Brent Hoberman is on a national mission of strategic importance. One of the UK’s most successful serial tech entrepreneurs, Mr. Hoberman, who sits on the UK Government’s Digital Advisory Board, is criss-crossing the world’s tech hubs carrying an urgent message for promising startup founders everywhere: don’t be put off by Brexit.
Yes, the UK’s departure from the European Union, in whatever form it ultimately takes, looks like a slow-motion train wreck. And yes, the future is unclear. But the UK remains a crucial market for early-stage technology startups, and that is not going to change after Brexit, Hoberman says.
This week, the corporate-backed startup accelerator Hoberman co-founded with serial entrepreneur and former lastminute.com colleague Henry Lane Fox, is launching a roadshow in Tel Aviv. I caught up with Brent Hoberman over email.
Amir Mizroch: You’re optimistic about the UK’s tech future?
Brent Hoberman: Of course we cannot ignore the current political climate, but founders should not be put off by Brexit. There are three main areas where the UK has a competitive edge over other big markets: a large corporate presence, a strong local talent pool, and favorable visas for entrepreneurs. The UK’s corporates –names like easyJet, Aviva, Guardian Media Group, Marks & Spencer – all of whom back Founders Factory- and many others–are eager to engage in open innovation with startups, to invest strategically, and to implement innovative technologies. These are optimal conditions for tech startups to scale.
Amir Mizroch: Your accelerator, Founders Factory, is holding a roadshow in Tel Aviv on 27 & 28th March. This is your second roadshow in Israel. What can you say about your Israel connection so far?
Brent Hoberman: We greatly respect how Israel – via government initiatives and vast investments in R&D – has created an environment that enables entrepreneurs to thrive, with Tel Aviv now home to the highest number of startups per capita in the world. To date Founders Factory has invested in five startups with Israeli founding teams Reps.ai, WeSki , Kovrr, Yes Chef, Serelay and Fountain – discovering three of these companies via our Tel Aviv roadshow last year. As the UK heads into the Brexit unknown, we want to make sure that the best Israeli startups get the message that Founders Factory can help them scale into the UK and Europe and that there’s great potential for Israeli tech in the UK. It’s also important to stress that there is no requirement for Israeli startups to relocate to London when accepted into our accelerator. Our bespoke support program means companies get the help they need, without the inconvenience of uprooting their lives to move to London.
Amir Mizroch: Corporations say they want to innovate. Some of them even appoint innovation officers. Still, startups struggle to convince corporates to carry out pilot projects, let alone implement paid, external innovation. Is the UK any different?
Brent Hoberman: This is true to a large extent, but some corporates are starting to see the value in open innovation. CBInsights revealed that Q4’18 saw 429 active corporate VCs globally compared to 270 in the previous quarter. Despite uncertainty in other areas, the UK government is making a strong statement in its desire to house the best tech talent.
Amir Mizroch: Will Brexit actually make British corporations more open-minded to external innovation, out of necessity?
Brent Hoberman: Where the UK comes up trumps is its density of world-leading corporates – we are second only to Japan as the home of corporate HQs. What’s more, UK schemes like EISs, VCTs and SEISs have made investment in tech assets more popular with corporates. I sit on the UK Government’s Digital Advisory Board as well as having been a board member of The Economist, telecoms provider TalkTalk and The Guardian newspaper. My time on the board of large corporates was instructive in understanding how challenging it is for these kinds of companies now, both during the Brexit uncertainty, as well as with the pace of innovation in general. But there is now a growing track record of successful corporate innovation in the UK, with many sides contributing: government, the corporates themselves, and outfits like Founders Factory and others that facilitate corporate innovation and startup growth as complementary activities.
Amir Mizroch: What’s your model to help startups scale?
Brent Hoberman: We invest in 35 startups per year from all over the world – 70% are currently from overseas – and in just over two years our startups have gone on to raise over £120m in further capital. We help startups find product/market fit in the shortest amount of time possible, solve strategic and operational challenges and find scale with multinational corporations. Founders Factory has built an operating team of 70 specialists in London and South Africa who provide hands-on support.
Amir Mizroch: Do you have any examples of startups you’ve accelerated scaling with large corporations?
Brent Hoberman: We built Founders Factory to implement the quickest routes to scale, which is through the backing of large corporations. In just over two years our portfolio have completed 160 pilots with our corporate partners – with over a third converting to enterprise contracts. For instance, Reps.ai an Israeli startup that provides an AI powered customer service tool just recently graduated from our accelerator program with a substantial enterprise contract with easyJet, our travel partner.
Amir Mizroch: What do you think Israeli startups can bring to the UK market?
Brent Hoberman: We admire the skill, tenacity and sheer ‘chutzpah’ of Israeli founders. Israelis excel at deep tech like artificial intelligence, cyber, and big data. The UK government recently committed £200 million artificial intelligence program to fund AI Masters, PhDs and research fellowships. So we think Israeli founders, specifically in areas like fintech and insurance, cyber, retail and AI, will have a good path to scale in the UK.
U.K.’s Message To Israeli Startups: Don’t Be Put Off By Brexit – Forbes