London, the longtime financial capital of Europe, has of late also become a major center for its entrepreneurial activity. Techstars operates two accelerators, one of them focused on fintech and backed by Barclays. Seedcamp is the most well-known accelerator in Europe, and it has had a significant impact since its founding. Additionally, efforts by the City and the Government to diversify London’s bank-centric economy have yielded a surprisingly vibrant startup landscape. The Tech City initiative, launched in 2010, has sought to encourage entrepreneurs to put down roots in east London. This concerted marketing effort, combined with London’s low tax rates and business-friendly government, makes investment and entrepreneurship attractive. However, London still suffers from a high cost of living and an angel community that lacks the experience and culture to make the large bets that make small, promising enterprises into big wins.

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These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.


  • London’s world-class financial sector provides talent and investment experience, as evidenced by the various fintech accelerators, such as the Barclays Accelerator, the Fintech Innovation Lab, and Startupbootcamp Fintech Accelerator.
  • Truly supportive government on the city and national levels which sees entrepreneurship as a way to diversify the City’s finance heavy economy and increase flagging growth.
  • The ecosystem has achieved significant traction through scale, as it is composed of over 3,000 tech organizations, making London larger than Berlin. London now also has 162 incubators, accelerators and coworking spaces (34, 16 and 112 respectively).
  • London’s international makeup and cultural vibrancy make it extremely attractive to young founders.
  • The Tech City initiative has targeted east London as an entrepreneurial hub. Its partnership with the Future Fifty accelerator has been a marked success, with the accelerator’s companies having received 28 percent of Europe’s capital in tech IPOs as of 2014.

Risk Factors

  • The finance industry competes for talented engineers and in many cases, can pay them much more than startups.
  • The city’s high cost of living constitutes an onerous burden for young startups. This is especially a concern when the city is compared with cheaper European markets, such as Berlin, that offer similar benefits in terms of talent and government support.
  • While ex-financiers provide a considerable amount of angel investment, they tend to lack experience and willingness to make the larger investments necessary to get startups to later stages. This, combined with a lack of truly large funds, has created an 81 percent gap in second stage capital received compared with Silicon Valley.

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