The State of the UK’s Startup Scene

June 13, 2016

11:00 am

The United Kingdom – London in particular – has an exciting startup scene. Many new tech and other startups are choosing the UK as their launchpad. If you are eyeing the UK as a possible location for launching your business, keep reading. We will explore the hot new startups, VCs, and possible challenges that you might face.

Hot New UK Startups

HeySuccess

HeySuccess is a platform that is used to match students and recent graduates with companies, governments, and other organization that are looking for great talent for global opportunities. Since its launch in 2014, the platform now has over 100K active users and more than 10k programs for students. Current investors in the company hail from Israel and the UK, but the company has just closed on $1 million in funding from United States investors.

Kazooloo

Kazooloo has taken augmented reality technology and used it to turn a video game into a 3-dimensional experience. The technology involves a game board and a mobile app that turns any physical location into a 3D battleground. The product is now being sold in toy stores and other retail locations including Harrod’s. The company’s initial funding was $1.5 million from Plarium.

SongKick

SongKick is a website that allows music fans to track their favorite bands, learn when and where artists will be performing, and buy tickets before too much buzz is created and they sell out. Up-and-coming and established artists can also sign up on the website so that they can broadcast their tour dates to a large audience.

Active UK Venture Capital Firms

Passion Capital

Passion Capital has more than €86 million in funding capital available to startups. The company focuses almost completely on UK based startups and offerings seed funding at an average of €200,o00 or less. At this point in time, they have funded 47 startups.

Balderton Capital

Balderton manages more than 2 billion dollars in funding for startups. Their investments are currently divided between 35 percent UK-based startups and 65 percent startup funding elsewhere in Europe. Currently, they are actively funding 80 companies. Average funding is between $5 million and $8 million.

MMC Ventures

This VC firm has around ‎€135 million in funding monies to invest in startups. They are a Series A to Series B investment company and currently are funding 32 companies. MMC Ventures focuses primarily on UK startups but seek out companies that have potential for international growth.

Сommon Challenges Faced By Startups

High Priced Rents on Office Spaces

According to a recent survey, space costs in the UK are alarmingly high. As a result, many companies are being forced out of the city in order to be able to afford office space. Unfortunately, for many startups locating outside of urban areas is just not feasible. Because of this there is a danger that some might opt out of launching in the UK altogether.

Stress on London’s Infrastructure

Although the startup scene in London is strong, the influx of new startups has put pressure on the city’s existing infrastructure. The UK government will have to act to insure that the city can handle all of the digital traffic that is being placed on the telecommunications and other systems in the city.

If you are considering launching your startup in the next year or so, the UK should definitely make your short list of potential locations. The startup scene is definitely booming, although there are a few challenges.

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Dianna is a former ESL teacher and World Teach volunteer, currently living in France. She's slightly addicted to apps and viral media trends and helps different companies with product localization and content strategies. You can tweet her at @dilabrien

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