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partner in a model new $1bn enterprise capital fund has warned that London dangers shedding its status as a world tech hub as Brexit has made attracting talent “substantially more difficult”.
Gareth Jefferies, accomplice at RTP Global, introduced a brand new fund immediately that can supply $1 billion to tech startups, with a selected focus on AI , enterprise software program, fintech , e-commerce and edtech.
The fund will make investments $660 million in early-stage companies, plus $340 million in “breakout” corporations inside RTP’s portfolio. Previous investments embrace cybersecurity agency DataDog, supply enterprise DeliveryHero and funds app Cred.
The cash shall be invested in companies throughout the globe, as RTP has places of work in London, Paris, Amsterdam, New York, Dubai and Bangalore. It comes at a time when London’s standing as a world tech hub as been thrown into doubt, as main companies shun the capital for the US.
Jeffries instructed the Standard that london remained a world tech tub, however a more durable hiring surroundings may put this as threat.
“London is undoubtedly still a major global tech hub, but it must adapt and evolve if it is to maintain its position as a great place to build a technology company,” he mentioned.
“The city’s ability to attract international talent was one of the most important drivers historically, but Brexit has made that substantially more difficult and costly for both startups and for talent: the new tech visa schemes are a start, but they’re not sufficient on their own.
“At the same time, tech ecosystems are flourishing all across Europe, and many governments are doing their part to make these hubs more and more attractive as bases to build great tech companies. France has been a great case study for how public policy and funding can really accelerate tech ecosystem development over the past decade.
“If London, and the UK more broadly, is serious about continuing to be a global contender in tech, it must make talent attraction a priority, and it would do well to look overseas and take inspiration from some of the successful initiatives in Europe and beyond.”
The launch of a fund of this dimension is a optimistic signal for the startup surroundings, after funding dried up previously 12 months. But Jefferies warned that the panorama of 2021 is unlikely to come back again.
“When the market turned last year, a lot of funds pulled the handbrake out of panic or self-preservation as they were aware that it would be harder for them to raise their next funds, so needed to slow down,” Jefferies mentioned. “So, it went artificially low for a while, but there’s still plenty of dry powder in the market and we’re seeing deployment come up from those low levels.
“However, it’s not a ‘bounce back’ in the classic sense: the zero interest rate environment was an extreme outlier, and I don’t expect we will see market activity return to what we observed in the years up to and including 2021. What we’re seeing now is a reversion to a long-term mean on both the LP and the VC sides.”
