Few locations say “big finance” as loudly and assertively as London’s Canary Wharf. Characterized by some of the UK’s tallest buildings, it also provides a home for many of the best-known names in the financial services industry, including HSBC, Barclays, Citigroup, and JP Morgan Chase. As such, it’s a slice of prime real estate that has, since the 1990s, established itself as one of Europe’s main financial centers. It’s not the sort of place where you would expect to find too many tech startups.
But the estate’s management company – Canary Wharf Group – is keen to confound that expectation. Lurking in the estate’s highest tower – One Canada Square – is a tech hub and workspace dubbed level 39. And as group Managing Director John Garwood explains, the presence of a cluster of startup and scaleup companies reflects a conscious effort on the part of Canary Wharf Group to attract a more diverse community of companies.
“Ten years ago the profile of Canary Wharf was 70 percent financial services. Today the figure is about 55 percent with 45 percent non-financial. We have been keen to diversify and create a business center rather than a financial center,” Garwood says.
Running On Digital
So where do tech startups and scaleups fit into this realignment? Well as Garwood is keen to stress, we live in an age when the financial service industry runs on digital technology. As things stand, Canary Wharf’s office blocks are home to somewhere in the region of 30,000 tech workers. In addition, Garwood says the businesses working there account for around 30 percent of the financial services industry’s IT spend.
So in that respect, Canary Wharf offers a potential pool of customers for tech startups – particularly, but not exclusively, those working in fintech and cybersecurity. Viewed from that perspective, opening a hub for technology companies right in the heart of the estate seemed like a potentially smart move. Not does it deliver on a diversification agenda, but it also allows corporate businesses and innovators to sit alongside each other and establish commercial relationships.
And according to Head of Level39, Ben Brabyn, Canary Wharf offers real benefits to early-stage tech businesses. “It’s a fantastic physical environment with exceptional infrastructure,” he says. “But in addition to that, we can also help businesses achieve maximum traction in the markets.
So what does that mean in practice? According to Brabyn, it’s partly about the physical proximity of potential buyers but Level39 also aims to provide its tenants with access to a nationwide support network spanning business, academia and regulatory bodies.
But here’s the thing. London is awash with co-working spaces, some independent, others run by multi-site specialists such as WeWork. In terms of location, we’ve all got used to the fact that London’s tech scene was born out of some fairly funky urban spaces around Old Street and Shoreditch – the so-called Tech City and Silicon Roundabout areas. So will entrepreneurs warm to the slightly less funky gleaming towers of Canary Wharf? And does it mean paying higher rents.
In terms of rent we are comparable to other co-working spaces,” says Brabyn. “But in terms of what we can help companies achieve we are out of the park.”
A Collaborative Environment
So should you be rushing to relocate your company to One Canada Square? Well, there are criteria that have to be met. All businesses should be at the minimum viable product (MVP) stage and also be prepared to work in an open, collaborative environment. “You also need to be able to meet the terms and conditions and pay the rent,” says Brabyn. “If you meet those criteria, get in touch, we have capacity.”
You could perhaps suspect that the presence of Level39 is something of a token gesture. In an age when entrepreneurs are the new rock stars, it perhaps makes good marketing and PR sense to provide space for early-stage businesses in one of the U.K.’s most prominent business centers. But The Canary Wharf Group seems serious about diversification and encouraging entrepreneurs to come on board.
Witness the next stage of the estate’s development – the regeneration of the Wood Wharf area. This will provide a mix of residential accommodation, plus commercial spaces designed for tech and creative companies.
If You Build It Will They Come?
In catering for smaller companies from the get go, Wood Wharf represents a change of strategy for the estate’s managers. Previous developments have been dependent on major clients committing to taking space ahead of work beginning. This is not really an option if you’re aiming to attract early stage businesses. You have to build first and hope they come.
“In Wood Wharf, we know we have to build the spaces first and then attract businesses,” says Garwood. “That’s a new approach for us.”
So what does all this mean for startups? In the end, it comes down to another set of choices in terms of location and networking opportunities. These days most workspaces claim to add value , often through access to expertise and networks. For entrepreneurs it’s a case of assessing what that value might be. In terms of the bigger picture, perhaps the provision of startup-friendly facilities in Canary Wharf also represents an acknowledgement of a thesis that has not yet quite been proven – namely that Britain’s tech startups are crucial to the UK’s economic future.