Friday 1 March 2019 1:03 pm

London startup numbers rise in face of Brexit uncertainty

The number of new startups created each year in London is higher now than it was before the EU referendum, according to public data.

While 205,325 new businesses started life in 2016, the year of the Brexit vote, entrepreneurs founded 216,204 companies last year, the Office for National Statistics (ONS) data reveals.

Read more: The number of new tech startups in the UK grew 14 per cent last year

The figure for 2018 is six per cent higher than 2017's figures, when uncertainty surrounding the UK's departure from the EU hit business creation figures, seeing them dip to 203,097.

Luke Davis, founder of IW Capital, told City A.M. the rise in 2018 showed evidence of “a concerted move to get on with business after some initial Brexit uncertainty”.

He added: “Being an entrepreneur and owning a business has become, in recent years especially, a very cool path to take for professionals in their career.

“This trend has given a huge amount of confidence to those looking to start a business, backed by a huge range of fantastic, innovative ideas. The rise in the number of women entrepreneurs, due to rising confidence and increasing support, has also had a significant impact.”

Read more: London keeps crown as Europe's top hub for tech unicorns

London's 2016 to 2018 growth rate was lower than the UK average of six per cent, but it beat other cities like Bristol, Glasgow, Edinburgh, Cambridge and Manchester, which saw business creation drop.

Davis said technology firms were behind the rise, with IW Capital seeing more deal flow than ever in 2018, as it was revealed today that London kept its crown as Europe's tech hub for tech startups.

“Sectors such as fintech have been enormously trendy to invest into in recent years,” he added.

“The financial crash of 2008 created a huge amount of mistrust toward big banks and fintech entrepreneurs have taken advantage of that.

“There are some brilliant ideas in fintech and the problems they solve are widely unrelated to Brexit meaning that investment is likely to continue to grow.”

Read more: British manufacturing job losses hit six-year high amid Brexit turmoil

Reflecting on performance in 2019 so far, he added: “Brexit and the prospect of no-deal is not really a feature in our discussions and isn’t slowing investment into the businesses we work with.”