Tech Industry

London to tech startups: Please don't mind the Brexit gap

It's been business as usual in London for tech companies, even with a looming split from the European Union.

London mayor Sadiq Khan tells New Yorkers about his city's opportunities for tech companies, even after Brexit.

WeWork

The UK faces a potential economic backlash from its decision to exit the European Union, but London Mayor Sadiq Khan doesn't think tech startups should be worried.

Khan on Monday stopped in New York while on a goodwill tour that included visits to Montreal and Chicago. His mission: to win back the hearts of tech companies that may be turned off by Brexit. The breakup looks bleak for tech, with nearly nine out of 10 British tech leaders opposing Brexit before the June vote. And while the effects of Brexit haven't taken hold yet, Khan remains optimistic about London.

The British metropolis remains Europe's hub for the technology sector, Khan said, citing a poll commissioned by London & Partners, the mayor's economic promotional company.

"London's been open to people, to trade and to ideas for more than a thousand years, and that's not going to change," Khan said Monday at the Chelsea office of workspace company WeWork.

The survey reached out to more than 200 US tech executives, who believe London is the best city in which to build a startup in Europe, beating out Berlin, Paris and Dublin. While Brexit means London soon won't have access to the EU's open market across the continent, US tech leaders still choose the city for its "favorable time zones and lack of language barriers," according to a statement from the mayor's office.

Khan (left) speaks with WeWork CEO Adam Neumann at the company's Chelsea office in Manhattan.

WeWork

Brexit's economic baggage hasn't seemed to hurt the US relationship with London, as the UK's tech sector netted more than $500 million in investments since June 23, the day the nation voted to separate from the EU.

Khan was in New York to encourage more tech startups to follow, telling investors they have nothing to fear.

WeWork, based in New York, shrugged off Brexit, pledging Monday alongside Khan that it would open two new office spaces in London. It has already invested heavily in London: WeWork's largest building is in the city, which is its second-largest market.

"We know that London is going to do amazing, and nothing is going to change," said WeWork CEO Adam Neumann.

While it's been business as usual for London's tech companies, government officials like Khan are going to have to work hard to make up for the effects of Brexit. The changes haven't taken shape since the UK hasn't yet invoked the formal process that would officially split the nation from the EU.

Until then, government officials are scrambling to make sure tech companies thrive in London, said Russ Shaw, the founder of the Tech London Advocates.

So far, he's said, tech companies are still seeing investments pour in, despite initial concerns over Brexit. But the primary issue for tech leaders isn't investments, it's immigration.

With one in five tech workers in London coming from an EU country, the Brexit vote threatens the growth of the city's startups.

"One of the things that really alarmed us from the day after, is that a lot of the overseas talent, the EU nationals that were here, felt really unwelcome," Shaw said. "We moved pretty quickly to say, 'don't leave, you are incredibly welcome here.'"

The UK will have to enact laws concerning immigration and workers if it hopes to soften Brexit's impact on the tech industry.

So far, Khan has been listening to London's tech leaders, adopting parts of the Mayoral Tech Manifesto by traveling the world and pitching the city as a hub for development.

"He's living and breathing what we've asked for," Shaw said.