More than 40 per cent of entrepreneurs say that the Brexit vote has put them off London as a base for their startup, new research from NUMA Barcelona has revealed. Immigration and the availability of funding are the two most common reasons cited for the concern.The recent survey of 142 entrepreneurs by NUMA Barcelona, Europe’s first growth acceleration programme for tech startups, also showed only 18 per cent of respondents believe London’s benefits as a startup host outweigh any potential drawbacks from Brexit and 42 per cent are not planning on basing their startups in London.
However, another 41 per cent thought it was too early to assess the impact on London of the Brexit vote.
The survey also revealed the most important factors for startups when it comes to picking a location to found their business. In London, local language and the size of the startup ecosystem, remained the most important factors, with 57 per cent and 48 per cent of respondents choosing it respectively. This rating was higher than in other European cities like Paris, Barcelona and Berlin.
However, other factors suggest that startups are now looking for cities outside of London to set up shop too. For example, cost of living ranked highest in Barcelona, with 68 per cent of respondents feeling this way, whilst Berlin ranked highest from a developer hiring perspective, which 53 per cent of respondents felt was a key consideration.
Pep Gomez, NUMA Barcelona’s chairman and MD, said: “Companies continue to see the benefits of being located in a financial hub with powerful connections and home to venture capitalists, but this won’t be enough to make all parts of a business stay. Brexit has put overseas firms off UK commercial properties so companies are likely to want to move their developer teams to other European cities for a better quality of life and cheaper labour costs."
“However, C-level executive teams are likely to remain in London to make the most of the still very appealing networking opportunities, management schemes and tax advantages”.