Number of tech start-ups double since Brexit vote

An analysis of Companies House data by audit, tax and consulting firm RSM has found that the number of tech company incorporations in the UK has more than doubled since the Brexit referendum.

In the eight month period prior to the referendum in June 2016, 2,325 software publishing, computer programming, and business and domestic software companies were incorporated. However, in the eight month period following the referendum, this jumped to 5,995.

The rise in tech company start-ups was particularly marked in London where an additional 1741 companies were incorporated in the eight month period to the end of February 2017, a rise of 184 per cent.

Other regions which recorded significant increases included the South East with an additional 412 companies, the North West with 260 and the East of England with 248.

Richard Heap, a technology partner at RSM said:

‘There were fears that the Brexit vote would dampen activity in the tech sector and businesses would be attracted overseas. In reality, they are staying and multiplying. Clearly the entrepreneurial spirit in the sector is alive and well.

‘We saw a dip in tech company incorporations in the lead up to the referendum, no doubt due to uncertainty surrounding the outcome. However, angel investors, venture capitalists and private equity firms continue to support and invest in the UK tech scene, with overseas investors particularly attracted by the current weakness in sterling. The availability of tax breaks such as the Seed Enterprise Investment Scheme and the Enterprise Investment Scheme is also helping to encourage investment activity.

‘London continues to be the hotbed of tech activity, accounting for almost half of all new tech company incorporations over the last eight months, but we are also seeing strong activity outside the capital, particularly in Manchester and across the home counties.

‘The downside of this surge in activity is that the war for top talent is fiercer than ever. As the proportion of EU workers in the tech sector is far higher than the average – up to a third in London alone – many businesses will want an early resolution to the issue of the status of EU workers in addition to clarity over their ability to recruit overseas talent post-Brexit.’