Indeed, Tech City has been a great success as a brand for East London, and there are many exciting businesses operating in the wider Tech City community. Its principle focus is on digital media, internet commerce and mobile, with other distinct more specialised communities, such as fintech and adtech. However, “tech” in Cambridge has distinct characteristics to the “Tech” of Tech City. It is not as simple as ‘Cambridge for hard tech, Tech City for soft tech’, but I often hear this sentiment and can understand why.
These intrinsic differences in the nature of activity in the two clusters have been highlighted by venture capital funding trends after 2009. VCs were becoming more risk averse – they tended to focus on Tech City start-ups because they were less capital intensive, and the rounds which did take place in Cambridge tended to be later stage, less ambitious, more de-risked propositions.
So the two clusters are massively different in composition and focus. However they are also highly symbiotic – both clusters can and do learn a great deal from one another.
But leaving aside the issues with any Cambridge/ Tech City comparison, here are just a few reasons why Cambridge is burgeoning and will continue to do so: Global tech players are still choosing Cambridge. Not only did Microsoft Research choose Cambridge for their European Research Lab, but in 2013 AstraZeneca announced that their new global R&D centre and corporate HQ would be in Cambridge, situated on the new Biomedical Campus. The reason for this is Cambridge’s human capital – its overall pool of technical skills and talent is unrivalled.
Cambridge has a proven ability to grow global companies
So ARM is the poster boy for Cambridge at present, but don’t forget Autonomy’s rise to tech stardom (notwithstanding the unfortunate aftermath). In total, Cambridge has produced Cambridge 11 tech companies worth over $1bn a few more than Tech City’s Silicon Roundabout to date!
Cambridge University attracts and supports the best
The global league tables speak for themselves. However there is also a fantastic framework for entrepreneurship. The University’s commercialisation and spinouts arm, Cambridge Enterprise saw its best ever return in its 2013 annual results. The University is also supporting a really exciting new venture fund, Cambridge Innovation Capital, with a targeted mission and long term investment strategy – yet more great news for Cambridge. And just in case you wondered, Oxford is doing well, but its entrepreneurial community is still playing catch-up.
Cambridge is sorting out its infrastructure issues
One of the criticisms levelled at Cambridge in the past has been the constraints to growth imposed by local planning policy, transport and infrastructure links. This is changing very rapidly. Not only is a major expansion of the city underway in terms of house building, but its infrastructure is finally getting the attention it needs (e.g. a state of the art guided busway and a new railway station for North Cambridge).
Cambridge has great communities for tech
The Cambridge ecosystem is mature and there are plenty of support networks. Great examples include Cambridge Wireless, Cambridge Network and One Nucleus. There are also some fantastic science and research parks in the area, too many to list in fact. Also, there is a well-established investment community in the city, including angels, corporate venture funds, vcs and growth capital providers. The tech consultancies of Cambridge have international renown, and have their own great spin-out success stories.
Cambridge’s pipeline is in rude health
Cambridge has a great pipeline of up and coming companies too. Check out the Killer 50, and a selection recently covered by the Observer. Also, the Cambridge Cluster Map makes for pretty inspiring reading. Many of the most exciting Cambridge companies are helmed by seasoned entrepreneurs, some of which remain entirely self-funded. As these star prospects grow, they will not all find themselves under pressure from VCs to exit early (as has often been the complaint) – those in the know will tell you that there are some highly scalable Cambridge-grown technology companies which are flying pretty much under the radar.
My firm is currently compiling its disclosable deal stats for the whole of 2013 – early indications are that we have acted on around 30-40 funding rounds for Cambridge tech companies in 2013. We are so proud of our stable of Cambridge companies, and confident that it will produce some spectacular winners in the years ahead.
So all told, I could not be more excited about the prospects for Cambridge’s tech scene. It is very different to Tech City in its sector focus. Maybe Cambridge has not garnered the sort of coverage and policy focus that sexy Tech City has, but what Cambridge lacks in style it more than makes up for in substance. The unnamed analysts should pay Cambridge a visit some time…
Charles Fletcher is a partner at Taylor Vinters LLP with a specialism in Venture Capital businesses.