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Internet entrepreneurs of Old Street are helping to fuel capital’s recovery
Mark Prigg, Science and Technology Editor27 May 2009
It is a noisy, grimy roundabout, surrounded by grey concrete and crumbling tower blocks. Yet the interchange at Old Street, in what was once one of London's most deprived areas, is where experts say the green shoots of recovery are already beginning to blossom.
The neighbourhoods of Shoreditch, Hoxton and Clerkenwell are home to an ever-expanding group of internet start-ups and a community of pioneers spearheading London's emergence at the head of the second dotcom revolution.
Martha Lane-Fox, figurehead of the first dotcom boom when she and Brent Hoberman founded Lastminute.com in 1999, said: “Although we are in dire economic times, the web space is growing. Things are starting to speed up in terms of investors and new companies appearing.
“It's a very exciting time for online companies starting out, and London is a real hub, particularly Shoreditch. There is a real community feeling and people are coming up with some very innovative ways to use both online and traditional retail — pop-up shops, for instance, where online-only firms can have a high-street presence for a low cost.”
She added: “I have to admit that now I'm 36, I do feel a little out of touch with the current dotcom entrepreneurs.”
Click on the image below to see a larger version of the East End start-ups
Andrew Small, investment manager at the National Endowment for Science, Technology and the Arts, which is putting £50 million into companies, said: “We are seeing a lot of firms trying to fundraise in the digital sector now, but crucially we are seeing a handful of start-ups getting funded.
“I think from an investor's point of view it makes sense, because the investment is relatively small, and £100,000 could fund a firm for quite a long time.”
Online shopping has also contributed to the boom. Recent figures from online retailers show sales are up 14 per cent on April last year.
“There are such huge numbers of people online now there is a large market,” said Mr Small. Even restaurants and shops in the area are getting involved — one of the nearest bakeries to the roundabout, the Albion, uses Twitter to tell customers when it bakes fresh bread.
Mike Butcher of TechCrunch, an expert in London start-ups, said the credit crunch may have actually boosted Old Street's attractiveness. Rents are very cheap as so many firms are closing. This meant small start-ups, who only require a single desk in some cases, can move in. Lots are now sharing offices and there's an amazing community spirit. Some very exciting firms are starting.”
Funding for new companies is also being provided by the Seedcamp project, a group which supports young entrepreneurs. Its chairman, Alex Hoye, said: “There is a real buzz around the area and investors are definitely becoming a lot more active. The atmosphere is very good, and I think we are at the start of a real resurgence for online firms.
“People are increasingly turning online to try to save money, and London's web start-ups are taking advantage of that.”
Reader views (2)
At Seedcamp, we also see the companies benefit a great deal from being around each other and sharing ideas. It's a real boost to see other startups just like you and share advice and even problems
- Reshma, London, 28/05/2009 10:53
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This dotcom resurgence is also providing opportunities for people to work remotely. I've been running a business from home for the past couple of years, as a translator and editor. I've also recently been able to branch out as an IT consultant, by taking on work from a company I used to travel into London to work for. It was mothballed in 2004, and is now run entirely online, with the work I used to carry out in 2004 outsourced to me. Not only do I no longer have the expense and hassle of commuting, I also get to draw on the full range of my skillset by simultaneously working for a variety companies from different industries.
- Richard, Madrid, Spain, 27/05/2009 22:46
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