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What are leading investors in the UK tech ecosystem focusing on? Despite economic challenges, the UK—particularly London, with its concentration of capital and talent—remains a crucial hub for innovation. It continues to attract the very best founders and investors due to its robust infrastructure, world-class talent, and strong support networks. As the landscape evolves, the UK tech ecosystem is positioning itself as a global leader in navigating, and capitalising on, emerging opportunities.
Last month, our UK team tackled this topic at our annual flagship event, "UK Dynamism: Investing in Growth & Innovation," hosted by Google Cloud at the Google London HQ in Pancras Square. This year’s theme, inspired by "American Dynamism" coined by Andreessen Horowitz, explored how innovation can spark a new era of growth in the UK.
The event brought together over 200 attendees and speakers, all of whom are playing a role in shaping the future of UK tech. Antler Global Partner, Andrea Hajdu-Howe, shared insights into Antler's mission, global footprint, and impact across the world, highlighting key trends in innovation and the growing opportunities in venture capital. She also addressed the current macroeconomic landscape, contrasting past challenges with the renewed optimism for 2025. Dubbed the “Year of Optimism,” Andrea highlighted why early-stage tech and venture capital are set for growth, underscoring Antler's pivotal role in driving global tech success.
One of Antler’s UK Partners, Jed Rose, presented key findings from the 2024 European Tech Founders Report, highlighting the rise of a new generation of technical founders in Europe. This shift is being driven by factors such as layoffs and the rise of emerging technologies like AI which make it cheaper and easier than ever before to bring a product to market. He also discussed why Europe now has both the talent and capital needed to build its first global tech giant.
The day ended with an electric panel discussion with Hussein Kanji (Founding Partner at Hoxton Ventures), Neil Shah (Head of Tech, Primary Markets at London Stock Exchange), Sarah Kunst (Managing Director at Cleo Capital) and Toby Triebel (Partner at FinTech Collective), moderated by Hannah Leach, GP at Houghton St Ventures and Venture Partner at Antler. It offered an inside view from leading VCs who interact with founders daily, see innovation happening first hand, and drive investment decisions in this dynamic and evolving market:
The panel touched on three big themes:
- Emerging technologies and growth opportunities
- Increasing capital allocation for innovation
- Unlocking British talent and ambition
Watch the full event below and read some key insights below.
To kick things off, the panel shared their thoughts on what they’re most excited about when it comes to UK tech and venture today…
Neil Shah, Head of Tech & Primary Markets at London Stock Exchange shared his thoughts on the talent and resources we have in the UK…
“There's tons of exciting companies here. We've got talent. We've got universities. We've got capital. Capital isn't a problem. We've got £6tn sitting here in the U. K.; £3tn in pensions, £3tn in insurance, £300 billion sitting in cash ISAs earning a negative cash return. We just need to take that capital and stick it into the late stage and into equities, I think that will solve a lot of our problems.” - Neil Shah
Sarah Kunst, Managing Director at Cleo Capital shares Neil’s optimism about the fundamental building blocks available in the UK:
“There are amazing ingredients here. You have amazing schools. You have great proximity to the global rich who love to buy a bolt hole in the English countryside. (Apparently, Ellen DeGeneres is moving in). There's great ingredients and I think that quality ingredients mean that you can make a beautiful mince pie, and it's exciting to be here at what feels like the start of that.” - Sarah Kunst
As a Founder and Partner of Hoxton Ventures, Hussein Kanji has had a lot of exposure to deals across the early-stage ecosystem. He shared with us his thoughts on where the UK has a competitive edge in 2024…
“Life sciences, for sure. That's not just tech bio, but broadly life sciences. I think we've produced company after company in that field. That obviously intersects with everything that's related to tech bio, because I think the other big strength here is deeptech. And it’s right here around the corner, take DeepMind (which is reasonably old as far as AI companies go, or AI engines go) is starting to produce wave after wave of companies that are coming out of it now. People leave the enclave of Google and go off to do something else. And so those two things I think we're incredibly strong in. But I feel like the U.K., because it has such a research heritage and such an intellectual heritage, has the talent base to produce almost any kind of company. So you see quite a bit of variety in this ecosystem, not just in any one given field.” - Hussein Kanji
Are we doing enough to attract and maintain ambitious talent in the UK?
From his position as Partner at Fintech Collective, Toby Triebel supports founders who are building the future of financial services. He believes the UK’s previous exits are key to the talent pool we have in the UK, but that more can be done to ensure we retain it…
“I think we have strong talent here. And increasingly, certainly when it comes to financial services, there's lots more talent that is coming out of companies that are increasingly successful. The UK has generated more than 120 unicorns over the last 10 years which is far more than Germany and France combined, for example. And there's an increasing amount of talent coming out of those companies that are looking for funding. So the problem is we've got to keep them. And we've got to keep the UK attractive, both to raise money and to grow companies, but also on the personal level. And I think that's probably an obvious area where the UK can do more.” - Toby Triebel
Neil Shah agrees that more needs to be done, but feels we are making progress when it comes to remuneration…
“Incentives matter. I think the government didn't really read the room when they put the budget out and that's been reflected. But I think there's a ton of stuff that we can do to make sure that this talent pool is getting remunerated correctly. And if I compare where we are today compared to where we were last year, it's night and day on the stock market. You're seeing a different stance from fund managers on how they're looking at pay, recognizing that, actually, if you've got Broadcom and Microsoft, Crossroad, and Google, that matters to your company. You've got to be able to pay your staff. If your head of sales is getting paid more than your CEO, I think that's an issue. And these are some of the things that I think are getting fixed. Would we like them fixed sooner? Absolutely.” - Neil Shah
From the European perspective, Toby Triebel shared insights on how European founders still find the UK an attractive location for building and scaling a company…
“The last two British companies that we backed were founded by Germans, but they're building in the UK. They chose to come to the UK for access, for funding, for talent, and also for ambition. It's ambitious for a German founder to go to London out of their comfort zone. We also see a lot of continental European companies wanting to expand to the UK before the US, because that's one step closer. I think that might be another area for the UK to capture: smart, ambitious continental European founders that are looking to go to London before the US.” - Toby Triebel
As the Managing Director of Cleo Capital, Sarah Kunst has extensive experience investing in the US ecosystem. For her, a depth of talent exists in the UK, but there can be a lack of ambition compared to the US which she believes is a result of the wider attitude of wealth in the UK…
“There's all the smart people and all the best schools, but ambition-wise I think that there is a fear of failure, and if you're afraid to fail there's only so far you're going to go. There’s a ‘no tall poppies’ attitude of not being encouraged to stand out. I was once sitting at a UK event and a VC said, ‘don’t aim for exits above 100 million, because most of the exits in the UK are under 100 million.’ But for me, if you’re not building a multi-billion dollar company, don’t talk to me. There's such a gap there, but it's not necessarily coming from the founders. I think it comes from everybody else in the ecosystem.” - Sarah Kunst
“Making money is a taboo here, right? I think that's part of the problem.” - Neil Shah
“Having money isn't, though.” - Sarah Kunst
What are some of the main challenges we’re facing in the UK when it comes to increasing capital allocation for innovation?
Hussein Kanji believes there is a structural issue when it comes to increasing access to institutional capital within VC. Reforms such as Mansion House are a step in the right direction, but Hussein remains skeptical on how much impact they will have in the real-world
“The structural problem that I have is it's not a capital issue in these markets, it's almost always a talent issue. You have this big pool of capital that's going to allocate money to fund managers. And you have to be a reasonably experienced LP to discern who should get that capital. We don't have that many LPs who are trained in venture in the UK. We don't have that many GPs. It's a nascent industry still. It's massively grown. I'm super grateful that we have a thriving economy, but it is still not a particularly big economy. So where are these pension funds going to find the folks to invest this capital?” - Hussein Kanji
In terms of capital markets, what is being done to improve the situation in the UK and make the public market more appealing?
With some Unicorn founders recently stating they would prefer to list in the US than the UK, Neil Shah shares insights on what the London Stock Exchange is doing to improve the situation…
“I can tell you for a fact that it's not as bleak as the Twitter narrative is. We don't need to become the 53rd state of the US, We've had 16 IPOs year to date. To summarize, there are five things we're doing through the Capital Markets Industry Task Force: The first thing is leveling the playing field. We've just undertaken the largest set of reforms in about 40 years, where you can have dual class shares, you can have lower free float, you can do M&A and raise capital a lot easier than it used to be. Second thing is improving access to equity research, and incentivizing that. It’s a big issue in life sciences, less so in tech, where we've got 45 fintech analysts in London. Third thing is unlocking risk capital, which we’ve touched on. And fourth thing is corporate governance. We're in a remarkably better place than we were. The fifth thing we're doing is building the world's first regulated crossover market for secondary, which will enable capital to get recycled faster. And the glove that fits these five fingers is the culture and how we talk about this. We're really good at talking ourselves down in the UK and not celebrating the actual things that we're good at. And I think that needs to change.” - Neil Shah
What are you most optimistic about looking forward to 2025?
Despite the wider tendency towards doom & gloom, the panelists felt there’s a lot to be positive about in the UK looking forward. From the strength of early-stage companies based here, to London’s wider reputation within Europe, there are reasons to be optimistic about the upcoming year…
“We are super excited about the UK. In the last 12 years we have never seen as many exciting early stage companies in the broader financial services space in the UK. We look at Europe from London, and almost half of the companies that we work on are actually based in London or in the UK. So, we're super pumped to make a few really interesting investments in 2025, and a very high chance of them being based in the UK.” - Toby Triebel
“10 to 15 years ago when we had these panels, we questioned whether there was anything happening in the UK. I think that question is gone now. And if I extend that to 2035 it's very clear we're going to build something of substance here. We're on the right trajectory. We're on the right journey. Yes, there are some problems on the edges. Yes, there are some differences of opinion… But by and large, there's an economy here that's working. And even with some government interference, I don't think it's going to be able to muck it up.” - Hussein Kanji
“I think that the result of a certain election is going to be mostly terrible for the world. But I think it will be good for capital markets globally, certainly good for the price of crypto, and good for all of the Americans who are like, you know what? We're finally doing it. We're getting out of here… And I think that the US falling out of global favor in terms of a place to be is good for the UK most directly.” - Sarah Kunst
“We're going to see IPOs from the UK and internationally for companies that are too small to succeed in the States. There are research analysts available. There's capital available for these companies. 60% of the capital in London is international. So that's what's getting me out of bed right now, is providing liquidity.” - Neil Shah
Ready to turn your vision into reality and build a world-changing company? The next Antler residency in the UK kicks off in April 2025 in London. Apply to our UK residency. Or apply to one of Antler’s other 25+ locations around the world.
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