A private sector-led advocacy group made up of around 150 technology business leaders and influencers has launched in London today to facilitate partnerships between tech start-ups and FTSE 250 businesses as well as large international companies and investors.
Known as Tech London Advocates (TLA), the group is founded by former Skype vice president and Telefonica global innovation director Russ Shaw, and is supported by a long list of high-profile advocates including Index Ventures partner and investor Saul Klein, Ariadne Capital founder Julie Meyer, and Wayra Europe MD Simon Devonshire.
TLA believes that there is significant interest from large corporates based in the UK to get further involved in London's burgeoning tech start-up sector. The organisation will attempt to accelerate the necessary business conditions to advance start-up growth, support later stage innovation and enable technology innovation to rapidly reach its marketplace.
This in turn will enhance investment conditions for larger businesses, enabling them to benefit from the culture of innovation embodied by London's tech entrepreneurs, according to TLA.
"The government has done a great job of really promoting Tech City and getting behind it, but the thing that was missing for me was, where is that private sector ecosystem that's going to come together, that's going to give this a really big push, that's got the contacts, that's got the access to capital and talent?" Shaw told Techworld.
"I feel like we're tapping into a nerve here, and it's really going to be down to us to make this happen. I want to be able to look back in in ten years' time and say, this is not Silicon Valley, but this is something really unique and robust."
The focus of TLA in year one is to set an agenda that will accelerate growth of the private sector in London and demonstrate that bringing together the start-up community with larger businesses can deliver real success. Broader economic and societal benefits such as job creation will also be at the centre of the group's agenda.
The news comes amid reports that venture capital investment in UK technology companies is at its highest level in a decade. According to the latest data from corporate finance firm Ascendant, just over £1 billion of venture capital was invested in 2012, which is some 28 percent more than what was invested in 2011.
Last year also saw the number of deals over £500,000 increase by 20 percent from 193 to 232. The internet and wireless sector received the most investment, with some £456 million, which was followed by 'clean tech' (£280 million) and software (£106 million).
However, UK tech IPOs are likely to remain scarce in 2013. In a survey of private equity and venture capitalist professionals by financial adviser Grant Thornton at the end of last year, only 8 percent said that an IPO was the most likely exit for private equity firms who have invested in the technology sector.
The government and the London Stock Exchange is working to change this, with the introduction of a new High Growth Segment that is intended to be a launchpad for fast-growing companies, as well as the abolition of stamp duty on AIM shares and the extension of the Funding for Lending scheme and the Seed Enterprise Investment Scheme (SEIS).
"It is all a bit chicken and egg - yes we need the analysts, yes we need the investors, but what we also need are first movers. We need more companies to say, we are going to build businesses at scale, we're going to float these businesses in the UK," said Marcus Stuttard, head of AIM at the London Stock Exchange.
"Being a public company, the profile and visibility of these businesses grows massively. We've created brilliant platforms - AIM, the new High Growth Segment - but we've had shit economic conditions, and there has been a crisis of confidence, so companies don't want to be the first movers."