One of the most distinctive cities in Europe’s landscape, London is vital in almost every industry. London is known for its big city feel with a heavy fashion following. An urban, edgy city, it has the flair of New York. The creative entertainment industry has a strong presence in London, mimicking the entertainment mecca of Los Angeles. Finally, as a government capital, the political world keeps an eye on London for direction. There is so much to draw from within the historic city, that it seems only natural that start-ups would be drawn to the town. London is without a doubt a city that has something to offer everyone. Generating an environment that welcomes innovation in the start-up market seems to have happened almost organically, as people are drawn to where the action happens.

Startup Hubs Around the World: London

© | Iakov Kalinin

In this article, we look at six essential elements of any potential start-up location that must be considered: 1) location, 2) tax incentives, 3) legal incentives, 4) availability of investors, 5) local resources and workforce, and 6) specialization.


England’s capital city is the seventh most influential start-up hub in the world, and is located perfectly for expansion across Europe and into the United States and beyond. As a leader across the board in almost every facet, it has drawn the best of innovators, creative thinkers, business leaders and investors.

With an impressive array of companies that have either headquarters or branches within the city already, the established marketplace is a strong element in the city. What is interesting is the continual growth of the creative element in London which has pushed innovative thinking and design. The city has long had a Bohemian element, and the ever shifting center of the creative side of London has helped to produce some of the most attractive parts of the city. As creative individuals moved into an area, they improved the surroundings, creating an edgy, enticing area that was soon flooded with middle class money. The artsy element would move again, and the cycle would repeat. Chelsea and Soho are examples of how the creative revitalization of London has progressed through the years.

The accessibility of the city gives it even more appeal – entrepreneurs can easily travel to promote their start-up, and investors can easily reach the city to check out the project. For production companies, products and raw materials can easily be transported through a wide range of transportation options.


Government support of the tech industry in London can be seen with the creation of a department specifically designed to encourage start-ups. By connecting tech businesses with the resources they need to succeed, the government is helping to ensure success at every level. In addition to offering tax incentives and programs to assist businesses that start in London, they offer events and promotions that raise public awareness of the growing tech industry of Europe. The backing of the government in the start-up market gives credibility to London as a powerhouse in this area. They are putting their money where their mouth is, so to speak, by creating an environment that welcomes the innovative world of tech start-ups. By giving them the incentive they need to not only venture into the start-up market, but also allowing them time to develop and succeed financially, London is ensuring that they continue to attract start-up entrepreneurs.

In addition, the creation of specific tax incentives that appeal to start-ups demonstrates the commitment of the British government to innovation. With tax credits that can give up to a fifty percent credit to investors, there is a strong push to encourage investments in start-ups. With the full support of the government, there is a clear message that London doesn’t just think start-ups are a good idea; they are motivating people to create them.


London is attractive to start-ups because of the lack of red tape that surrounds the process of beginning a business. By offering support in the legalities of forming a corporation, London is creating a culture where start-ups can flourish. They can help encourage more entrepreneurs by increasing the legal incentives to corporations who operate within the city and by providing additional assistance as needed to further develop the start-up. As a political and business center, there are a vast number of law firms and legal experts who have made London their headquarters. The legal requirements to operate in the European market are not as murky as it is in some of the world’s countries. For the start-up entrepreneur who needs legal guidance, there are lawyers from almost every major international law firm available to help navigate the legal world of start-ups.


One of the largest hurdles London faces as a start-up hub is the funding gap. A large gap between initial investment and growth investment exists – estimates claim there is over 80% less funding in the second stage of development than that of Silicon Valley investors. The gap is primarily due to a lack of super angel investors in the London arena. By continuing to pursue the innovative entrepreneur, London is in a good position to launch viable start-ups. As more start-ups achieve success, investors will be more prone to invest, creating a self-sustaining cycle that will further help to drive the hub.

If London wants to remain competitive in the tech start-up industry, they need to expand their focus towards some of the less-traditional technology markets. Historically, entrepreneurs in London tend to be more averse to risk and direct their attention towards smaller, less ambitious markets. It follows, then, that venture capitalist investors in London tend to be more reserved in their investments as well. The natural reticence of the British may have a cultural influence that will not serve them well as they consider the future. The London start-up entrepreneur needs to tap into the creative, free style spirit of the culture in London to develop fresh, new technology. As start-ups become successful, investors will begin to take notice of the advantage in putting money into some of the ‘riskier’ companies.


The recent economic downturn pushed skilled workers out of the workplace and into the private sector. With an influx of talent in the entrepreneur market, the workplace is teeming with skilled, available labor. Channeling the innovative ideas and technology towards start-up ideas may require some effort and planning, but can be done. The workplace has workers, the challenge London faces will be to give them an environment where they can thrive and create.

While sheer number of employees is high, there is a lack of technical workers in London – creating a demand for digital companies to find new employees. Attracting students to the IT related fields, offering training courses that will attract people into the world of programming, and bringing new incentives to students towards industries that have experienced a falling away are all ways that London can help to boost the lack of workers in these fields. Free training classes, online courses and workshops are all ways to help give developers the training they need to fill the gaps in workforce. Current estimates show that London only has approximately half the technical workforce that they need – creating a huge lack of people with practical and technically proficient skills.

Drawing on the resources of the vibrant city, there is a huge potential for collaboration across industries. The potential for innovative thinking and design can be best seen in the Silicon Roundabout – the center of innovation in London that houses at least 1,000 companies and is clustered around London’s Google campus.

London Startups Eco System: Ympact



The unique culture of London combines the best of fashion and art with the growing tech market. By continuing to capitalize on the start-up ready environment London has created, the innovative entrepreneur has a wide field to thrive in.

London boasts of the highest proportion of tech entrepreneurs who are women – with the largest female start-up offerings in Europe. This could (and should) be an area where London can excel. With the creation of networking events and organizations specifically targeting women, the start-up community is helping to abolish the idea that all tech start-ups are headed by men. The community of women entrepreneurs is filled with women from a variety of industries: development, design and more.

There are a surprising number of tech start-ups that have been developed specifically for London residents and visitors, which are starting to adapt and expand into other markets. The idea of area specific applications is not new, but the high number of them that have developed within London is unusual. The Best Sandwiches in London, for example, can help you locate a sandwich based on your location – proving that London entrepreneurs are practical (as well as concerned about the availability of a good lunch). A host of Olympic centered programs sprang up for the Londoner to keep track of where events were taking place, help avoid the crowds and cheer on the home team. With this type of ingenuity, it gives ideas about the type of specialization that London can focus on: practical, everyday innovations.

The London start-up hub is on track to become one of the leading entrepreneur sites in the world. The culturally reserved London crowd is hesitant to compare itself to Silicon Valley, so the rest of the world has to make the comparison for them. It is clear to the outsider, though, that London will give Silicon Valley a run for its investor money within a few years. The hurdles that London faces are not insurmountable and if anything, should help to spur on the start-up hopeful. London’s technology climate is just waiting for a start-up to give the hub the needed boost that will encourage others to not only leave the confines of the typical London business box, but to venture into a new world of tech possibilities.

By focusing on increasing tech development, London can continue to compete with the larger markets in Silicon Valley and other start-up hubs. They need to place priority on finding new fields of innovation, establish growth funders who are willing to invest in the further development of start-ups and begin the process of finding new avenues of creative thinking. The elements are all in place, so the world (and London) is waiting for someone to put them all together.

The business world is changing and with their continuing establishment of start-ups and tech hubs, London will be at the forefront of the new tech world. The tech world offers more flexibility, greater options and an increased level of risk than the traditional corporate world. With the current downturn of the global economy and the overall sense of unease about the stability of the corporate giants, there doesn’t seem to be much more risk in starting something new. When London begins to understand that their start-ups are competitive on a global scale and that they can not only showcase that talent to the rest of the world but can revel in their accomplishments, the London start-up hub will be virtually unstoppable. By creating new business opportunities, giving investors new reasons to invest and then continuing the growth of start-ups, London is not only creating activity in the economy, they are offering optimism.

A few of the hottest new start-ups to emerge in London

GoCardless. A direct payment application that allows consumers to make payments without swiping a credit card, it is starting to revolutionize the small business payment process. By working with banks, it allows the smaller companies to use the same processes that utility companies use to accept direct payment from customers.

SwiftKey. An app geared towards Android users, SwiftKey is a predictive text program that learns what users generally type. The program works with Gmail, Twitter and Facebook and can predict (and autofill) what the person using the program wants to type, based on the past typing patterns.

Hailocab. For those weary of trying to flag down a passing cab, Hailocab is a mobile app that brings the cab right to your side. In early 2013, the app launched in five other major cities and has been getting excellent reviews.

Graze. A mail delivery based service that offers healthy snacks in custom portion size. Customer preferences are used to determine the types of snacks shipped, through the algorithm that tracks customer orders.

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