Lord Mayor: The unicorns are galloping away
As capital dries up and unicorns flee, the UK must act now or accept its fate as an incubator economy, writes Lord Mayor of Canada Alastair King
The role of the Lord Mayor is a multifaceted one. On one level, it is my task to serve as cheerleader-in-chief for the United Kingdom’s financial, professional, legal and maritime services – extolling our strengths to the world while supporting the team back home.
We have, after all, a great deal to shout about: a rich and talented workforce that speaks more than 300 languages; a flourishing tech and innovation ecosystem that is consistently ranked as the best in Europe; not to mention excellent universities and a stable, responsible regulatory regime underpinning it all.
Crucially, our openness to global trade and investment is a key part of that success. The new UK Trade Strategy rightly recognises what many of us in the City have long known: the United Kingdom is a services superpower.
The strategy also aligns with many of the City Corporation’s priorities – particularly the push to strengthen regulatory cooperation, especially with our European counterparts. Beyond traditional free trade agreements, there is rightly an ambition to tackle non-tariff barriers and increase flows through enhanced regulatory dialogue, digital trade and practical interoperability in areas such as digital verification and green finance. In fact, the United Kingdom was the largest net exporter of financial services globally in 2023, delivering a £92bn trade surplus – a clear reflection of international demand for the United Kingdom’s expertise.
Where have all the unicorns gone?
Another part of the role is, when necessary, being prepared to tell uncomfortable truths – and importantly, wherever possible, offering solutions to remedy them. Take for example, our fintech sector, which thrives precisely because of those strong attributes just mentioned. Indeed, the United Kingdom is a leading global hub for fintech, with fantastic, homegrown success stories like unicorns Revolut and Monzo. There is, though, no room for complacency.
The steady gallop of unicorns created here in recent years has slowed to a trot – from 36 in 2021 to a mere 6 in 2023. We have the human capital, but innovative firms are struggling to obtain the actual capital they require to scale up and reach their full potential.
It is why, at a time when technology has never been more important, the United Kingdom is in real danger of becoming an incubator economy – a place where start-ups develop transformative products and services before selling out or moving abroad far too early in their development due to a dearth of domestic capital investment. In such instances, other countries cash in on our success.
Pisces could help turn the tide
As part of my mayoral theme, Growth Unleashed, we have launched a suite of initiatives to help combat this downward trajectory. Our Scale-up Showcase series, for example, is linking up some of the most promising British tech companies seeking between £5m and £30m in their next fundraising with hundreds of potential investors. The first of the series in February saw 18 companies pitch directly to major domestic investors – among them, Lloyds Banking Group, Aviva, and many others – with our second event, taking place today, set to be even bigger.
Later this year, we have organised the Scottish Investor Summit to showcase foreign investment opportunities in the United Kingdom, while the Mansion House Accord has the potential to unlock up to £50bn of investment for the United Kingdom’s long-term, stable, high-potential sectors – from clean energy to life sciences and biotech.
All of this seeks to complement other work taking place concurrently. That includes the Private Intermittent Securities and Capital Exchange System (Pisces) that was launched at the London Stock Exchange this morning – an exciting, new type of private stock market that will allow private companies to regularly auction their shares and will give investors more opportunities to buy stakes in growing businesses.
The United Kingdom remains an extremely attractive place to invest and do business. More than that, through our relentless pursuit to do better, I believe more companies over the coming years will be able to not only start here, but importantly, scale here, trade globally from here and succeed here.