Many questions cross the minds of entrepreneurs when they set out to expand their global footprint. Questions ranging from where does our product have a considerable demand? Which cities hold the exceptional talent to take part in our team and where can we access growth capital to scale?
Selecting a suitable market and having market intelligence becomes the foremost step for a fruitful international expansion attempt, in turn driving the rapid growth of a platform’s consumer base, its profitability, and eventually its commencement into fresh markets. Among all the cities in the world that facilitate businesses with each of the requirements to grow and expand internationally, we have London, a city regarded to be a superior location for advancing one’s business to the next level.
Being the largest tech hub in Europe and the abode to many home-grown SMEs and international businesses, the city’s tech ecosystem has expanded on a rapid scale with tech clusters emerging all over London.
“In fact, London was the second fastest growing tech ecosystem between 2019 and 2020 (behind Bengaluru) and it now sits fourth globally in terms of number of startups and unicorns created.”
- Hemin Bharucha, Country Director, London & Partners
The growth rate of London’s tech ecosystem gives it the capacity of welcoming and supporting international companies and offering a competitive environment to them where they can thrive and grow.
In an exclusive discussion with Hemin Bharucha, the Country Director at London & Partners, he has shared his insights with Analytics Steps on why global tech investors show confidence in London, how the India-UK Ed-tech collaboration has been going strong post-Covid and has also reflected on the future of Indian unicorns in London.
London & Partners is the business growth and destination agency for London. The platform promotes London as the best city in the world in which to invest, work, visit and host an event and its mission is to create economic growth that is resilient, sustainable and inclusive.
The company offers support to businesses in high-growth sectors in a variety of ways. It helps international companies to set their abode in London by offering free and confidential advice and connecting people and organisations using its unique networks and its exclusive knowledge of the city. It offers business support for platforms in London to expand via its dual accelerator programmes, namely :
Business Growth Programme - This offers expert guidance for London-based businesses who can seek benefits through tailored advice and also connect with businesses, mentors and partners.
Mayor’s International Business Programme - This programme offers exclusive support through access to businesses, mentors, partners and international trade missions.
The platform also operates a range of flagship events ranging from London Tech Week to Silicon Valley Comes to the UK (SVC2UK). They also have a business support programme for female founders named Beyond HERizons which helps businesses access investment as well as Open Innovation Fellowship, a programme that offers senior leaders of open innovation in London’s larger businesses with tailored support to develop their strategic approach to open innovation.
“India is the 6th largest economy in the world and is expected to expand by 9% in 2021 and by 7% in 2022. This growth trajectory will see India become the world's third largest economy by 2030, providing lots of future opportunities for trade and investment between London and India.”
In FY 2019-2020, India was the second-largest investor in the UK and despite the coronavirus pandemic London continues to be a top choice for Indian companies looking to expand internationally.
Indian companies have invested in 99 projects and created 4,830 jobs in Britain to retain India's position as the second-largest source of foreign direct investment (FDI) after the US.
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As the Indian tech industry matures, we have been witness to many UK-based tech companies increasingly looking to expand into the Indian market for accessing its massive customer base and rapidly expanding tech sector.
Taking into account India’s rapid economic growth as well as the expansion scope offered by Indian companies, London and Partners supports high growth Indian companies in their global expansion plans from their offices in Mumbai, the nation’s financial capital and Bangalore, which is pegged as the Silicon Valley of the nation.
Handling the reins of the platform’s business in India is Hemin Bharucha, London & Partners Country Director in India. As part of the London & Partners Senior Leadership team, Hemin advises on strategic direction and participates in the evaluation of key projects.
Hemin is also authorised for delivering against set targets for trade and investment activities in India which includes encouraging Indian companies to expand their business into London while also in turn offering his support to London-based companies in entering the Indian market and discovering suitable partners in India for them to connect with.
Being the platform’s senior-most representative in India, Hemin also maintains strategic relationships with key stakeholders. Under Hemin’s guidance, India now ranks amongst the top three countries that invest in London for business, students and visitors.
While being on the lookout for expanding to London, there are a range of factors that Indian tech companies need to consider, be it setting up a legal entity, considerations around UK taxation, visas or deciding on the office location.
This is where London & Partners steps in. The platform’s team has helped more than 2000 companies from over 67 countries in setting up and scaling in London and their network of experts offer free of charge, bespoke and confidential advice to guide companies on every aspect of locating and conducting business in the city.
“Our services include access to high-quality banking, accounting, legal and immigration advice through our accredited professional service providers, advice on relocation and office space, help finding the best people in London’s huge pool of talent and skills as well as connecting you with London’s business networks.”
“We’ve seen several tech companies responding innovatively to the impacts of the pandemic, offering solutions to global challenges. For example, the last year has seen the rapid growth of edtech in India as edtech solutions became paramount to schools and education during the pandemic.”
The business and tech ecosystems in India have expanded rapidly in the past couple of years, with recent data from Dealroom revealing Bengaluru to be the fastest-growing tech ecosystem between 2016 and 2020.
India has experienced a period of rapid economic expansion too with the country witnessing a total deal value in venture capital (VC) funding of nearly $10 billion in 2020, the highest across all years barring 2019, as per the India Venture Capital Report 2021 by Bain & Company.
With government support for growing startups considerably accelerating in India and VCs increasingly funding fast-growing companies that exhibit potential for global scaling, the booming sector of Indian startups shows a high degree of scope for global expansion.
“Fast-growing Indian companies will be looking to expand into new markets to acquire new customers, drive profits and continue their growth. When a company is weighing up potential destinations for international expansion, they will consider several factors including the ease of doing business, a supportive ecosystem, access to world-class talent, customers, government support, regulators, and access to funding. In London, companies have access to all these strengths in one ecosystem.”
Bharucha pointed out that London’s status as a leading global financial center and its expansive network of venture capital firms offer the city’s businesses greater access to finance. In 2020, London tech firms raised $10.6bn VC investment, more than any other European city. 2021 has also seen record levels of VC investment into UK-based tech firms, with $8bn already invested up till March 2021.
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He also added that favorable policies and incentives have helped in cementing London as a startup hub. Companies in the UK benefit from flexible employment law, low-cost legal structures, and capital gains tax relief. The UK’s Financial Conduct Authority has also played a key role in setting standards of regulation globally and attracting international companies to look towards London for their international expansion plans. This aside, R&D tax incentives are available for innovation and apply across all industry sectors, including Artificial Intelligence.
“London is a diverse and innovative business ecosystem where ambitious and fast-growing Indian startups can succeed and thrive. Like with any global expansion plans, there can be pain points when setting up and establishing yourself in a new city. However, London is a business-friendly city with a supportive business ecosystem and London & Partners is on hand to support any challenges Indian startups may face when setting up here."
“London’s global business community is built on diversity and progressive thinking, making it the ideal destination for ambitious Indian companies to grow their international footprint.”
The UK recently hit a milestone and reached 100 tech unicorns, reflecting the rapid growth of the tech sector in the UK and London. 65 of the 100 unicorns are based in London, making the city the unicorn capital of Europe.
London-based unicorns include the 100th unicorn to be announced, Tractable, an AI start building computer vision tools. There are also 82 future unicorns in London, ahead of Paris (42) and Berlin (32).
“London’s supportive and thriving tech ecosystem provides Indian tech companies with access to everything necessary to grow and scale their business. The city is home to world-class universities, a diverse talent pool, the right policy makers, growth capital, customers, infrastructure and accelerators all in one place. ”
Bharucha adds that London has emerged as a unicorn capital owing to increased access to later-stage funding – with data showing a sharp increase in the availability of capital for $250m+ funding from $1.8bn in 2019 to $5bn in 2020.
So far in 2021 there have already been 13 new UK tech unicorns created, compared to 7 in the whole of 2020.
“We anticipate this growth in unicorns to continue as the tech ecosystem matures and London and the UK supports scaling innovative tech companies.“
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