San Francisco is undeniably one of, if not the leading, tech capitals of the world, but the rather rapid transformation of the city, in particular across the last few years, has meant it has arguably lost some of its shine.
Spending a third of my time there between 2014 and 2018, I watched as the city reinvented itself and made itself home to increasing numbers of scaleup tech businesses from the Valley - as well as the usual household names - as tech giants, engineers and developers relocated to the city.
But if you were to visit now, as I recently did, you might be surprised to see how much it now struggles to deal with social problems such as increased homelessness. Residents in the city often complained that tech workers were changing the city for the worse, driving up rents, increasing homelessness and eliminating fairness and equality. Those very tech workers are now starting to agree.
Despite the above, transactional activity in the Valley is as strong as ever. Cash is being deployed and businesses continue to scale very quickly. Two key takeaways for UK tech businesses to note from a Silicon Valley viewpoint:
- The venture capital community in Silicon Valley is very strong and active, and the usual suspects are still looking to spread their portfolio and are keen to invest in scaling UK tech businesses. There’s a healthy appetite to continue to invest into UK tech – with strong rumours that one or two US VCs are considering opening an office in London.
- Whilst certain sub sectors / industries continue to flourish such as consumer products, internet, software and mobile and telecoms, life sciences and biotech are very active at the moment, with more specialist funds being established. Silicon Valley is watching with interest to see what happens within the UK particularly in three key areas: the biotechnology space, plant-based meat alternative proteins - a recent report predicted most of the meat we eat will not come from animals by 2040 - and spin outs from UK universities, the companies developed from university research that often require large amounts of investment to thrive.
Last year saw record venture capital investment into UK tech companies, though at just 11% of total investment into US businesses, there’s still a long way to go. However, many UK companies are well advanced with their plans to expand and scale into the US and attract funding also.