[HN Gopher] How London became the rest of the world's startup ca...
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How London became the rest of the world's startup capital
https://archive.ph/ebA1T
Author : ellieh
Score : 73 points
Date : 2026-01-28 00:16 UTC (22 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| claude_sh_1959 wrote:
| Smells like marketing stuff.. there are plenty of other places
| that i think are better.
| paradox460 wrote:
| Sand Hill road
| arjie wrote:
| That would be pretty funny to say. Where are America's
| startups founded? Principally the San Francisco Bay Area.
| What about the Rest of the World? Oh, principally the San
| Francisco Bay Area.
|
| It reminds me of the funny fact that for years I worked at a
| building in Bush St. that was nice but not particularly
| remarkable only to find out that that's where Saudi Aramco
| was originally headquartered when some Twitter post counted
| them for the Bay Area for their "Where are the top market
| capped public companies from?" segment.
| kaashif wrote:
| It's not based on marketing, it appears to be based on metrics
| like amount of venture capital raised.
| alephnerd wrote:
| Having a London domicile often leads to an overstating in
| venture capital raised _for_ the UK ecosystem.
|
| For example, I've funded Polish and Indian startups that
| chose the UK as their legal domicile because we couldn't be
| bothered to hire a legal team to draft a contract to Polish
| or Indian specifications.
|
| Builder.ai [0] is a great example of that - it was an Indian
| startup that was domiciled in London to simplify raising
| capital from Gulf investors.
|
| [0] - https://www.ft.com/content/926f4969-fda7-4e78-b106-4888
| c8704...
| fakedang wrote:
| Startups like Builder AI use London because a.) they want
| to raise money from filthy rich Arab investors and b.)
| those guys are not known for doing much due diligence. They
| go more by vibes and hype and who's on the existing cap
| table. Also c.) they are very comfortable with London
| because it was so much easier back in the day to launder or
| siphon away funds from their home countries. London is an
| extremely popular destination for Gulf Arabs.
|
| You'll get a lot of shady startups of that kind in London
| for this reason.
| noosphr wrote:
| Given that London has little else going for it other than a
| financial industry it's not surprising money is raised and
| companies are registered there.
|
| That said I don't know anyone doing a startup in London. But
| I know dozens in Berlin without even thinking about it.
| dukeyukey wrote:
| Eh, I know quite a few. LegalTech, hardware, obviously
| fintech, quite a bit of AI. But I work at a London startup
| so my social circle might be different to yours.
| jacquesm wrote:
| It should be based on the number of successes relative to the
| amount raised or ROI and that picture is quite different. In
| that sense London is _way_ behind SV.
| dukeyukey wrote:
| For you specifically that may be true, but the numbers say
| London dominates by _far_.
| personjerry wrote:
| I'm waiting for the yearly "Waterloo is the Silicon Valley of
| Canada" article that always fails to deliver its promise.
|
| I grew up in Waterloo but it's just not it lol.
| captain_coffee wrote:
| Could you give only a few examples from those PLENTY of other
| places that are better? Like the first 10 that come to your
| mind, you made me very curious!
| flawn wrote:
| Bruder, komm nach Berlin or frere, allez a Paris
| lifestyleguru wrote:
| Come to Germany, the letters from Rundfunkbeitrag and Waldorf
| Frommer are already waiting for you!
| renewiltord wrote:
| I arrive in 2026. Decide to start a startup. By the year 2038,
| the state mandated reader of legal documents has finished
| reading out aloud to me and my co-founder. Now we find a VC.
| His documents need to be read to us both. But the Y2K38 problem
| strikes. He thinks we are in the year 1970. He needs to read us
| the "ancient company addendum". While he's reading he chokes
| and keels over, dead from the emissions from his Volkswagen.
| Our ARR may be zero, but what about our government grants? Also
| zero.
|
| My friend. He starts in France in 2026. The government mandates
| that the retiree earnings to worker earnings ratio must be
| fixed by law to what it was in 2025: 130%. For every employee I
| hire, I must also pay a retiree 1.3 times his salary. He visits
| me via train in 2038. I ask him how his trip was. Turns out he
| actually got on Deutsche Bahn train back then in 2026. I just
| didn't know because he spent all his time on Twitter explaining
| why the US approach to startups won't work. He's lucky. Pretty
| short delay for DB train.
| michaelscott wrote:
| This was crafted with a subtlety that captures the
| continental combination of infrastructural petrification and
| untethered pride perfectly. Wonderful
| romanhn wrote:
| A different perspective:
| https://x.com/aakashgupta/status/2016375397131420005
|
| TL;DR: What London actually built is Europe's most efficient farm
| system for US acquirers. The city does the expensive, risky work
| of finding founders, funding early rounds, and proving product-
| market fit. American companies wait until the risk is de-risked,
| then buy the winners at discounts enabled by London's shrinking
| public markets.
| philipwhiuk wrote:
| There's an argument that some of these takeovers should have
| been blocked.
| dukeyukey wrote:
| > enabled by London's shrinking public markets
|
| That doesn't seem to be true?
| alephnerd wrote:
| It is -
| https://www.bloomberg.com/news/articles/2025-09-30/london-
| dr...
|
| Edit: can't reply
|
| The majority of IPOs in 2025 were in 4 markets - US, China,
| Hong Kong, India, and South Korea [0]. It's really hard to
| exit in the LSE currently, and this article is self
| congratulatory while ignoring major recent (past 2-3 years)
| mistakes that negatively impacted the entrepreneurship scene
| in the UK (eg. the revocation of funding for Tech Nation [1]
| and the ongoing leadership crisis at Monzo [2] which makes no
| one look good).
|
| [0] - https://www.ey.com/en_pt/insights/ipo/trends
|
| [1] - https://sifted.eu/articles/tech-nation-shutting-down
|
| [2] - https://www.ft.com/content/3405c6f3-931b-4fe3-a169-a966
| 5a132...
| dukeyukey wrote:
| No it isn't, London's IPOs in 2025 were mostly towards the
| end of the year, after that article was written. London
| ended up about 8th worldwide for issuances in 2025 -
| https://www.pwc.co.uk/press-room/press-releases/research-
| com...
|
| Plus, the FTSE 100 returned 25.8% last year. That is not a
| shrinking market!
| monkeydust wrote:
| London and UK for that matter is great and seeding
| Startups...high quality universities, entrepreneurialism and
| attractive tax benefits for angels but for real growth capital
| it lags massively behind US and has forever.
|
| The Kraken story is one to follow to see if this
| changes...https://www.british-business-bank.co.uk/news-and-
| events/news...
| alephnerd wrote:
| This.
|
| Also UK contract law is well established and it's easy to find
| experienced transatlantic lawyers and firms (there's a reason
| UK lawyers can practice in NY and why both Hong Kong and the
| Emirate of Dubai kept poaching judges with contract dispute
| into their business judiciary).
|
| In most cases when we'd invest in a startup abroad, the founder
| would often structure their startup as a subsidiary of a US,
| UK, Singapore (especially Indian/Chinese startups), or Cayman
| Islands (it's a BOT so you basically get it for free)
| corporation.
|
| Ironically, this ease of financial access is what makes it
| difficult to seed a lasting DeepTech startup in the UK because
| capital would often be deployed to invest in other startup
| ecosystems. I wrote about this before on HN as well [0][1][2]
|
| [0] - https://news.ycombinator.com/item?id=42768018
|
| [1] - https://news.ycombinator.com/item?id=42767986
|
| [2] - https://news.ycombinator.com/item?id=42763734
| siquick wrote:
| In football we'd call the US "tap-in merchants".
| dukeyukey wrote:
| I don't know Aakash Gupta so I can't say if he's lying or just
| didn't do his research, but I know the IPO figures he cited
| there are wrong, like very wrong, which puts everything else
| there in doubt.
|
| Not to mention location of IPO not being all that important.
| But that's a whole separate thing.
| edogrider wrote:
| This checks out. I live in Silicon Valley but now work for a
| startup in London. Same vibe, less attitude.
|
| They are not the same. The energy/resources in SF/SV are 5x at a
| minimum - but London has it going on.
| HPMOR wrote:
| Yeah SF is 10x every other place in earth. People that think
| things are comparable have never lived here.
| bbarn wrote:
| Working for London startups in the past, I've found they're
| much more polite, but much less honest and straightforward.
| There's a layer of britishness you have to get past sometimes
| to get to what people really want instead of directness.
| Quarrelsome wrote:
| best reasoning I've heard for this is that English is subtext
| heavy, like Japanese due to the history of the aristocracy.
| The populace were in thrall to their feudal lords and the
| aristocracy as serfs and servant classes for so long, that
| being indirect has been embedded into the language as a
| defense mechanism to not upset the pay masters. We get the
| subtext but people new to our culture might not.
|
| I remember a technological mess being present at work and my
| team lead bringing out the classic:
|
| > it's not ideal is it?
|
| or the classic Jeeves and Wooster valet/aristocrat
| relationship with Jeeves giving it the:
|
| > as you say sir
|
| > very good sir
|
| with both statements being flexible but often being delivered
| with the dripping subtext of "yeah that's complete
| bollocks".[0]
|
| Obviously this doesn't apply to the real working classes but
| then those types are not the sort to gain a STEM education.
|
| [0] https://www.youtube.com/watch?v=s03Fq1nsbng
|
| (The full scene is around 11:30 in the first episode and I
| think its captures a conversation of subtext and indirectness
| quite well).
| Oras wrote:
| > yeah that's complete bollocks
|
| We say "interesting" for that
| rconti wrote:
| How's the comp? From HN I had gotten the feeling that the UK
| was worse than most of western europe in that regard.
| dukeyukey wrote:
| According to levels.fyi London is basically the best paying
| non-US city, I think maybe beaten by some Swiss cities.
| sp1982 wrote:
| Yup, London has consistently showing up in geographic hotspots in
| my job postings data. I think it could be also be due to success
| of companies like DeepMind.
|
| https://jobswithgpt.com/blog/global_software-engineering_job...
| philipwhiuk wrote:
| Another British company swallowed by the US :(
| brokencode wrote:
| At least Elon Musk didn't end up getting it, which he tried
| before Google swooped in.
| walthamstow wrote:
| A London company, still in London today and expanding.
| throwaway7783 wrote:
| Funny how San Francisco can't fit the chart they have. League of
| its own I guess.
| alephnerd wrote:
| It truly is. I've seen multiple pre-seed startups and founders
| burn significant amounts of personal capital in order to land
| an O-1A visa because of how much capital and mentorship is
| available here.
| lifestyleguru wrote:
| I wonder who are these people willing to work in London and
| transfer 60% of their net income directly to landlord. Maybe
| money doesn't matter because most of the time they spend in work
| and commuting?
| ojhughes wrote:
| Isn't it the same deal in every major tech hub?
| lifestyleguru wrote:
| In other European "tech hubs" you're not going to find a job
| or will not be able to rent anything.
| LunaSea wrote:
| Or you can come to SF and live in your car or at the gym.
| retinaros wrote:
| London is #1 at that. You earn a bit more than rest of europe
| but everything is way more expensive
| dangus wrote:
| The math works out for almost every HCOL area. Your salary is
| higher. Rent is high too but people either choose to live
| further away or accept a smaller apartment/condo.
|
| London has a big commuting radius with strong regional transit
| (as maligned as it is).
| lifestyleguru wrote:
| There goes another 15% of your net income on train tickets.
| Eating out every time (because have no time for proper value
| shopping) and you are basically working in exchange of food,
| housing, and commute.
| blibble wrote:
| it wasn't even close to 15% of my net income when I was 25
|
| and it certainly isn't now that I'm quite a bit older, and
| I earn a multiple of what I did then
| conradludgate wrote:
| As long as you live within Greater London and can use TFL,
| it's more like 5%
| dangus wrote:
| Using hyperbolic percentages harms your point, it doesn't
| help it.
|
| But yeah you're right dude, _we live in a society_. We work
| to support ourselves. What a shocking surprise.
| blibble wrote:
| > London has a big commuting radius with strong regional
| transit (as maligned as it is).
|
| yes, you can quite easily live 50 miles out and be at your
| desk in under an hour
| kjellsbells wrote:
| Is this really surprising? London picks up all the advantages of
| the UK (legal system is sound, eg in contract law, native
| speakers of English, the lingua franca of business, strong
| university tradition) and adds in its special sauce: access to
| the City, global-tier culture, excellent public transport (I know
| we moan about it, but it really is excellent), and a timezone
| location that easily serves the US and Asia markets.
|
| The awkwardness for founders in London is that when they want to
| IPO, London doesnt have nearly as deep a pool of capital as the
| US, so they are potentially leaving a lot of money on the table.
| hadlock wrote:
| Startups might thrive there, but business investment in England
| (particularly in mature businesses) has not exactly been lively
| ever since Brexit. I can't recall the last time I heard someone
| talking favorably about investing in England, or at all,
| really.
| funkyfiddler369 wrote:
| right, people will just tell you the best places and things
| to invest in ...
|
| during a game of chess: "hey why'd you make that move?"
| graemep wrote:
| Is deep enough pool of capital for the vast majority of
| businesses.
|
| Its cultural diversity is a plus for most people (other than
| people like DHH).
|
| The big problem with London is that it is very, very expensive.
| walthamstow wrote:
| I am completely biased but I think London is one of the best
| places to live in the world, everything considered.
|
| There's a guy on Instagram who spins a wheel for a random country
| and goes to eat that cuisine somewhere in London. There are maybe
| 1 or 2 places in the world you can do that. It's an incredible
| feat of human diversity to pack hundreds of global cuisines into
| a 10 mile radius.
| lifestyleguru wrote:
| There is only so much of food one can eat and after all
| potatoes and steak do the job as well.
| contingencies wrote:
| I did most of the alphabet in Bangkok once, beginning with
| Afghan. I'd wager it's better food than London on average,
| purely based on freshness and tropical inputs. I think if you
| were to pick the best city on earth for food it would have to
| have resident international populations, a tropical climate,
| and at least enclaves of wealth with a relatively free visa
| policy. Bangkok fits the bill. For variety I much prefer it to
| Singapore, KL, HK, Jakarta, Taipei, etc. Best for drinks has to
| be HCMC. Paris and New York are up there too, but you have to
| be 0.1% to enjoy them exhaustively.
| tremarley wrote:
| London seems equally incredible & terrible.
| colesantiago wrote:
| While startup capital flows in, the growth story is very
| different, and for those living in the UK, it isn't what it
| seems.
|
| There aren't any jobs in the UK and most are offshored to other
| low CoL countries.
|
| Young people, founders are leaving for other places like Dubai,
| Singapore and even SF for higher paying jobs.
| dukeyukey wrote:
| This doesn't seem true, I work in a UK tech company and it's an
| incredibly international team. My team has three Brits
| (including me), a Norwegian, a Swede, a Pole, and an American.
| The CEO is Irish, the CTO is German/American.
|
| Obviously that's just one data point, but every tech company is
| similar.
| retinaros wrote:
| London is tax hell. When tou start to have a family it quickly
| escalates to the mosr expensive place on earth by far
| jacquesm wrote:
| That's got to be why one UK VC after another is closing their
| doors.
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