Brighton & Hove’s ‘Silicon Beach’ Now Has More Start-Ups Than Anywhere Else In Britain
Bean bags litter communal areas; jeans are the norm; and there’s a canteen offering everything from fresh fruit, herbal teas, energy drinks and fine coffee, a scene straight out of Silicon Valley, right?
We’re not talking about a workplace in California’s tech hub, nor in London’s so-called “Silicon Roundabout”. Instead, we’re looking at Brighton’s tech scene, and the office of Shadow Foundr, one of the many fintech start-ups that have set up shop by the seaside, in Brighton.
While Brighton is typically known as a bohemian holiday city, in recent years it has carved out a new niche for itself as a popular home for exciting start-ups, particularly in the financial technology sector.
With a cheaper cost of living than London and a less congested, more relaxed environment, entrepreneurs have flocked to the city dubbed “Silicon Beach” by locals. Employment in both the ICT and financial services sector in Brighton is well above the national average, a recent study by think tank Localis showed, while the presence of two major universities – Sussex and Brighton – makes it easy for firms to find skilled talent.
According to Brighton for Business, the city now has more start-ups per capita than anywhere else in Britain.
Shadow Foundr is one company which can be considered a trailblazer for such activity.
Set up in August 2015, Shadow Foundr is an online investment platform with a crowdfunding element that enables everyday people to follow the lead of experienced investors into early-stage companies.
Chief Operating Officer Jason Kluver said he chose to set up in Brighton “because it has a Silicon Valley feel to it, it is far less crowded than London and it’s a place on the up”.
“Brighton is a wonderful place to do business; it has a vibrant, high energy, digital start-up culture, which fits perfectly with Shadow Foundr, our business and the people who work here. It’s also highly cosmopolitan and for that reason is often called ‘London by the sea’.
“We wanted to be a part of this. There is also a young and highly qualified labour market in the city.”
Since Shadow Foundr started it has successfully completed 17 raises for a portfolio of companies, raising a total of more than £16 million (Dh78.6m).
The companies on its platform come from a variety of sectors, from tech to business to the environment. The common theme is that they are all “innovative, scalable and disruptive”, Mr Kluver said – the three buzzwords that make the world of fintech go round.
More than 650 investors are signed up to the Shadow Foundr platform, including many from overseas, although not yet from the UAE. The platform is fully automated and described as “user-friendly”.
The company has grown its revenue more than tenfold since 2015, from £79,000 to an estimated £800,000 by the end of this year, which is when it will become profitable.
“With a proven concept and a clear path to profit, we are now extremely well placed to scale rapidly and advance towards an exciting exit opportunity,” Mr Kluver said. “As our track record continues to go from strength to strength, we believe we will become an excellent acquisition prospect.”
According to Mr Kluver, more money is pouring into the Brighton economy than ever before.
“Brighton is not at the same level or volume as London in terms of fintech activity, but it is starting to attract investment from many sources – in the UK and overseas – interested in early stage fintech and digital start-ups, property, and other asset classes,” he said.
Meanwhile, the global fintech market continues to grow rapidly, with a current estimated value of more than US$13.6 billion.
The UK will continue to be a key player in this space, despite the uncertainty around Brexit, Mr Kluver added.
“Brexit is inevitable, and we just need to get on with things now,” he said.
“We believe Brexit will have its associated pains, however, it will also present more opportunities for shrewd investors and we are well-positioned to be a significant player among these opportunities.”