Things I Learned in Lon­don

A First-hand Ac­count on How Europe’s Tech Cap­i­tal Is Nur­tur­ing Its Startup Ecosys­tem, by Omar Chris­tidis

Arabnet - The Quarterly - - Content -

Arabnet’s CEO gives a first-hand ac­count on how Europe’s tech cap­i­tal is nur­tur­ing its startup ecosys­tem

In early April, a few mem­bers of the Arabnet team made a trip to Lon­don to help build bridges be­tween the Mid­dle East and the UK tech mar­ket, which is rapidly emerg­ing as the key tech hub of Europe. The trip was a whirl­wind of meet­ings with in­vestors and dig­i­tal ex­ec­u­tives, vis­its to cowork­ing spa­ces and ac­cel­er­a­tors, as well as great talks and net­work­ing events.

Be­yond the con­nec­tions that we built, I came away with a few in­sights about the trends in en­trepreneur­ship that I be­lieve will be com­ing to our re­gion in the near fu­ture.

1. Sec­tor-spe­cific Ac­cel­er­a­tors Are on the Rise

We vis­ited more than a dozen ac­cel­er­a­tors and co-work­ing spa­ces in Lon­don, and one of the in­ter­est­ing things we no­ticed is the pres­ence of many sec­tor-spe­cific ac­cel­er­a­tors. The hottest sec­tor by far was Fin­tech - Fi­nan­cial tech­nol­ogy - with three ac­tive ac­cel­er­a­tors fo­cused on this in­dus­try. Level39, so named be­cause it is lo­cated on the 39th floor of a sky­scraper in the heart of the Lon­don bank­ing dis­trict, of­fers star­tups di­rect ac­cess to the bank­ing in­dus­try, so they can test and then sell their prod­ucts. We also vis­ited Startup Bootcamp, who were just set­ting up the of­fice for their fi­nancetech ac­cel­er­a­tor, and met with Bar­clay’s, who com­mis­sioned Tech­stars to run their fi­nance-fo­cused ac­cel­er­a­tor. Be­yond fi­nance tech, we also vis­ited The Bak­ery, an ad­ver­tis­ing ac­cel­er­a­tor de­signed to connect brands with star­tups and in­no­va­tors to solve mar­ket­ing prob­lems; and Emerge Ed­u­ca­tion, an ac­cel­er­a­tor for star­tups in the ed­u­ca­tion space, based out of Google Cam­pus.

2. Brands Are Look­ing for In­no­va­tion

The sec­ond in­sight that emerged from th­ese same meet­ings is the heavy in­volve­ment of the big cor­po­ra­tions / brands in the en­trepreneur­ship ecosys­tem. The Bak­ery, for in­stance, works di­rectly with brands to solve their mar­ket­ing prob­lems; each cy­cle is spon­sored by a brand, who puts for­ward a brief for the star­tups to work on. They pitch their ideas, the brand short­lists their fa­vorites, and each of those re­ceives 50,000GBP to de­velop their prod­uct. At the end of the cy­cle, the en­trepreneurs demo their fi­nal prod­ucts to the brands, and the best prod­ucts may be im­ple­mented into com­mer­cial use by the brand. Bar­clay’s is an­other ex­am­ple: the com­pany is a key spon­sor of Cen­tral Work­ing cowork­ing space, and is run­ning its own ac­cel­er­a­tor pro­gram to har­ness the next wave of in­no­va­tion to grow its busi­ness. Fi­nally, Tesco, the world’s sec­ond-largest re­tailer by rev­enues, is the main spon­sor of Rain­mak­ing Loft cowork­ing space, and they come in to meet star­tups on a monthly ba­sis to keep their fin­ger on the pulse of in­no­va­tion.

3. The Pace of Growth Is In­creas­ing

Ev­ery cowork­ing space we vis­ited seemed to be filled to the brim, yet all of them were less than two years old. Google Cam­pus, a 5-floor build­ing in the heart of Lon­don’s Techc­ity, cel­e­brated its two year an­niver­sary dur­ing our trip. The Cam­pus has free work­ing space and tech events. We at­tended a talk by the Head of Europe at Buz­zfeed and the Founder of Jaw­bone two nights in a row

- both of which were packed. Level39 was 13 months old when we vis­ited, and Rain­mak­ing loft was just 7 months old and yet were turn­ing ap­pli­cants away and look­ing at ex­pand­ing their space to ac­com­mo­date more star­tups. We vis­ited Warner Yard, an 11-month cowork­ing space where Tech­stars is lo­cated, but which more im­por­tantly has a cowork­ing space ded­i­cated for an­gel in­vestors, where they can share and dis­cuss deals and co-in­vest­ments. So while the ecosys­tem is al­ready fur­ther along than MENA’S, it hasn’t reached any­where near its ma­tu­rity or ca­pac­ity; I ex­pect that MENA will ex­pe­ri­ence this same ex­po­nen­tial rate of growth in tech en­trepreneur­ship as well.

I be­lieve we’re on the cusp of tremen­dous growth for the en­trepreneur­ship ecosys­tem in the Mid­dle East. With the ma­jor cor­po­ra­tions, brands, agen­cies, gov­ern­ment and in­vestors all eye­ing this sec­tor, we’re go­ing to see an in­flux of money, power and re­la­tion­ships that are crit­i­cal for the emer­gence of suc­cess sto­ries. In the mean­while, to the star­tups that are strug­gling to grow in our nascent ecosys­tem to­day, I’ll leave you with you the quote that most struck me from our trip: Alexander As­seily, the Le­bane­seBri­tish Founder of Jaw­bone in­sight­fully told us: “The value of a com­pany is the sum of all the chal­lenges it has over­come.”

Omar Chris­tidis is the Founder and CEO at Arabnet. He is a fre­quent speaker on dig­i­tal tech­nol­ogy and was se­lected by Gulf News Mag­a­zine as one of its “30 un­der 30.”

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