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Silicon Britain Could Every Region Soon Be Home to a Thriving Tech Cluster?

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Silicon Britain Could Every Region Soon Be Home to a Thriving Tech Cluster? FUNDING THE FUTURE SUMMER 2014 JOURNAL Silicon Britain Could every region soon be home to a thriving tech cluster? Taking up the mantle Putting a price on bitcoin No holding back New BVCA chairman Tim Farazmand Are investors willing to take a gamble Why Germany’s economy has continued reveals his plans for the year ahead on a mysterious virtual currency? to grow amid the eurozone crisis Introduction Contents The rise of the UK tech cluster, British investors’ lukewarm response to bitcoin-related ventures and Germany’s economy set the agenda for this issue The UK technology industry is one of published earlier this year by the BVCA, the country’s shining lights. Be it biotech which showcases this country’s vast or cleantech, hardware or software, array of talent across all technological Britain is undoubtedly a legitimate player sectors. When flicking through the on the world stage. report and our cover story, it is clear But much of the focus – from that the UK is a nation of enterprise and 20 politicians, officials and the media entrepreneurialism, and one in which – often centres on London. This is perhaps venture capital and private equity have an The story of inevitable given its cultural, economic important role to play. UK“ innovation and political dominance, yet focusing on Our members invest in ventures that the capital often means the work being will be central to Britain’s ability to 26 involves more done across the country is overlooked or compete and lead in the new economy. downplayed. While London and the Tech High-growth businesses, backed by than just the City initiative continue to do outstanding experienced investors, can help Britain things, the story of UK innovation involves to achieve the scientific and technological capital more than just the capital. innovation that is crucial to our position ” The BVCA will be campaigning in the global economy. about this issue in the run-up to next One innovation taking the world by year’s general election. Rebalancing the storm, which the British cannot take economy is not just about growing sectors, credit for, is the rise of bitcoin. Last but also regions, to ensure stronger, more year saw a number of venture capital sustainable economic growth and an investments in bitcoin-related start-ups economy that is better placed to withstand in the US, but so far there has been little financial shocks. interest in Britain. Our piece starting on Our cover story (page 20) is very page 14 looks at why and whether things much in this vein, looking at the string may change. of technology clusters throughout the Elsewhere, we look at Germany 14 UK. Following on from Tech Country, (page 26), which, like Britain, is another a substantial piece of research we European economic powerhouse that is undertook last year, the article finds that home to some interesting companies and News Crunching European Creative spirit entrepreneurialism and innovation are tech clusters. The tech industry in Berlin 04 Stories on the regional 18 the numbers 26 powerhouse 38 How leading animation, thriving across the land, from the hi-tech is particularly strong to the point where BVCA Management Team Research showing that most With a strong economy, solid TV, films and music companies hub in Cambridge and life sciences in it is locked in a battle with London for Awards, banking union and the Q1 2014 deals in the UK were trade links and robust industries, have turned the UK into a hotbed Manchester, to Bristol’s expertise in the crown of Europe’s leading tech hub. European fund rules backed by venture capital and Germany is one of Europe’s most of creativity semi-conductors and the oil and gas focus But unlike World Cup 2014, this is one private equity firms attractive places to invest of Aberdeen. particular contest I expect us to win. Taking centre stage Guest columnist The rise of UK tech clusters was also 10 New BVCA chairman Tech nation Missing the 42 Celia Moore from evident in Britain’s Hot Talent, a book Tim Hames, Director General Tim Farazmand talks about 20 Silicon Roundabout may 30 vital step London Business School on business, private equity and his grab the headlines, but the UK is How failing to implement making ethical investments when love of rock music home to many tech clusters that business methodology properly under the influence of money deserve attention can affect your business Editor Rob Morris Content Director Janice Warman Creative Director Ben Barrett Reserve your copy of the BVCA Journal. Art Director David Donaghy Designer Dean Buckley Picture Editor Johanna Ward To guarantee that you receive your copy Going for broke Publisher Georgina Beach Production Director John Faulkner of the next edition, please email Mia Iwama 14 Can British investors get Laying roots Big appetite Hastings at [email protected] behind bitcoin-related ventures Guernsey is fast David Salkeld, CEO Managing Director Claire Oldfield CEO Martin MacConnol To advertise in the magazine, please contact 25 33 BVCA Journal is published on behalf of the BVCA by Wardour, 5th Floor, Drury House, Peter Sandberg on +44 (0)20 7420 1820 or when so little is known about the becoming a top private equity of food producer Symington’s, 34–43 Russell Street, London WC2B 5HA Tel +44 (0)20 7010 0999 www.wardour.co.uk at [email protected] virtual currency? David Turner hub, attracting some of the is still hungry for growth after ILLUSTRATION: PETER CROWTHER ASSOCS speaks to industry insiders industry’s big players years of steady expansion 2 BVCAJOURNAL BVCAJOURNAL 3 NEWS News ELTIF progress good for private equity Banking union Progress on the European Long-term (AIFMD) if they are to become Investment Funds (ELTIF) regulation authorised under the ELTIF regulation. continues with encouraging prospects Under the AIFMD, it will only be takes step forward for the private equity and venture capital industry. Long-term investment is a popular Patient capital was a remedy Taxpayers in the EU will no longer topic in Brussels, with the provision for the financial sector’s short- have to bail out struggling banks after of ‘patient’ capital a remedy for the a plan to create a common system for financial sector’s short-term speculative term speculative behaviour handling banking crises was approved. behaviour prior to the crash. Members In March, the European Parliament of both the European Parliament and before the economic crash agreed to introduce the Single Council of Ministers are keen to make Resolution Mechanism, a eurozone the voluntary regime as attractive as possible to market cross-border to system to shut failing banks, and a possible for would-be fund managers. professional, non-retail investors. €55 billion shared fund to cover its Prospective managers must adhere The European Parliament side costs, paid for by the banks rather than fully to the terms of the Alternative has proposed increased flexibility by taxpayers in Europe. Investment Fund Managers Directive surrounding how and when assets can The fund will be used to shore up from a member state with a depressed be disposed of, as well as the possibility European banks that hit hard times, banking system. In March 2013, Cyprus that the ELTIF itself can be structured as many did following the onset of the was plunged into crisis when the EU as a partnership. Although the Council global economic downturn in 2008. But revealed that anyone with more than of Ministers’ position is not as clear, some critics claim that €55 billion is not €100,000 in a Cypriot account could lose the broad direction of debate suggests enough to protect banks from the losses up to 40% of their savings to finance it is possible to find a middle ground. that the sector has seen in recent years. a bank bailout. The news led to mass With the European Parliament elections Others say that the final decision on panic, with thousands of people in taking place in May, more talks were how to deal with a bank in trouble could Cyprus scambling to withdraw cash expected to be scheduled for this involve more than 100 decision makers, from their bank accounts. autumn at the earliest. which, in their view, is too many to Michel Barnier, European Some investors and industry insiders reach a consensus quickly. Commissioner for the internal market hope that the talks will eventually lead Some also believe that the system and services, said that the common to a new fund vehicle that will facilitate lacks a robust EU-wide deposit system is “not a perfect construction”, the role already played by private equity guarantee scheme. Without it, there is but one that was won through the “spirit in providing long-term finance to the nothing to stop a mass exodus of funds of compromise”. real economy. News in brief Colombia calling respective countries. The present in Bogotá, and may Tax relief for The tax relief is the first of Venture Capital Trusts. While the £5 million that the BVCA for British investors BVCA, in collaboration with the help to cover the cost of flights social investments its kind, promising to catapult likely to encourage investors has been pushing for in its Colombian capital Bogotá British Embassy, represented and/or accommodation for Social investment in the UK has social impact investment into to commit money to social consultation response. will host the second annual the UK industry at the 2013 those interested in exploring been given a significant boost the mainstream and have a enterprises, the overall The Government aims to Colombia Start-up and Investor summit and hopes to be investment opportunities in with the launch of the Social real positive effect on social investment limit a social introduce a larger scheme with Summit this October.
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