Who’s afraid of the Brexit vote? It may not be U.K. tech companies and the folks who invest in them.
Data at the tail end of last month showed that, according to Pitchbook for London & Partners, which works with the London Mayor’s office, U.K. tech companies have had a decent summer, pulling in $200 million in funding across dozens of deals post Brexit vote.
Might we surmise that, even in the few weeks since that data was gathered, and reported by the Financial Times, the coffers have grown a bit fatter? Quite possibly, given the interest rates that have been cut or have hovered at minimal levels, which creates scenarios where money, especially private money, chases yields.
The numbers may not be enough to circumvent a slowdown from the same period in the year ago data, as comparably, $338 million pushed into deals through 2015. But then, this year has a special wrinkle in the form of the Brexit vote that shocked the world, and perhaps should have rendered investment activity immobile.
The most conspicuous recipients of investments were Darktrace, a U.K.-based cybersecurity firm, which got $65 million from investors, among them the marquee name of KKR, and the FT said the valuation implied here is roughly $400 million. London’s mayor, Sadiq Khan, stated that the investments showed “further proof that London leads the way when it comes to technology and, because of its diversity and entrepreneurial spirit, continues to attract investment from across the globe. This investment in the capital shows that London is open for business, open for new ideas and will continue to welcome the best talent from around the world.”
Yes, perhaps. But then again, sentiment from other avenues proved less sanguine, with a poll via Tech City UK across 1,200 tech workers in the city voicing expectations that business in the sector would become a grimmer reality post Brexit, with a quarter of respondents stating that they would pull back hiring plans and that’s a complicating factor tied into the fact that some of the best talent comes from non-U.K. countries.
When the U.K. leaves the E.U. (now possibly a 2019 event), luring that talent to the U.K. could prove a hard sell. Talent ultimately proves a determining factor in competitiveness and innovation, and that may have a longer tail impact on new firm creation, which then has an impact on where private money goes. But for now, consider Brexit a speed bump, not a full stop.