While just 14% of UK residents are foreign-born, 49% of the UK’s fastest-growing startups have at least one foreign-born co-founder.
A new analysis of Britain’s 100 fastest growing companies highlights the massive contribution of immigrant entrepreneurs to the UK. It reveals:
49% of the UK’s fastest-growing startups have at least one immigrant co-founder.
9 of the UK’s 14 startup unicorns have at least one foreign-born co-founder.
The fast-growing immigrant founded companies of the Top 100 have attracted a combined £3.7bn in investment.
It could be argued that immigrants are natural entrepreneurs. The very act of migrating shows both grit and a willingness to take risks. As outsiders, immigrants are less liable to fall prey to status quo bias and better able to spot opportunities for doing things differently.
In the UK, immigrants are more likely to be own and run businesses.
However, not all startups have the same impact. High-growth venture-backed businesses have an outsized impact on employment, productivity, and exports. In recent years, policymakers have shifted focus from startups to scale-ups. The 2018 Scaleup Review highlights the opportunity: “A one per cent boost to the UK scaleup population would create an additional 238,000 jobs and £38bn in Gross Value Added (GVA), and over time generate an additional £225bn in (net) GVA.”
Evidence from the US suggests that not only are immigrants more likely to start companies, they’re more likely to start companies that have high-growth potential. In Silicon Valley, over half of all engineering and technology companies have at least one immigrant founder; including Google, Facebook, and Tesla to name just a few.
Immigrants are overrepresented among the most successful companies in America. A project started by the non-partisan policy organisation New American Economy and continued by the Center for American Entrepreneurship, looked at the national origin of the founders of Fortune 500 companies. It found that 43% of companies in the 2017 Fortune 500 were founded or co-founded by an immigrant or the child of an immigrant.
The Immigrant Founders of the Top 100
To test whether immigrants were overrepresented among the fastest growing companies in the UK, we analysed SyndicateRoom’s Top 100 list, which uses Beauhurst data to identify the 100 startups, scale-ups and fast-growing companies who have seen the largest increase in value over the last three years. The Top 100 includes 7 startup unicorns (valuations of $1bn or more) and includes household names such as Monzo, Deliveroo, and Leon.
49% of the UK’s fastest- growing startups have at least one immigrant co-founder.
Half of the UK’s fastest growing startups have at least one immigrant co-founder. The fast-growing immigrant co-founded startups include app-based delivery service Deliveroo, co-founded by Will Shu (US), video game technology company Improbable, co-founded by Herman Nerula (India), and small business lender iwoca, co-founded by Chris Rieche (Germany).
From AI and Cybersecurity to Fintech and Food & Drink, immigrants have founded or co-founded 48 of the companies in the Top 100 list. The immigrant co-founders listed come from a wide range of backgrounds. Some came to the UK to study, others to work, and some even fled conflict.
The immigrant co-founders of the UK’s fastest growing businesses come from 29 different countries.
The immigrant co-founders of the UK’s fastest growing startups are a diverse group, hailing from 29 different countries and five different continents. The US was the most common place of birth, with 8 co-founders in the Top 100, followed by France (5), India (4), Russia (4), Germany (4), and Australia (4). Other well-represented countries include Ireland (3) and Sweden (3).
While 38% of the UK’s foreign-born population was born in an EU country, 42% of the immigrant co-founders of Britain’s fastest growing companies are EU-born.
EU-born immigrant co-founders are slightly overrepresented on the Top 100 list compared with the rest of the UK’s foreign born population. 38% of the UK’s foreign-born population were born in another EU country, yet EU-born migrants make up 42% of the immigrant co-founders of the UK’s fastest growing businesses.
The figure rises to 47% of immigrant co-founders on the Top 100 list, if you include non-EU countries within the EU’s free movement of workers treaties, such as Norway and Switzerland.
There are 7 unicorns in the UK’s 100 fastest growing companies, 5 have at least 1 foreign- born co-founder.
Within SyndicateRoom’s Top 100, there are seven startup unicorns.26 Of the seven, five have at least one foreign-born co-founder. The immigrant co-founded unicorn startups include: Monzo, Deliveroo, Darktrace, BenevolentAI and Improbable.
More broadly, nine of the UK’s 14 privately-held startup unicorns have at least one immigrant co-founder. Revolut, OakNorth, TransferWise, and Checkout.com are are also immigrant co-founded.
Immigrants were at the heart of two of the UK’s biggest recent success stories. Online fashion retailer Farfetch, which raised $885m from an IPO in 2018 at a $5.8m valuation, was founded in 2008 in London by Portuguese entrepreneur José Neves. While five Danish entrepreneurs founded JustEat. The food delivery business now operates in 13 different countries and floated on the London Stock Exchange in 2014 with a £1.5bn valuation.
The fast-growing startups co-founded by immigrants in the Top 100 have attracted a combined £3.7bn in investment.
Data from Tech Nation’s 2019 report revealed that the UK attracted 5% of global scaleup investment, more than any other EU nation. Only the US, India, and China attracted more investment in scaleups.
The UK excels in fintech in particular, ranking as the number one destination worldwide for investment in fintech. It is hard to imagine the UK keeping its fintech crown without the contribution of immigrant co-founded companies like Monzo, Revolut, TransferWise, OakNorth, iwoca, and Onfido.
Immigrant-founded startups attract substantial investment. The immigrant co-founded startups in the Top 100 alone have raised a combined £3.7bn in investment.
How to retain the UK’s status as a top destination for entrepreneurial talent
Immigrant entrepreneurs play a vital role in driving the UK economy forward. By creating jobs, attracting foreign investment, and disrupting tired, old industries, immigrant founders make an important contribution to life in the UK.
The good news is that Britain is a top destination for entrepreneurial talent. Data from Tech Nation’s 2019 report revealed that the UK employs 5% of all scale-up employees globally, ahead of Japan, France and Indonesia. Research from London and Partners found that London is Europe’s top destination for European tech workers.
But we can’t rest on our laurels. Policymakers should make preserving the UK’s status as a top destination for entrepreneurial talent a key priority. The government should work to streamline the visa process and ensure there are clear paths open for entrepreneurial talent and investors in risk capital to come to the UK.
The government should reform the visa system in the following three ways:
Restore the Tier 1 Post-Study Work Visa and allow international students to work in the UK up to two years after graduation before moving on to another visa.
Reform the Tier 1 Investor Visa by lowering the minimum qualifying investment threshold for investment in UK startups, scale-ups and venture capital funds.
Ensure that the Start Up and Innovator Visas are implemented successfully.
The case for keeping Britain open
The data in this report makes a powerful case for keeping Britain open to international talent. From restoring the Post- Study Work Visa to ensuring the Start Up and Innovator visa are successful, it should motivate policy makers to make the necessary reforms to the visa system to attract entrepreneurial talent to the UK.
The scale-ups on the Top 100 list are exemplary. In the space of a few years, they’ve increased their valuation by between 10 times to over 100 times. The fact that 49% of the great businesses on the list have at least one immigrant co-founder highlights the valuable contribution that immigrants make to the UK. The list features 7 unicorns: that 5 have an immigrant co-founder is a powerful counterpoint to the media narrative that focuses on jobs taken (not created) and benefits received (not taxes paid).
This report presents a clear picture of the massive impact in terms of jobs, growth, and innovation of the UK’s immigrant population. The job is now for politicians to make the positive argument for immigration and fix the visa system to remain open to entrepreneurial talent.
Investment received: £7.59 million
Finnish serial entrepreneur Mats Stigzelius is the co-founder and executive chairman of Takumi, a platform that connects Instagram influencers with brands and agencies.
For the past ten years, he’s been a founding Partner of Rainmaking, which over the last decade has helped to build and scale over 720 startups through startupbootcamp, as well as building 27 of its own startups (with 9 exits to date). As of today, Rainmaking has 15 partners and 250+ team members across 9 offices across the globe.
“Entrepreneurial spirit is the lifeblood of any well- functioning economy as it is these new businesses and innovations that drive tomorrow’s growth and economic activity.”
Investment: £4.29 million
Jobs created: 50+
Virginie Charles-Dear founded craft subscription service toucanBox while on maternity leave with her second child. Originally from France, Virginie came to the UK for an international masters programme, before transitioning to working in banking.
She believes being an immigrant helped her become an entrepreneur.
“It felt ‘easier’ for me to become an entrepreneur as an immigrant because I had already left my comfort zone behind, making the jump to entrepreneurship didn’t feel as daunting. Being an immigrant has made me stronger in the face of uncertainty, which helps dealing with the ups and downs of starting your own business.’
Oxford Space Systems
Investment: £12 million
Jobs created: 40
Juan Reveles and Vincent Fraux are the co- founders of Oxford Space Systems. In the space of 6 years, the company has grown from four co-founders (“in a shed”) to over 40 full-time staff and has attracted £12m in private investment.
“The UK has welcomed me years ago and allowed me to grow as part of the society and I am happy to be returning the favour by contributing to the growth of the UK economy.”
Investment: £5.95 million
Jobs created: 40
Canadian entrepreneur John Lees-Miller has always been interested in science and mathematics. In 2012, he co-founded Overleaf, which he describes as “Google Docs for scientists”. His platform for the online, collaborative writing of scientific papers now has over four million users.
Lees-Miller came to the UK for a 16-month internship at a startup, where he helped build the Heathrow Pod, the world’s first driverless taxi system.
“I recently sponsored a software developer intern at Overleaf. He had a very successful internship, but unlike me, he couldn’t get a visa to stay here and build on that success in the UK.”
Investment received: £72.6 million
Jobs created: 500+
German-born entrepreneur Timo Boldt is the founder and CEO of Gousto, the recipe box company. Sending almost 2 million meals to customers each month, Gousto is scaling fast with consistent year on year growth.
“It’s important the language of future legislation is inviting of the talent we require.”
Investment Received: £21.9 million
Jobs created: 120+ Worldwide
Miguel Martinez is the Spanish-born co-founder and Chief Data Scientist of Signal AI, “a fast-growing UK company that analyses, in real-time, millions of news articles per day in order to improve the quality of business intelligence and decision making across organisations”.
“We are basically training the best people in the world, paying for part of their PhD with taxpayer’s money and then telling them they have to leave the country the moment they finish.”
Investment: £9.11 million
Jobs created: 30
Cydar’s founder Tom Carrell came to the UK from New Zealand to study medicine. He worked in the NHS for over 20 years, becoming a consultant surgeon. In 2014, he set up Cydar with his co-founder Graeme Penney to improve patient outcomes. Cydar augments image-guided surgery using computer vision, AI, and cloud computing.
“Working in the NHS and now Cydar is proof to me that immigration is good for this country.”
Investment: £33.1 million
Joshua Wohle, co-founder of SuperAwesome was born in the Netherlands and spent 10 years in Switzerland, before moving to London nine years ago to study.
It was listed as the number one technology growth company in the UK by the Financial Times and they employ over 70 people in the UK.
“The experience of ‘starting from zero’, realising you can get your own act together and build up a life around you is one that translates very strongly to entrepreneurship. It builds confidence, resilience and resourcefulness which are all key to any entrepreneur.”
Investment: £17 million
Jobs created: 100
Founded by a team of four, three of whom were born outside the UK, Poq is an app commerce company that helps top British brands such as Oasis, Warehouse, Missguided, Neal’s Yard, and Holland and Barrett build native apps.
Norwegian co-founder & CEO, Oyvind Henriksen argues the UK doesn’t have the right visa system for attracting talented entrepreneurs from overseas.
“People who would come here to create something successful are being discouraged to come… before Brexit, I never thought of myself as being an immigrant.”
Investment received: £23.8 million
Jobs created: 100+ globally, 60 (UK)
Christian Nentwich moved to the UK from Austria aged 19 to study Computer Science at University College London. After completing his PhD, he founded multiple companies, one of which became Duco, whose mission is to “make managing data easy”.
“Taking more people through the fast growth experience is super important. There is a shortage of that sort of talent in the UK, and every company that goes on this journey helps the UK get skills that are in short supply.”
Investment Received: £8.77 million
Jobs created: 50+
South Africa-born founder Oliver duToit developed Fourex, which uses image recognition technology to automatically evaluate and exchange cash into pounds, euros, or dollars.
Oliver believes that the UK visa system is extremely difficult to use, however “London was the only place in the globe to be able to launch a product such as Fourex”.