UK more diverse than other major start-up ecosystems, including the US, Silicon Valley, NYC and Tel Aviv

Women make up almost 1/3 of start-up population, beating US; Over half are under the age of 35, making the UK a global millennial hub; UK is a global entrepreneur magnet with 34% of the start-up population from abroad; 78.9% believe diversity helps their start-up compete

Independent research commissioned by Wayra UK, Telefónica Open Future’s digital start-up accelerator, has revealed findings that reinforce the United Kingdom’s position as one of the world’s most diverse start-up ecosystems, as well as key insights into the significant impact diversity is having on the country’s newest businesses.

startupDNA, which is believed to be the first research project of its kind to analyse inherent and acquired DNA within British start-ups, revealed some intriguing findings in relation to funding, income and attitudes towards diversity but it’s most startling revelations came when comparisons were made to other major start-up ecosystems.

Compared to the United States, those working in UK start-ups were five times more likely to be female; two and a half times more likely to be under the age of 36 and ten times more likely to be from a different ethnicity, other than white and Asian.

London, which the research identified as being the torchbearer for diversity and fundraising in the UK, also seems to be attracting more diverse groups than rival start-up hubs. The research found, for example, that the capital was three times more likely to have women working within its start-up community than both Silicon Valley and Tel Aviv. The capital is also hot on the heels of New York City - identified as the world’s leading hub for female entrepreneurs – with over 24% of women identifying themselves as being in a leadership role.

Key findings:

Of the 34% who come from outside the UK, 20.7% are from the European Union, with 13.3% from elsewhere.

79% of respondents work in digital start-ups.

29% of women in the UK identified themselves as being in a leadership role.

Women are 3.5x more likely to be attracted to a start-up that’s more diverse than men.

Start-ups are 36% more likely to have female leaders than FTSE100 companies.

Commercial success is 298% more likely than social impact to be a company focus. However, women are 32% more likely to note social impact as their main business focus than men.

Over 50% state global reach as being an aim for their business.

59% speak another language with women 45% more likely to speak another language than men.

Those working within British start-ups also believe diversity to be a key driver in their acceleration with over 78.9% declaring that it has helped their business compete; 75% declaring it has helped them overcome challenges and 71.5% agreeing it helped them find new markets.

Simon Fanshawe OBE, of astar-fanshawe, the innovative diversity consultants who’ve guided Wayra from the inception of this project, believes far from being a hindrance, diversity is, in fact, helping the UK create one dominant start-up centre in Europe, similar to Silicon Valley.

“What this research tells us is that start-ups would get far more growth, innovation and entry into new markets if there was a more diverse combination of people involved. For too long, cultural differences and even languages were seen as putting the UK at some kind of disadvantage. But this research clearly demonstrates the impact the UK’s rich social makeup is having on the growth and performance of our fledgling businesses.”

222 early-stage start-ups, of which 89% of respondents held executive-level positions, were surveyed from across the United Kingdom and Northern Ireland, with 42 organisations, including Innovate Finance, Virgin Start Up, Tech City UK and Mass Challenge UK, targeting businesses through their acceleration programme.

Although the research shows the UK ecosystem embracing diversity, disparity remains, especially with funding in relation to an individual’s gender, class and ethnicity. There are also some dramatic biases reflected in participation in different sectors. For instance, no men in the survey reported being involved in the lifestyle sector and no women reported being part of a banking and finance start-up.

“We are fully aware that a start-up in its infancy must focus on growth if it is to survive and may not fully appreciate the benefits of what diversity can bring.”

Gary Stewart, Director of Wayra UK & Wayra UnLtd, believes accelerators have a responsibility to young businesses and to the ecosystem in demonstrating how difference can impact performance.

“I passionately believe that if you actively recruit talent from diverse sources, you’ll not only strengthen your team and bring on additional expertise, you’ll also experience more growth as a result.”

Lawrence Wintermeyer, CEO of UK's FinTech membership association Innovate Finance said:

“This report shows that diversity makes sense. It brings new ideas for services and different solutions to problems in a world of changing markets and customer demands. It is also brings a range of skills, experience and cultural understanding to inform companies. It is a reality that we must all embrace. Inclusion is the solution for a better future for everyone.”

Blue Sky and Finance Birmingham Help Solve Funding Needs for Key Forensic Services

Forensic services company Key Forensic Services Limited (KFS) has secured £1m funding from Finance Birmingham’s £56m Mezzanine Fund.

Coventry based KFS provide a comprehensive range of forensic services to the UK criminal justice system and law enforcement agencies, providing a 24/7 one-stop shop approach for investigators and scientific support staff. 

Corporate finance and accountancy services provider Blue Sky Corporate Finance assisted KFS with sourcing and securing the funding through Finance Birmingham to help fund the final development and launch costs of the transformational RapidHIT device, which is expecting formal UKAS accreditation during June 2015.  A rapid DNA profiling service will be initiated from KFS laboratories during July and sales of the revolutionary equipment have already started, providing opportunities for further job creation.

Finance Birmingham’s £56m Mezzanine Fund, supported by the Government’s Regional Growth Fund, is the largest individual growth capital fund for SMEs in the West Midlands.  Businesses can apply for loans of between £250k and £2m to fund development and growth plans.

Brian Thomas, Financial Director, KFS commented:

“Our staff have extensive experience operating as forensic practitioners/expert witnesses and are regarded as leaders in their chosen fields. The funding we received through Finance Birmingham’s Mezzanine Fund will enable us to continue with our ambitious growth plans and to invest in people. With the employment of additional highly experienced staff we will continue to deliver the high service levels our clients are accustomed to. The advice and support we received from Blue Sky throughout the funding process proved invaluable.” 

Tony Seaton, Associate Director, Blue Sky Corporate Finance added:

“Through our close working relationship with Finance Birmingham we were able to secure the funding KFS required. Providing SMEs with access to funding of this type is vital to the growth of the local economy and we are delighted to have been able to have helped KFS with their future ambitions to grow the business and employ more staff.”

Graham Mold, Investment Director, Finance Birmingham said:

“Access to funding remains a key issue for growing businesses. Without the finance and support of organisations like Finance Birmingham, many cannot take their companies to the next level and realise benefits for the wider economy, including the creation of much needed new jobs.

“Our Mezzanine Fund has helped support more than 11 business since its launch last year and we welcome applications from more companies with growth potential.”

SAVILLS INVESTMENT MANAGEMENT AGREES JOINT VENTURE WITH CHINA MINSHENG INVESTMENT CAPITAL

Savills Investment Management, the international property investment manager, and China Minsheng Investment Capital Co. Ltd (“CMIC”), a subsidiary company of China Minsheng Investment Corp., Ltd (CMI), China’s first national-level private investment company, have today entered into a joint venture agreement to develop and promote a series of funds and investment vehicles to invest in global real estate markets. 

The joint venture is the first of its kind between an international real estate investment manager and a private Chinese investment company.  

The first major initiative resulting from the joint venture is a new real estate fund, CMISIM European Investment Fund (“The Fund”), in which CMIC is the cornerstone investor with seed capital up to £30m. The Fund aims to deliver a net return to investors of 15%.

The majority of the seed capital in the Fund will be invested into Savills Investment Management’s Prime London Residential Development Fund II (“PLRDF II”) and the remaining amount will be used to invest in other UK projects.  Upon successfully raising capital from other investors from China and internationally, the joint venture will expand its investment into other markets in Europe and further afield. Launched in 2014, PLRDF II capitalises on the fundamental shortage of housing stock in London by targeting mid-market residential developments in select locations where the supply / demand imbalance is most acute.  PLRDF II enables investors to share in the development profits by investing alongside proven developers in off-market transactions.  CMIC will invest an additional £20 million as a Limited Partner directly into PLRDF II.  

Justin O’Connor, Chief Executive Officer of Savills Investment Management, comments, “We are delighted to have formed this ground-breaking joint venture with CMIC, and together we look forward to generating many highly attractive real estate investment opportunities in the years to come. CMIC’s decision to partner with SIM underlines the strength of our reputation as a leading international real estate investment manager. Our inaugural fund, CMISIM European Investment Fund, is well-placed to deliver superior risk adjusted returns by offering immediate exposure to PLRDF II and other fund and projects managed by SIM.”   

Terry Liu, Chief Executive Officer of China Minsheng Investment Capital, comments, “Our joint venture partnership with Savills Investment Management represents an important step in establishing a global real estate investment platform.  Given the strategic importance of London and its buoyant real estate market, we are pleased that this will be the initial investment focus of our partnership.  Our strategy is to build a globally diversified portfolio and in SIM we have the ideal partner to make this happen.”