Are the wheels coming off for Silicon Roundabout? High tech bosses are divided

When the UK’s competitors regulator blocked Microsoft’s merger with Activision final month, some within the trade weren’t shocked. But what did elevate an eyebrow was the tech big’s heavy-handed response.

“This decision, I have to say, is probably the darkest day in our four decades in Britain,” Microsoft president Brad Smith blasted in an interview with the BBC. “It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.”

But did Microsoft actually communicate for the UK’s tech trade when it issued this invective? Or was this flashpoint with the regulator only a storm in a teacup?

For one factor, the Competition and Markets Authority has at all times been desperate to reject mergers it considers dangerous to shoppers. A cursory evaluation of CMA knowledge exhibits that for many of the previous 20 years, solely round 50-60% of its part 1 competitors selections are granted unconditional clearance.

For one other, final yr the UK’s tech companies — of which the overwhelming majority are based mostly in London — surpassed a mixed $1 trillion in worth for the primary time, making it solely the third nation on the planet to realize this milestone. Clearly we’re doing one thing proper.

But Microsoft isn’t the one agency to warn the tide is popping. Last month, the CEO of fintech big Revolut, which has been ready for 2 years to safe a banking licence, stated he wouldn’t think about an inventory in London as a result of it “is not the business environment to operate in the modern world”, whereas on Wednesday, the founding father of fellow London fintech LendInvest stated he had stop the capital to start out his subsequent enterprise in Los Angeles, citing “the endless distraction of Brexit, Boris and the Liz Truss debacle”.

Mustafa Suleyman co-founded synthetic intelligence enterprise DeepMind in London, which was purchased by Google in 2014 in a deal reportedly value $500 million. The 38-year-old entrepreneur advised the Standard the capital risked shedding its aptitude as a result of its creatives are struggling to get the funds they should survive.

“I think the truth is London’s lost its confidence. It’s not what it was in the 2000s. And it needs to find back its passion for risk-taking, innovation, and invention.

“Being a founder is cooler in Silicon Valley. And it should be the coolest thing to do in London. [But] it’s just become expensive and inaccessible to artists and creatives and entrepreneurs and risk-takers.

“It should be a city of invention because the universities are amazing — we have some of the best in the world. What it needs is a culture of investment and risk-taking that is willing to take risks on those kinds of things and bet on them.”

But Paul Taylor, founding father of $2 billion London-based fintech Thought Machine, stated considerations about entry to funding in London had been overblown.

“London is still the best place for fintech in the world and in Europe,” he advised the Standard. “That [there is less funding] is absolutely true but that is not a UK problem. There was a lot of easy money two years ago, people were throwing it at companies. A bunch of them got very lucky with funding rounds and both they and investors will learn a valuable lesson from that.”

Taylor as a substitute pointed to the behaviour of the UK’s monetary regulators, the PRA and the FCA, as being on the forefront of entrepreneurs’ minds when it got here to considerations over London.

“There’s a deep frustration. When the challenger banks got started, the view was the UK regulators were very encouraging of new entrants to the market and challenger banks, which is why Monzo and Revolut got a very clear path to their initial licences, to such an extent that some of the incumbents felt it was unfair.

“But now it certainly has changed. There’s not this pro-technology company view of the regulators and they have become more bureaucratic and cautious… they’re just too slow and it takes months if not years to get answers to questions.

“People are a bit fed up. It’s not a disaster, it’s not the end of the world, but if would be good if we got a bit more encouragement. Doing what we do isn’t easy.”