TECHNOLOGY businesses are booming in Hackney, with the success of the Silicon Roundabout hub spreading throughout the borough.
Start-ups such as TweetDeck, Songkick and Last.fm have all set up camp around the Old Street roundabout, battling against the financial downturn to bring in millions of pounds each year.
But developments in Sweden are beginning to pull Europe’s largest new tech firms away from London. New figures suggest that US venture capitalists are now pumping less money into Hackney – choosing instead to invest in Stockholm-based web companies.
Data from Thomson Reuters show that US venture capital firms invested nearly $200m in Swedish tech companies last year and $308m in 2010, more than twice the average amount invested between 2002 and 2008. Reuters analysists say this is now rivalling annual investments into Silicon Roundabout.
The Nordic investment boom has been triggered by the success of online music service Spotify, which was set up in the Swedish capital in 2008. Before this, venture capitalists had been put off Stockholm as it was still recovering from the dotcom crash. But each new investment in the Swedish capital is an opportunity missed for the UK’s own web business hub in Hackney.
Hopes are still high for London’s magic roundabout however, and the British Government has said it hopes to see the Hackney hub spread as far as the Olympic Village in Stratford.
Speaking on a visit to the area in November, Prime Minister David Cameron said: “As a government, we are determined to continue doing everything we can to help support and accelerate this growth.”
“We have already taken action such as introducing the Entrepreneurs Visa and tax breaks like the Enterprise Investment Scheme.
“We are also looking at new ways we can protect Intellectual Property. But we are not done yet – we’re looking forward to continuing our work with the community.”
Tech companies in east London have enjoyed huge successes in the past three years, despite the country’s financial difficulties. Accounts for the Scrutton Street-based printing company, Moo.com, show a gross profit increase of around £2.5m over the course of one year, with 2011’s profits totalling just over £7m.
Meanwhile, online gaming company Mind Candy – which has its UK headquarters on Shoreditch High Street – recently announced annual profits of £6m, up from £1.4m the year before.
