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Some London startups say Brexit is already hurting their businesses
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LONDON — Brexit hasn't even happened yet, and some British startups say they're already feeling the negative effects.
One in 10 London tech firms say that investors have held off or withdrawn from a funding round after Britain's shock vote to leave the European Union, and a third say that it has made it harder for their businesses to grow, according to a new survey from Tech London Advocates.
The industry advocacy body surveyed 200 "senior figures within London's tech sector" about the impact Britain's planned departure from the EU is having, and found widespread negativity within the industry.
58.2% of respondents said that it will "damage London's position as a global tech hub," with 24.3% arguing the opposite — that it wouldn't have much impact.
Despite these concerns, however, 2016 was overall a record year for venture capital investment in Britain (even with the referendum halfway through), according to data included in a Tech City UK report published on Wednesday.
But the pessimism about Brexit is unsurprising. Before the June 2016 referendum, the UK tech industry overwhelmingly supported remaining part of the EU. In one poll, almost 90% of respondents were pro-Remain.
TransferWisePeople in the industry have numerous concerns about the impact Brexit could have, from the availability of funding to access to European markets and to talent, with the London tech industry heavily reliant on foreign workers.
British Prime Minister Theresa May has indicated that when she triggers Article 50 — kickstarting the formal process of leaving the EU — on March 29, she intends to pursue a "hard Brexit." This would prioritise immigration control over tariff-free access to the European Single Market, a position that has little to assuage the tech sector's concerns.
There have, however, been some early votes of confidence in London's post-referendum tech sector. Facebook announced expansion plans in November 2016, saying it intended to hire 500 more people in London, while Google recommitted to plans to build a major new London HQ.
A survey published this week by KPMG (and conducted late last year) suggested that globally, Brexit has done little to dampen optimism about London's future as a major epicentre of tech, with more respondents than ever citing it as an "a leading technology innovation hub" for the industry.
But Tech London Advocates' survey suggests that on the ground, businesses are more worried.
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