Should Silicon Roundabout be scared?
“Level 39’s not a copy paste of Silicon Roundabout,” Eric Van der Kleij, head of Canary Wharf’s newest fin-tech accelerator tells me as we walk around the premises on the 39th floor of One Canada Square. “When companies have put down the ping-pong bats and want to accelerate growth, this is where they should come.”
The rest of our tour is indeed like a ping-pong match where Van der Kleij thwacks all suggestions of Level 39 being Tech City 2.0.
Van der Kleij insists that he and Canary Wharf Group chairman Sir George Iacobescu together have built a “less shabby, more chic” tech incubator for next-gen fintech, retail tech and what he calls “future cities tech superstars”. He tells me at his 29,000 square feet incubator space, companies can take up fixed desks for £500 a month and hot desks for £300 a month. Others interested to set up a full office can pay £1,200 a month and £1,400 per month for an office with picturesque views of London.
The proposition of the accelerator? It’s on one of the higher floor of UK’s second-largest skyscraper, is backed by Canary Wharf Group and the access to “business rockstars” through Van der Kleij’s rolodex of contacts. Soon after London Mayor Boris Johnson cut the digital ribbon to the premise (see video below), Barack Obama’s former chief information officer Vivek Kundra and Bright Ideas Trust founder and LondonlovesExecellence judge Tim Campbell MBE dropped in.
But why Canary Wharf?
“I asked Sir George the same question when he approached me to take this job,” an animated Van der Kleij tells me.
“I never knew that there are close to 7,000 people working in technology, media and telecommunications clusters in Canary Wharf in companies like Thomson Reuters and Infosys.
“Also, banks are on a look out for new technology that will help them improve efficiency, transparency and visibility risk while meeting regulatory drivers. Now, Canary Wharf is the place where bankers have access to fin-tech entrepreneurs who’re making ground-breaking products.”
Boris cuts digital ribbon
Although aimed at being a serious workplace, the décor isn’t just a bunch of chairs dumped on an office floor. It’s designed by Gensler, the same architects responsible for offices at Facebook and Google.
Level 39 includes three ‘sandboxes’ where start-ups can brainstorm away from their regular office space. There’s a room called ‘Eastminster’ aimed at government officials discussing alternate policies, a Private members’ clubs for investors and a 200-seat events space. There’s also an iPad controlled coffee machine, a cup of sweets on each table and a Steve Jobs graffiti on the wall – all these features are very cool, very Tech City-esque.
But the man’s hell-bent on the fact that he’s not “competing but complimenting” the Tech City and any suggestions are merely journalists’ attempt “to create a more interesting story.”
Well from the outset, it’s difficult to believe him. After all, he’s the man David Cameron appointed to make Tech City. While he admits that it “his experience at Tech City” that prompted him to take up the job, it’s his struggle with his fintech business Adeptra that helped him realise that companies need more to slingshot growth.
“I raised a lot of venture capitalists but the business nearly bankrupted me. I sold that business, thank goodness. The experience made me realise how difficult it is for companies to get traction and sell to potential customers.
“That’s why with Level 39, we’re bending over backwards to get customers for businesses based here. Having this address gives companies more visibility and they’re able to establish credibility instantly. This is where you can easily bump into people you need to bump into to grow the company.”
Van der Kleij says he’s based three of his own start-up businesses in the premises and feels that it’s “the best place to grow his business”.
I remind him that the brand proposition of Tech City too is to be “the location of choice for start-ups and growth businesses,” then how is Level 39 different?
“We’d allow a start-up here only if it has more than a fab idea. It needs to be baked into more of a prototype or a working concept to demonstrate it. There are other incubators that work really well for the concept phase of a start-up. For us, it’s next stage and teenage companies.”
Drawing from his experience of running Tech City, Van der Kleij has made sure he’s not repeating the same mistakes the Silicon Roundabout has made in the past.
In a report published by think tank Centre for London last year, Tech City was criticised for not being able to provide effective mentoring to businesses. The report said that despite “strong demand” for advice on business matters, “many companies had trouble accessing this advice in the neighbourhood”.
Level 39’s fixed that problem with it’s “Entrepreneurs in Residence” scheme which would ensure that four experienced technology entrepreneurs will be at the beck and call of members for any advice or mentoring.
I asked Paul Murphy, CEO of call recording app Call Trunk of what it’s like to set up a base here.
“We’ve rented one desk here and are pretty happy. We want to work with banks and being here increases the credibility of the business. It’s a really good location to come across as a serious player as opposed to our offices in Whitechapel.”
The other lure for tech geeks to look to Level 39 is its line-up of 40 tech events. Next week, Boris Johnson and David Cameron’s ex-policy advisor Rohan Silva are among other bigwigs who would attend the InnoTech Summit in the events space. Also, there are other events like a hackathon organised for UCL students by J.P. Morgan, Bank of America Merrill Lynch to make an app in 24 hours.
Wouldn’t these tech-tastic events draw crowds from Shoreditch?
“Yes, we’ve had over 250 people visit in the tech industry over the last two months which is fab. Yet, I think there’s place for both, I consider Level 39 to be part of London’s tech scene. London’s super growth companies need places like Canary Wharf and King’s Cross that support growing businesses. They are so important and we should be able to have the right proposition for them. With Level 39, we help creating a soft landing of a company into the Canary Wharf estate and then they can go two employees to 20 and then to 2000.”
He also forecasts a change in Canary Wharf’s culture where more bankers will want to start businesses.
“We’re getting a lot of applications from bankers with Computer Science degrees who, by working in the finance industry, know the products that can transform it. It’s interesting to see bankers taking risks to set up businesses and they’ve got the right platform here to do so.”
Moving on to business numbers, Van der Kleij tells me that they plan to break even in three years and the rate at which the enquiries are coming in, he’s confident he’ll meet targets.
The premise cannot fit businesses with more than 10 employees but companies who grow up too quickly wouldn’t “be punished for growth”.
“We offer what we call a “Favoured Nation Deal” to companies. If they grow up too quickly and want to stay in the estate, we’ll get them a good deal elsewhere in the building or elsewhere in the estate.
“If they’ve got to sign the lease elsewhere, we’ll tell them there lease here. I’m sure we won’t be at a loss as we already have a lot of businesses in the pipeline who want to set up a base here.”
From inviting high profile investors to mentorships and even a private members’ club for angel investors, Eric Van der Kleij is pulling all wires to attract London’s cream of tech talent.
And then he says he’s not building a tech rival?
“Shoreditch needs Level 39 the way the City of London needed Canary Wharf when it came about. We are not the start up engine, but the grow up engine.”
So, who finally won the ping-pong match? You decide, dear reader.