The vast majority, or 87%, of London tech companies believe that Brexit has damaged London's international reputation as one in four tech startups report losing out on investment as a direct result of the UK's decision to leave the European Union (EU), tech entrepreneur network Tech London Advocates has found.
A further 39% of tech companies said that Brexit has made it harder to gain access to capital in London, with 60% reporting that they feel it is going to get even harder in the coming 12 months.
Access to tech talent was another big concern that Tech London Advocates discovered, as 60% of the London tech entrepreneurs in the survey said that it has been harder to attract international talent during Brexit negotiations. An alarming 29% of tech firms have gone on to formally raise concerns about changing visa and immigration regulations. Just 5%, however, revealed that new hires had changed their mind about moving to the UK as a result of Brexit.
"It is no surprise that London tech investment fell in 2018 when so many tech companies are experiencing investors deferring decisions until they see some clarity around Brexit," remarked Russ Shaw, founder of Tech London Advocates. "One thing is certain – the political situation is harming our fastest-growing industry and making access to capital and talent harder than ever before."
Despite the Tech London Advocates' gloomy findings, market analysis firm Vacancy Soft recently shared its predictions that London is set to overtake San Francisco become the world's leading city for fintech unicorns. EY also revealed that the UK has taken first place in a list of the most attractive countries for business investors over the coming year.
"What hasn't changed is that the UK has great companies, great talent, great tech and great IP. These assets attract capital," commented Steve Krouskos, global vice chair for transaction advisory services at EY. "Also, remember the UK isn't the only country dealing with significant geopolitical challenges."