“There is still plenty of money “flying around in Europe” to back solid tech start-up businesses, despite Brexit leaving the UK temporarily in “limbo”, says OpenOcean founder Richard Muirhead
One of the earliest angel investors in CityMapper, the London based journey mapping app which has gone on to raise $50m in 3 rounds of funding, says that 3 months on, he believes Brexit has left the nation “in limbo” and falling behind countries such as Germany, France and Sweden but that a post Brexit world “will only reinforce the digital bonds the start-up community has built across Europe over the last 20 years and more.”
Besides his investment in CityMapper Richard Muirhead is also the founding partner of seed stage investor Firestartr, which is described on his LinkedIn page as a “leading seed investor writes £250k cheques monthly”, and a partner at OpenOcean an early stage VC firm founded by the ex-management team at MySQL, who say that, for the right business and team, they will “write a ‘first cheque’ for around €2.5m and to invest up to 5 times that in the very best companies.”
“Regardless of whether one actually thinks that the scheduling of the vote; the phrasing of the choice; the nature of the campaign or the decision itself are ‘good things’…the Brexit referendum has left the nation in limbo”, said Muirhead through his PR Agency this week.
The uncertainty created by the delay in triggering Article 50 has led to a feeding freezy between other European countries looking to exploit “this messy hiatus”, as Muirhead refers to it.
“CEOs and Chief Investment Officers seek certainty and the reality is that competition between nations shows no mercy. Germany, France, Sweden and others are exploiting this messy hiatus to enhance their appeal as a destination for work, incorporation and investment. And I don’t blame them. London’s position as the hub of European tech is a prize indeed.”
But Muirhead concludes that it has been the ability of start-up companies to work in a “distributed fashion” cross border that has made it the success it has been.
“However, European tech companies have long been built in a distributed fashion – for example, developers may be located in the Baltics, with commercial operations in London as a waypoint for a US and global expansion.”
Successes like Skype were grown this way, and countless other startups being built right now show that startups, in a post-Brexit world can continue to operate across borders, even if the drawbridge raises.”
“Arguably, this will only reinforce the digital bonds the startup community has built across Europe over the last 20 years and more.”
Muirhead’s Investments through OpenOcean, which has grown to a team of more than 12, described on the company website as “engineers, dreamers and do-ers that have scaled six software businesses over the past two decades” include HeavenHR, and SaaS platform to manage core HR functions, Unacast, the world’s largest proximity network, and web data platform import.io.
Previous investments include MySQL, which raised $40.8m before it was acquired by Sun Microsystems in 2008 for £1 billion, money transfer “unicorn” (a start-upsless than 10 years old with a valuation of over $1 billion) Transferwise and Cluster HQ, based in Bristol, UK, which completed a $12m Series A in 2015.
London’s ability to build bridges with Europe’s start-up community whilst maintaining a “special” relationship with the US, where Mayor Sadiq Khan this week promoting London and declaring it “open for business”, despite its Brexit woes, has traditionally been one of its greatest strengths.
Doubtless both relationships will be tested over the coming months, and most likely years (although Boris Johnson begs to differ) – at least it’s good to know that the likes of Muirhead, investing more than a quarter of a million per month, are confident the tech scene will not just pull through, but continue to flourish.