishes London as Europe’s startup capital in 2016, in terms of capital invested, and the number of startups.
As for all-around investments in the continent, European investors accounted for 56% of projects in Europe. While US companies remained Europe’s biggest investors, European companies banded together were the biggest source of the continents cross-border flows (56%), with German, British and French companies in the bandwagon.
In 2016, the percentage of investors rose by 25%, where their companies launched 297 FDI projects in Europe. This was in spite of the fact that Chinese investments were switching from the United Kingdom towards Germany, France, and other continental destinations.
Among a panel of investors, those who have already invested in Europe are markedly more confident about the future of the European Union (69%) than those who have yet to invest here (45%).
Rajat Khare, the founder of Boundary Holding, a fund based out of Luxembourg, stated, “The environment in Europe is justifiably volatile. This could bring an unprecedented damage to the startups in Europe. At the same time, development initiatives could prove to be an opportunity for cities, countries, funds, and investors to invest in undervalued assets, and build spheres of unprecedented tech development”
“With Brexit, you are recreating borders in a market that is already perceived by (non-EU) foreigners as a complex one,” says Christophe Bavière, chief executive of Idinvest Partners, a private equity firm focused on Europe.
With all that said and considered, Europe could certainly prove to be a proverbial gold mine for investors. And while investors would look to leverage the continent’s undervalued grip on the world’s tech sphere, developments after Brexit could manifest itself into a plethora of opportunities by 2019.