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For decades now startups that registered in the UK stood the chance of reaching 500 million consumers across Europe.
But with the uncertainty around Brexit, the UK’s pending withdrawal from the EU, should African startups looking to scale globally consider moving their businesses to the UK?
Dylan Thomas, the director for technology, entrepreneurship and advanced manufacturing in the UK’s Department for International Trade told Ventureburn in a meeting on Monday (10 September) in Cape Town, that Brexit will change only the country’s political and not its economic relationship with the EU.
“From an economic point of view, certainly, the UK government’s ambition is to have a comprehensive free trade agreement, mutual recognition on standards and regulation, and ensure that there’s a visa system and process to retain access to talent,” said Thomas.
‘UK better at taking companies into other markets’
The UK has long positioned itself as a strategic hub for companies looking to scale globally. Entrepreneurs can register companies in the country within 48 hours, benefit from a 20% corporation tax and receive support from the UK.
For two entrepreneurs who help promote the UK as a hub for startups to internationalise, the UK is still the place for startups to be, if you want to expand overseas.
Even with Brexit looming, the UK is still the place for startups to be, if you want to expand overseas, argue dealmaker duo
One of the duo, Stephen Mooney — the co-founder of software companies ENXSuite, iVeridis and Synoptic Technologies — believes that in a post-Brexit or in the current world, the UK will be better suited at taking companies into other markets.
“Whether it’s the Gulf, India, or kind of opening the door to Singapore and Hong Kong,” said Mooney, an American citizen who himself actually moved a business from the US to the UK.
Anthony Sheehan backs this up. He’s the founder of mobile news platform Near You Now and drone startup Hoverworks. He says startups considering moving to the UK should just get a move on and build their companies.
“You’ll be done and dusted, and out the other end before this thing plays out. So, just be acutely aware of the one or two percent of the discussion that affects your customers and your segment,” he advised.
“So, if you’re in fintech, you need to know the regulations and the potential outcomes, but ignore the rest of it. The rest of it is noise to a technology founder. Get on build your business it you will be moving way quicker than this train,” he added.
Over 400 foreign companies helped
Sheehan and Mooney, who are currently in South Africa, are part of the UK trade department’s venture capital initiative, the Global Entrepreneur Programme (GEP).
The initiative aims to assist international entrepreneurs and early-stage tech startups establish their businesses in the UK and then scale internationally from there.
Since GEP’s establishment in 2003 over 400 companies from around the world, including a number from South Africa (see the list below) have moved their businesses to the UK, and are now using the country as a strategic hub to scale from.
The programme uses a team of entrepreneurs known as dealmakers who provide overseas entrepreneurs with free support services that include assistance with business plans, introduction to investor networks, guidance on scaling internationally, mentoring from experienced entrepreneurs.
The dealmakers also helps identify early-stage tech startups that are likely to benefit from scaling from the UK.
Soft landing in the UK
Mooney and Sheehan — who will be holding a talk in Johannesburg this Friday (14 September) on how to scale globally from the UK — also explained how the GEP supports international entrepreneurs. This support includes tips on what pitfalls to avoid, advice on how to set up a bank account (which is apparently difficult), and assistance around getting a visa.
“But the value I think is plugging them into entrepreneurial networks, into investors, helping them with you know, strategy, go to market… And then particularly from there, plugging them into export opportunities as well,” said Sheehan.
In addition, entrepreneurs can benefit from each dealmaker’s personal networks, the international entrepreneurs also stand to benefit from the UK government’s trade posts which he said are “pretty much in every country in the world”.
“So, we’ve got a series of, you know, South African entrepreneurs looking to the rest of Africa. But a really good way to do that it’s actually through the UK government’s network. So it will open those doors and open up those networks,” added Sheehan.
Mooney said African tech startups with an ambition to scale and do so by using the UK as a base to raise more capital could approach the GEP for assistance.
“If you talk through the local post, and people here like Phumla Phumla Mntambo — the DIT’s trade and investment advisor for South Africa — through our website and networking, we tend to see a lot of companies and just have that conversation with them. And it’s an ongoing programme,” he said.
The SA companies that GEP has assisted so far are:
Featured image: Global Entrepreneur Programme via Youtube