Opinion

London startups are increasing in number and multiple sectors are behind the surge

7 min read

03 August 2015

Former deputy editor

London is an increasingly popular startup hub and the number of new firms in the UK capital has experienced a 21 per cent growth year-on-year, according to workspace management company Instant Offices.

Image: Shutterstock

The study was tracked from an analysis of Companies House data taken from the past two years, which highlighted technology businesses as the main driver of growth with a 200 per cent increase.

It’s not entirely surprising as it isn’t just innovators powering the tech sector forward, with the government getting behind a number of initiatives to make sure the industry thrives.

One of the most notable developments came during London Technology Week 2015, which ran from 15 June to 21 June, when Tech.London was launched by IBM at Boris Johnson’s mayoral City Hall HQ. The concept for the platform is to aggregate all things tech in London, whether that’s news, jobs or events, while IBM would prosper from accessing “Type A” startups.

Of course, Real Business discovered the fastest growing business sectors in the UK with the Hot 100 project, and it was revealed that retail is leading the way. So, while tech may be dominant in London, the study from Instant Offices found that there are many other spaces supporting the startup explosion in the UK’s capital.

In fact, the wholesale of textiles was up by 170 per cent, while sales of clothing in specialised stores increased by 46 per cent, according to the findings. Furthermore, retail of clothing and footwear grew by 76 per cent, followed by ten per cent for ecommerce companies.

ASOS is a fine example of a British fashion firm that’s driving both the clothing and online retail worlds forward. In July, the business, which is headquartered in Camden, achieved a 27 per cent sales rise in the UK – this outstripped the 16 per cent international sales rise.

Taxi operators have also been behind solid areas of growth at 117 per cent, as the traditional hailing of black taxis has been transformed with the likes of Uber.

Developments on that front have seen that Uber continuing to receive complaints from taxi drivers – and comedian Russell Brand – while the firm did little to win new fans by trebling prices during the London Underground tube strikes.

Read more on business growth:

Image: Shutterstock

However, black taxi-centric firm Gett capitalised on the bad press by reducing its fares and has also expanded into 18 cities nationwide to continue its growth.

With such a battle to secure loyalty from impatient travellers and commuters, it stands to reason that new startups would want to claim a piece of the pie for themselves and win where they consider others to be losing.

Even Addison Lee has been innovating and making acquisitions in order to make sure it stands out from the rest and retains its user base.

“Since the start of the New Year we have seen considerable demand for office space across the UK, but space requirement has really accelerated post-election,” said Tim Rodber, CEO of Instant Offices.

“The diversity of the firms behind this increase in demand is interesting – but of particular note is the role technology and creative services industries are playing in driving growth in the capital and producing space requirements outside traditional business locations.

“Areas such as Southwark and the City Fringe are benefiting from high demand as startups weigh up the need to not only reduce costs, but attract the best staff to great work spaces.”

Property businesses have also experienced impressive growth of 71 per cent. Sellmyhome.co.uk is one of the new businesses operating in the real estate sector and changing the way people think about buying and selling a home by harnessing an online-only approach.

campaign that was placed on Facebook in March to offer buyers a virtual walkthrough resulted in the owner of the two-bedroom house in Hackney, Mike Freeman, save more £50,000 and earn £10,000 more than the asking price.

“It opened us up to a wider audience and made it easier for people to view our property. The future is using technology to better support the property market and the first virtual open house just goes to prove the future is online for the estate agency industry,” he said. It works and that’s what counts.

“We have an extra £50,000 thanks to technology so I’m certain that pretty soon people will stop seeing it as a risk and realise that it simply is a better way to sell your home. Why would you ever use a traditional estate agent again?”

It was described by managing director Will Clark as “all part of our vision of a better customer experience when selling your home”.

Check out the full breakdown of startup growth below:

% Increase / decrease in registrations

Computers & software sales 200 per cent
Textile wholesale 170 per cent
Buying & selling of own real estate 124 per cent
Taxi operation 117 per cent
Temporary employment agencies 87 per cent
Wireless telecommunications 79 per cent
Wholesale of clothing and footwear 76 per cent
Real estate agencies 71 per cent
Letting & operating of own real estate 54 per cent
Computer facilities management 51 per cent
Clothing sales 46 per cent
Advertising agencies 24 per cent
Research & development on biotechnology 11 per cent
Mail order & Internet retail 10 per cent
IT consultancy -6 per cent
PR & communications agencies -10 per cent