If you buy something using links in our stories, we may earn a commission. Learn more.
This article was taken from the September 2012 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
For all the government's Tech City promotion, the Shoreditch scene has yet to produce a breakout hit to compete with Silicon Valley's best. For some entrepreneurs, the blame goes to financial institutions that are more risk-averse than their US counterparts. "As the US continues to churn out high-profile IPOs for Zynga, Groupon, LinkedIn and Facebook, the London IPO machine is eerily silent," says Neil Rimer, cofounder of Index Ventures, one of Europe's largest venture capital firms.
According to analysts Price Waterhouse Coopers, notes Rimer, last year technology companies accounted for 21 per cent of the total proceeds raised by US IPOs. In Europe the equivalent share was one per cent. "These companies exist and are ready to go public," says Rimer. Investors: meet ten London-based firms to watch...
1: AlertMe
149-151 Regent Street, London W1B 4JD
AlertMe is one of the few startups to actively welcome the economic double-dip. The service saves its users money by sourcing and integrating devices that attach to energy meters, heaters and electricity points to measure home energy use. This usage data is processed through the cloud where AlertMe combines it with historical data collected from other households. Clients get information about energy use and suggestions about how to consume less. Home electricity monitoring is the core business, but the platform's modular design is intended to adapt to other energy challenges.
CEO Mary Turner (right), a former CEO of Tiscali, believes the service will chime with environmentally aware consumers. "We chose a route to market through large partners where our service is a natural fit, and where they have the capability to put [our technology] into the hands of millions of customers," she explains. An October 2010 commercial agreement with British Gas is the largest example to date of this sort of collaboration: it included the UK's biggest domestic power producer taking a 16 per cent stake in AlertMe in exchange for £5.7m, valuing the
business at £38m.
In the US, the biggest tie-up to date has been with home appliance retailer Lowe's. With energy prices on both sides of the Altantic seemingly heading inexorably upward, AlertMe looks well placed to reap the benefits.
2: HouseTrip
279 Tottenham Court Road, London W1T 7RJ The trauma of booking their first holiday-let together led now-husband-and-wife founders Arnaud Bertrand and Junjun Chen to set up their lettings site.
Property owners pay a commission when their property is successfully rented; customers get a one-stop shop and a simple payment system. HouseTrip holds back its payment for the first two days for security. It's now the largest site in Europe of its kind.
Bertrand and Chen were hotel-management graduates in their early twenties when they founded the site -- with no prior experience of running an internet company. It took 100 meetings to net the £135,000 seed money in 2009 -- which came from five investors in different European capitals.
They focused on London, Paris and Berlin, using targeted search-engine marketing to bring customer traffic to the site. Last November it received $17m (£11m) of series-B funding led by Balderton Capital; it announced its 500,000th booking in January, two years after its launch.
**3:
PeoplePerHour**
2c Seagrave Road, London SW6 1RR
"Earning a second income or running your own business is becoming more accessible," says Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, an online marketplace that links small firms with freelancers. Companies advertise a project - priced between £10 and £10,000 -- including a fee and timescale; freelancers respond with their bids. Founded in 2003, it has to date listed 143,000 jobs and has registered 300,000 users.
4: Mind Candy
56 Shoreditch High Street, London E1 6PQ
Introducing social networking to the childrens' online game and virtual pet site was what gave Moshi Monsters its big break. "We turned two million users into 11 million in the space of eight months in 2009," says Divinia Knowles, COO and CFO of owner Mind Candy, the Shoreditch company behind the game. The site now has more than 60 million users across 150 countries, and has spawned a magazine and a line of toys and games.
5: Wonga 88 Crawford Street, London W1H 2EJ Wonga's real-time risk-profiling algorithm judges the creditworthiness of its borrowers, who can obtain up to £400 in minutes. Launched in October 2007, it has approved more than four million loans with an average value of £230; the proprietary algorithm makes 1,000 loan decisions every minute. It's a far cry from the near-disaster of its early weeks: approving 90 per cent of loans, the founders realised that about half of borrowers were defaulting.
**6:
Badoo**
Office 10, 22 Little Russell Street, London WC1A 2HS
Badoo's focus is on meeting new people -- for friendship, a fling, or just a walk in the park. The site uses location software to track people nearby and currently claims 150 million members. It launched in Spain and spread through the Mediterranean, then Latin America and the UK, and now the US. "In the UK social rituals are elaborate -- it's hard to just chat to someone," says Badoo chief marketing officer Jessica Powell. "We help break down the barriers."
7: Songkick
12-18 Hoxton Street, London N1 6NG
Online concert database Songkick has been bringing the live-music community together since Ian Hogarth, Michelle You and Pete Smith launched it in October 2007.
The company poached Google veteran and Blurb cofounder Dan Crow for its CTO job at the beginning of last year and then secured $10m (£6.4 million) in March from Sequoia capital, marking the giant Californian VC's first investment into a UK-headquartered firm.
8: Funding Circle
99 Southwark Street, London SE1 0JF Its first loan was to a Gloucestershire environmental consultancy in August 2010, and Funding Circle is still lending in the UK. Lenders bid an amount and interest rate in an auction before the money, and the risk, is then spread across multiple businesses. The company, which is backed by Index Ventures, Union Square Ventures and a number of angels, has helped more than 700 businesses borrow £30 million to date.
9: Skimlinks
100 City Road, London EC1Y 2BP
Skimlinks embeds affiliate links into online content: if a user clicks through the link to purchase a product, the original content provider earns a commission -- and Skimlinks gets 25 per cent. Cofounders Alicia Navarro and Joe Stepniewski will not disclose if the site is profitable, but after more than £7m in funding, investors including The Accelerator Group clearly believe the open-marketing site is a good bet.
10: Moo
32-38 Scrutton Street, London EC2A 4RQ
Eight years after launching, Moo prints millions of business cards a month for hundreds of thousands of customers across 180 countries, and has recently added postcards and minicards. Although it wants to disrupt the £65bn global print industry, there's nothing revolutionary about Moo's core value of good design, insists founder Richard Morross -- who warns that the web can reduce the quality as well as the cost of printing.
This article was originally published by WIRED UK
