[UK] Something interesting is going on. North West Business Insider magazine reports (no online link, it’s in the printed title, alas) that Envestors planning to launch in Manchester to take advantage of “wider pockets of wealth”. It’s a commonly known fact that the North West of the UK has a cluster of millionaire business people who may well be interested in putting small amounts into an organised network like this.
Envestors started in 2004 offering high-net-worth individuals the chance to invest between £20,000 and £2m in early-stage businesses, also plans to expand into Jersey. In other words, it’s not necessarily going where a tech scene is – it’s following the money.
Perhaps the recession is forcing it to look further afield? Envestors is better known in London. It has a model which involves identifying a shortlist of early stage businesses that show traction, then preps them for funding by the individual investors it invites along to a very formal pitch session. However, I hope they don’t charge the startups the absolute earth for this (anyone been through their wringer?). One of the problems with the UK – and wider European – eco-system is that too often startups, which are hardly cash rich, are just seen as opportunities to be milked by so-called service businesses. (FYI TCE never charges startups to pitch at our events).
However, there is of course no suggestion that Envestors stoops this low. It won “Private Investor Network of the Year” at the recent annual Investor Allstars awards afterall.
As for Manchester itself, despite having a very noisy tub-thumper in the form of Northern StartUp 2.0, I don’t see a ton of real startup action there. Yes, they have a booming Social Media Cafe – similar to Tuttle. But as I said long ago, the geeks/startups and the social media crowd are two different things and, in London at least, diverged a year ago.
The UK regions that seem to have most of the activity, apart from London obviously, appear to be the North East and Scotland.
Believe me, I don’t say this lightly. I’ve been privately asking people in the tech scene in Manchester about this for months. They just shrug their shoulders and admit it’s mostly all about digital agencies, film and similar firms. Very few consumer web or mobile startups.
Stop me if I’m wrong, but Manchester comes across as a region for financial services, creative agencies and media (e.g. the BBC has a big center there now) and of course the music industry connections. But real tech startups appear thin on the ground, though I’m happy to be slated for that in the comments – I’d like to be proved wrong. I’m just not sure I am.
Manchester also has the first fibre to the premises (Oxford Road project), so the businesses there have at least 100meg connections going in, it has the MDDA and several world class centres of excellence for tech in local universities. Manchester and the North West has a lot going for it. Unlike the South, where they still think IT all happens. But IT doesn’t actually. IT happens in the Northern cities. But you can prove me wrong if you like.
Yeah, mostly all I get from the MDDA are nicely formatted email newsletters strewn with information about quangos. I think there’s a scene but it’s small. “Digital” industries there are generally services, not “product” as far as I can tell. Of course, there’s lots of pure research.
Envestors do charge people to pitch… and they ask for exclusivity… not ideal at all!
WTF is up with people getting start ups to pay to pitch!??!?
Not if they keep charging entrepreneurs up front for their services – and they are not alone in that across the Angel scene.
There’s a lot going on in Manchester, though it’s not quite on the same scale as last.fm – probably the main successful startup I can think of in the whole UK / London.
The company I work for has produced a business ratings & listings site, a clothing auction on the consumer side and on the more enterprisey side we’re involved in the productisation of a document management and crm system, and currently re-working a deployed waste logistics system in a productisable way.
There’s a lot of similar work going on by a lot of other small outfits.
Software house wise – it’s got one of the fastest growing Mobile/Telecomms consultancies – Mobica ( related to ex-Teleca staff ). There’s a lot of similar activity going on. The leading Series 60 Twitter client is developed a stones throw from our office for instance.
I think with appropriate financing a lot of smaller ideas, may start to bloom – so Envestors may have got the right idea, and I’m sure even more will follow.
Envestors news is interesting indeed. From my own experience I’d say that tech startups are much thinner on the ground in Manchester but also (and I think crucially) those out there seem to be quieter and less vocal than their Southern counterparts.
We are based in Manchester but I wouldn’t say there is a lot going on. Fortunately we have an international airport close to city centre and it is 2 hours to London so we set up here.
We also gained part of our first round through a pitching session run by the NWBA (North West Business Angels)
Same ideas as the Envestors (who one of our non-execs actual uses a lot) but no payment to pitch as your fee is paid for by gvmnt. That does not reflect on the quality of investors. They were all excellent
That said, as one of the NWBA people put it, the problem with no fee was they spent time prepping start-ups that then never turned up . Small fee ensures they are not time wasting. We obviously weren’t and found the whole process excellent. Our investors weren’t even at the pitching session but were found just from the mail out the NWBA did post event
Sorry this wasn’t supposed to sound like an ad for them but worth checking out
You’re probably right on that one. Before our agency became just that, we had aspirations to work on a single product and push that as a web app. While those aspirations are still there, due to the climate (we started a year ago), it was more in our interest to position ourselves as a marketing service rather than application innovator. The reason: You need a lot of cash to get a web app off the ground, and while there is plenty of ambition in Manchester, there doesn’t seem to be the investor support kicking around to get the process moving. There is also a general problem with being able to retain talent in the city: Many promising developers choose to pursue a career in the capital after becoming bored of agency side.
That said, there have been some significant successes to come from the city. LateRooms.com was sold to TUI for £120m a few years ago, and Ensembli have been doing some interesting things with semantic RSS searches. Listings site Skiddle.com are growing a phenomenal rate, and the various meet-up groups are introducing entrepreneurs to developer talent. If the whole process can be lubricated with funding, then it wouldn’t surprise me if the industry sees a signifcant start-up emerge from the North West in the next couple of years.
I’m from Manchester, 16 years old, and running a really unique startup. I run WikiPic, that is already financed by private investors because of the unique technology I have built.
In the most respectful manner, that is just plain stereotypical. I’m younger than most startups and I am able something that is more unique that many startups in the US, only thing is US is about competitivity and one unique idea on a concept already milked out is the goal to a couple of million from a really uneducated investor.
It shows that startups that have made an effort to find investors in London will critize Manchester as much as they wish. Manchester is as “startup”-fancy as Sillicon Valley or London, but that’s not what this is about, it is about finding potential and the right place to find the right minds for a business.
I have been doing this for 7 years (since I was 9 years old), so I know this industry fully well and I am one of the youngest developers around the North West who has ran many successful projects.
There’s no harm – I don’t mind proving to you that potential is there, just that opinions from people that just live in one area of Manchester shouldn’t provide useless information about it when they clearly have no clear understanding of it.
Thankyou,
Bilawal Hameed.
Mike, I think your assessment of the Manchester/NW startup scene is pretty accurate. There are lots of agencies (and some very good ones), but relatively few whatever-the-successor-of-web2.0-is startups. If you know Rails or PHP or Django or one of the typical web languages, you probably work for an agency. There are startups and small firms making products using Java or .NET, but these are often more enterprise-focused or niche products, not mass-market last.fm types.
It remains to be seen if the agencies can give birth to startups as they mature, or if, on the other hand, the presence of large-but-dull agencies sucks up too much of the talent necessary to kick-start a startup culture. I think it’s also possible that there will simply be a different kind of startup culture (e.g. more niche, enterprise-focused) that isn’t trying to be like silicon valley. If London is a pale imitation of the valley, it’d be pretty stupid for Manchester to be a pale imitation of a pale imitation.
“too often startups, which are hardly cash rich, are just seen as opportunities to be milked by so-called service businesses.”
Aint that the truth! Anyone who is asking a cash strapped startup to pay to pitch probably is more interested in making a profit from the event than they are in finding the next great investment, and if that is where their focus is, then its unlikely the startups will find the angel they are looking for.
Dragon’s Den has done a lot to promote entrepreneurial attitudes in the UK, but its format has spawned a million little bottom feeders who are all intent on sucking blood from new companies. It’s not so much a case of swimming with sharks as it is taking a bath with a load of piranha fish.
My advice would be that if someone doesn’t think your business idea is strong enough without an entrance fee, then they probably wont take you too seriously.
Manchester has true potential as a web startup area. There are now many businesses relocating from London (e.g. as mentiontioned the BBC) aware that it is fast becomming a very much up and coming city seconded only to London. As Katie Moffat mentions I think they are quite a few startups but they are less vocal as their southern counterparts. Indeed If a scene was to begin, then there is bags of talent in the digital agencies to tap into and fill the vacancies. As recently commentated from a prolific seed investor Manchester it’s fast catching up and could be a viable alternative to London if you consider its barely 2 hrs on a train, international airport links and the cost savings of being located there are huge for a startup.
There are movements by people like Manoj Ranewwera trying to do their bit with northern startups (although often seen to be for his own motives) and instead of dismissing Manchester I’d be prudent and say watch this space…things could really happen there.
I think part of the problem is in the definition of a ‘real startup’. Mass market consumer facing startups cost lots of money and are high risk. That flavour of money isn’t as available in Manchester as it is/was in London.
Envestors move up here won’t change that (based on our experience on their ‘warm-up’ tour). Northern money is more ‘careful’ and somewhat more risk averse. Which is why you see more niche players with smaller investment needs.
Some of these do very nicely in their market (Westpoint.ltd.uk is a case in point) but they aren’t as much fun to write about as the rollacoaster rides like spinvox.
And by the way, don’t get too smug in the south, why is it that Huddle are spending all that time in California if everything is rosy in London – is it just the weather ?