London: The Battle of Boroughs
Farzana Haque, 24 August 2023
We often talk of London as one homogenous group, but in reality, the capital is broken down into 32 distinct boroughs.
In this article, we’re diving into the high-growth ecosystems across London, comparing and contrasting them using heat maps.
Currently, over 14k companies operating in London meet one or more of our tracking triggers for high-growth companies. According to the latest financial data, we can reveal that these high-growth companies have an average of 72 employees and have turned over a combined £167b.
The most common sectors within London are technology-based. Indeed, 13.9% of high-growth London-based companies are operating within the SaaS sector. Amongst the most common tech verticals, we have fintech with 7.2% of companies falling under this sector and 6.9% in artificial intelligence.
Male-founded companies make up 80.7% of the ecosystem whilst female-founded ones account for only 17.4%. Disappointing as this may be, it’s in line with the wider trend in UK high-growth companies, where male-founded companies account for 80.5% and female-founded ones make up 17.8% accordingly.
The London company ecosystem is fairly mature, with 35.9% of companies operating in the seed change and 36.4%, operating in the later stages of growth and established.
When it comes to the top funders in the capital, Seedrs comes in first, participating in a staggering 879 fundraisings. Following behind is Crowdcube (partaking in 672 equity rounds), Future Fund with 166 investments and SFC Capital with 155 investments.
Turning up the heat
Looking at the breakdown of London companies across the 32 boroughs, we find that the inner boroughs of Westminster, City of London, Camden, Islington and Hackney are the most saturated.
Equity investment is the most common form of growth for startups. Here, we find that funding is most concentrated in the central boroughs. Interestingly, the four regions with the lowest percentage of companies receiving equity funding (Redbridge, Havering, Barking and Dagenham and Bexley) are all neighbouring each other and situated in the east of the capital.
Innovation grants are another method of growth. With 12% of the companies located in Lambeth securing innovation grants, Lambeth takes the top spot. Meanwhile, just 1% of companies based in Redbridge have received grant funding. This type of funding is traditionally associated with medical/ healthcare sectors, so perhaps this alludes to the kind of businesses situated in these respective boroughs.
The four boroughs with the lowest percentage of companies receiving equity funding are the four boroughs with the highest percentages of companies with 20% scaleup status. Interestingly—by this metric—it is actually the central boroughs with the lowest proportion of companies achieving 20% scaleup.
This could be indicative of many factors. For example, it is feasible that as companies grow their headcount and need larger offices, they opt to relocate to outer boroughs where rent for office space is more affordable.
What are your interpretations of the data? Email us your thoughts: firstname.lastname@example.org
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