Why Starting A Business At Silicon Roundabout Is Still A Good Idea

In 2008 Matt Biddulph, co-founder of the travel social networking site Dopplr, said in a moment of slight sarcasm when commenting on the growing success of the tech industry in London’s east-end:

“If this goes on, some awful estate agent will start calling us Silicon Roundabout.”

And the name stuck. Silicon Roundabout almost overnight became the UK’s equivalent to Silicon Valley in San Francisco, an expanding hub of new tech companies all hoping to be the next big thing. Entrepreneurs and developers opened their businesses in eager anticipation that their innovative, unique and sometimes unusual ideas could take off and start to rival the unbelievably lucrative US market.

Situated around the Old Street roundabout on the fringes of the city, the name itself implies something quite fanciful. Silicon is shiny, rather beautiful and no doubt attracts the wandering eye of even the most visually impaired magpie. Its sparkling sheen is futuristic and modern. The reality of Old Street unfortunately doesn’t quite live up to this glittery and polished image. The tube is grotty, graffiti is rife and the waft of kebabs so popular with weekend revellers lingers in the air.

However, it’s in this unremarkable part of London that over recent years has become home to a rich and diverse selection of new businesses all keen to make their mark on the digital landscape. Its rise to become the technological hub of the country has been fast and surprising.

In 2008 there were 15 digital or tech companies located around Old-Street roundabout, a small community of start-ups who found the lower rents much more conducive to setting up a new business. By 2012 there were over 5,000 digital companies and the area had cemented its place as one of the largest concentrations of tech companies and wearers of beards anywhere in the world.

For two years running Silicon Roundabout has seen the formation of more companies than anywhere else in the UK. A total of 15,620 new businesses in the financial year of 2013/14, five times more than Canary Wharf.

Developers have responded by starting a record number of new schemes throughout London with a specific focus around Silicon Roundabout. The construction boom is a response to the growing industry and the £626m of investment during the first 9 months of 2014. For anyone in Europe looking to start a tech business, the new developments, increased office space and their proximity to the financial district will ensure that Silicon Roundabout continues to be a great location for any new digital or tech businesses.

While far from easy and of course with some notable failures, there are enough amazing success stories over recent years that can hopefully offer some encouragement. The long hours, excessive red-bull consumption and hard work may just be worthwhile, and it appears that there isn’t anywhere better suited in the UK to do it.
Success Stories
7digital
Started in 2004 by Ben Drury and James Kane, 7digital was one of the UK’s first digital download sites. Their consumer offering allows customers to download and purchased music from their library of 23 million songs, while their B2B services allows companies who offer music services to promote their songs without having to worry or deal with the sales transactions.

The company was one of the pioneers of the area, long before the tech boom and since 2004 they have grown to employ 125 individuals in Luxembourg, San Francisco, New York, Manchester & Auckland.

After their acquisition by UBC Media in May 204 the company was listed on the stockmarket with a valuation of £29m.

In October 2014 the newly formed 7digital group announced that they will be partnering with Black Eyed Peas founder will.i.am, offering music streaming capabilities via his new wrist watch smart phone.
Tweet Deck
TweetDeck is a social media dashboard that allows you to manage and schedule your tweets on Twitter. Anyone who uses Twitter regularly has probably heard of, or used the application at some point.

Started in 2008 by Iain Dodsworth, TweetDeck surprisingly never actually made any money. However seeing its potential and the possibility of generating revenue through ads, Twitter purchased the company for £25m, making its founder Iain Dodsworth a millionaire overnight.

It’s one of the great success stories of Silicon Roundabout and highlighted to the world that it wasn’t just the entrepreneurs in San Francisco who were having all the success. This fashionable part of east London suddenly had more to it than frothy cappuccinos and trendy shoes. Innovation, great ideas and exciting new companies were being formed in Shoreditch that made the world sit up and take notice.
Hailo
Often some of the best ideas are the simplest. Hailo allows prospective customers in need of a taxi to open an app on their phone and alert registered taxi drivers of your location. Once accepted the app will give them real time information on estimated pick up times, location of the driver and estimated fare. Depending on the local market and cost of taxi fares, Hailo either takes a percentage of the drivers fare or charges the customer to use the app.

First piloted in London the company has expanded into Dublin, Toronto, Boston, Chicago, Barcelona, Madrid and Tokyo, with a valuation of around £90m.

Around 40% of registered London cabbies are using the service and waiting times are down to around 2 minutes, saving passengers the expense of visiting a chiropractor to help ease their overused taxi hailing gesticulations.
TransferWise
TransferWise is a peer-to-peer money transfer system that’s part of the growing financial technology, or fintech scene. Companies that transform or disrupt the more traditional forms of financial services.

Started by former early employees of Skype, the company is in the latter stages of investment with US based investment company Sequoia Capital. If successful some estimate the value of the company will be close to $1bn.

Many involved in fintech are looking to London to either start of expand their business operations. The location with its convergence between the US, Europe and the Middle East make it an idea location for a business with global aspirations.
Other notable companies include:
Last.fm: Online music recommendation service sold to CBS for £140m

Moshi Monsters: Online gaming service for the under 13’s valued at £200m

WAYN (Where Are You Now): Travel based social community with 22,800,000 members.

With government funding estimated at £50m for the area including development plans to improve both the infrastructure and amenities, it doesn’t look likely that we’ve seen the last of the exciting new ventures from this creative part of London’s East End.

This post was written by company formation agent Euro Start Entreprises. Helping foreign businesses and entrepreneurs open a company, or expand their operations through the UK, Europe and the Emirates.