Raconteur

Accelerating Tech Startups 2019

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R A C O N T E U R . N E T 15 Once your startup is experiencing significant growth, you might decide to open offices in other locations. Insurtech startup Kasko is headquar- tered in London and has expanded to Germany, Singapore and Latvia since it was founded in 2015. According to co-founder and chief technology officer Matt Wardle, choos- ing Latvia was a no-brainer. He had previously managed development teams there for Accenture and was aware "it's a highly educated country with hard-working people, so there's a Lower wages, leaner operations rich talent pool of hungry candidates". A key factor that makes Latvian capital Riga one of the up-and-com- ing startup hubs is the cheaper wages compared with other countries, including the UK. "Latvian salaries are actually around 70 to 80 per cent of the UK's. And peo- ple here prefer full-time jobs over con- tract work, which has allowed us to grow a sustainable team of happy, loyal colleagues," says Mr Wardle. "We get to pay above the average wage while making savings elsewhere. A thirty-two-person office with all the trimmings in Riga costs the same as an office for eight in London." Opening overseas offices close to your headquarter's time zone, like Kasko has done in Riga, makes oper- ations easier, but building a remote culture can bring its own challenges. It's for this reason that you should base yourself in a city with good transport links, road, rail and air. "Several times a year we get every- one from all our sites together to work, relax and grow. Those cheap flights become another Riga bless- ing," says Kasko's Mr Wardle. The startup hubs with good trans- port infrastructure are likely to have Good transport links a more mobile and agile ecosystem. It helps a city to be more accessible, attract talent from outside and cre- ate links with other startup hubs. This, in turn, can foster the type of entrepreneurial community that drives future innovation and makes a city appealing to investors. Paris, for example, has the third-best public transport system in the world, according to Arcadis' Sustainable Cities Mobility Index, behind Hong Kong and Zurich. Two years ago, a dis- used Paris rail depot was turned into a startup incubator, Station F, backed by French tech billionaire Xavier Niel, who funded it with €250 million. A recent study by EY revealed Paris has overtaken Berlin for startup investment. Over the first half of 2018, investments in the French cap- ital totalled €2.2 billion, compared with €2 billion in the German capital; half-year figures for 2017 were €1.4 billion and €1.6 billion respectively. Paris's ambition to establish itself as one of the leading startup hubs in the world is being supported by the French government. In September, President Emmanuel Macron announced €5 billion of funding, pledged by private sector investors, will be poured into tech companies Championing startup success looking for late-stage investments over the next three years. "The French have been very suc- cessful at promoting Paris globally. Macron has championed our tech sec- tor, inviting global leaders to France Digitale Day [a leading tech event in Europe] and speaking at the launch of Station F," says Romain Paillard, co-founder and chief operating officer of coding bootcamp Le Wagon. "All this has helped to build buzz and pull talent towards France's tech scene, both French nationals return- ing from Silicon Valley and those attracted to the innovation the city promises. Paris is gaining confidence. It's learning from Silicon Valley with- out slavishly copying it." UNICORN HUB S Countries with the highest number of startup companies valued at $1 billion or more; data correct as of November 2019 United States China UK India Germany South Korea Israel Brazil France Other 205 100 18 21 11 9 6 5 5 34 CB Insights 2019

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