Silicon Valley investor Plug and Play on scaling UK tech
Silicon Valley-headquartered investor and innovation platform Plug and Play has locations across the world, from the US to China. But until earlier this year, it did not have a presence in the UK.
“If you are a UK startup and you need to scale, you can land in Plug and Play’s head office in Silicon Valley, where we work with 300 odd corporations,” Kieran Borrett, head of Plug and Play’s UK division told UKTN.
Having launched in the UK in April, it now plans to back up to 30 UK early-stage startups each year. But how does the early-stage investor view UK tech compared to the global technology scene?
UK tech: challenges and opportunities
The UK tech industry is now valued at $1tn, a landmark milestone that has previously only been reached by the US and China. While the UK’s tech scene has experienced significant growth over the past decade, it still trails behind the US, home to tech behemoths like Microsoft, Google and Amazon.
When asked how the UK competes on the world tech stage, Borrett said: “I think the UK probably tracks the States closer than Europe does in terms of the types of technologies, in terms of the deal sizes and valuations.”
An area that Borrett thinks the UK is leading in, however, is deep tech. He says the UK has an “incredible amount” of early-stage intellectual property but those companies are not scaling as well as those in the US.
A key distinction between UK and US tech, in Borrett’s view, is in healthcare. The sector is tougher for startups to break into due to the National Health Service, compared to the privatised model in the US, Borrett says.
Borrett points to the UK’s data protection rules as a benefit for startups who prefer the additional focus on data privacy. However, there has been a delay to the UK’s Data Reform Bill, the proposed legislation to replace data rules established under the EU, creating uncertainty for businesses.
Scaling UK tech
Following its UK arrival, Plug and Play has launched its Midlands mobility programme with The University of Warwick, The Advanced Propulsion Centre, and Zenzic.
Partnering with UK brands is a key part of Plug and Play’s UK expansion strategy, with the investor also working with BT and Jaguar Land Rover.
Plug and Play’s notable investments include Dropbox, LendingClub, Honey, Paypal and N26. Its UK backings include Circulor and Greyparrot.
Aside from investing, Plug and Play helps startups to scale and supports corporations such as Jaguar Land Rover in accessing new talent.
“Its all to do with let’s get corporates testing technology from startups and scaleups,” says Borrett. “Let’s get startups a great entrance into the ultimate buyers of technology, which is ultimately what they need to scale and be profitable.”
While Borrett has praise for the quanitity of early-stage funds and angel networks in the UK, he believes that the funding gap for later-stage funding needs to be plugged for UK tech to scale as well as the US.
“It’s probably a mindset thing as well,” he says.
Plug and Play in the UK
Plug and Play will initially be based in London but in the future plans to have further locations in Scotland, Ireland and different regions around the UK.
As a “proud Yorkshireman” Borrett is hoping for a space in the region.
“The goal was always for me to use Munich as a launchpad into the UK,” explained Borrett. The UK had been on the investor’s expansion list for a few years but was delayed due to Covid-19.
Borrett started out in Plug and Play’s head office before flying to its Munich, Germany office which specialises in insurance, healthcare and retail.
Starting in 2006, the investor now has a presence in more than 40 locations including the US, China, France, Germany, South Africa, Singapore, Indonesia, and Brazil.
“We pretty much co-invest with every major venture capital on Sand Hill road, so we can give [startups] those introductions.”
Plug and Play is showing no sign of slowing down. It has now set its sights on opening a couple of offices in the Nordics.