$185 million in innovation funds opened in London to stop UK ' brain drain' to the US

... Credit : @pixabay
Shadrach   in Technology & IT

Last updated: 24 January 2020, 06:51 GMT

Blossom Capital, a London-based investment firm, has launched a new $185 million (£ 142 million) fund in a move that would help stop European companies from coming to the US.

Blossom, which has sponsored businesses like payment service Checkout.com, said the new cash would allow it to "tap into the unrivaled potential of Europe" in areas including fintech.

Historically, it said that European entrepreneurs were forced to move to the US to develop their companies, given the country's support for start-ups, but the fact that "US funds in the early stages lacked local experience and network to help founders recruit and scale in Europe on the ground."

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Such moves are thought to have compounded the so-called "brain drain" from the UK to the US which has seen some of the best technology and science talent move to America. 

Figures reported by The Telegraph in 2018 revealed about a third of UK's leading machine learning and AI experts who had left UK universities had gone on to take on positions at Silicon Valley-based tech firms. Others had taken up positions at colleges across North America.

However, Blossom founder and partner Ophelia Brown said founders are starting to ask

why would I move to the Valley on earth when I have amazing networks here that I can build and find very talented people across engineering, design and other skill sets.

Blossom said its new early-stage $185 m fund would encourage more European-founded start-ups to set up their businesses here, and said it could then link them further down the line with US growth investors.

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Duffel–one of the early-stage investments by Blossom–obtained investment from US business Benchmark, for example, last year. The startup is designing travel booking applications and was part of the start-up accelerator Y Combinator Silicon Valley.

In the past, Ms Brown said after the Y Combinator program, businesses would have remained in the US but "now they're coming back."

Over recent years investment over UK tech has been on the rise, with figures released last week revealing that in 2019 more than £ 10bn was funneled into British startups, a record amount.

The UK ranks third in the world for innovation, well ahead of any other European country, according to the study published by government-backed Tech Nation and Dealroom.