9 of the Biggest British Startups are Unicorns
Once upon a time, the sun never set on the British empire. It wasn’t just about military might. Britain’s East India Company—really the world’s first mega-corporation—accounted for about half of all global trade at the peak of its power. Those days are long gone. Its former colony, India, has more billion-dollar startups than the United Kingdom. China is in charge of the world’s second-biggest economy and home to about 20 percent of all unicorns, private companies with a valuation of at least $1 billion. Still, the United Kingdom is a key player in the global economy. 9 British startups are among the world’s 194 most highly valued startups.
Global Switch – $6 billion – Computer Hardware and Services
Britain’s most valuable startup is barely still British, after a consortium of private Chinese investors bought a 49 percent stake in Global Switch, which operates wholesale data centers across Europe and the Asia-Pacific. The nearly 20-year-old British startup, based in London, took in about $530 million in debt financing in February, with no other details on its previous investment profile. In 2014, it reported revenue of £358.4 million ($639 million in 2014 dollars) with total assets of £4.4 billion ($7.04 billion in 2014 dollars) and claims to hold the highest credit rating of any data center company in the world. It’s not the sexiest industry—what, with the bad teeth and all—but with the exponential growth in data, this industry is about as certain as death and taxes.
Oxford Nanopore Technologies – $1.55 billion – Healthcare
You know that you’ve invented some cool technology if astronauts are using it on the International Space Station. British startup Oxford Nanopore Technologies has built up a sizable amount of funding over 11 rounds—$534.41 million. Its most recent venture funding took in about $126 million in December, led by GT Healthcare. Its flagship product is a pocket-size DNA/RNA sequencer that can be had for $1,000. It provides results in real-time, for applications ranging from environmental monitoring to disease surveillance. This is the sort of device you want on hand when the Zombie Apocalypse goes down to identify the infected among you that want to eat your brain.
TheStreet has gone so far as to speculate that the company may IPO in the next year or two, as soon as it resolves a patent fight with early investor Illumina. Public company Illumina (NASDQ:ILMN), as we’ve reported, has been a leader in genomics technology and a heavy investor in similarly minded startups.
Farfetch – $1.5 billion – E-commerce
It seems a little surprising to find a luxury fashion retailer in the unicorn club, but the fact that technology investor IDG Capital led a $110 million Series F last year suggests that Farfetch is no ordinary clothing retailer. The London-based startup has taken in a total of $304.5 million. In a sense, Farfetch is the Amazon of high-end fashion, offering boutique lines from across the world on one e-commerce platform. However, the British startup isn’t out to destroy brick-and-mortar business, but use technology as a way to improve the shopping experience between stores and the web. At a “Store of the Future” event (see video below) at London’s Design Museum last month, Farfetch showcased a number of ways it’s using tech to achieve that goal, Bloomberg reported.
For example, a “connected clothing rack” records items customers pick up, storing them in a smartphone app where they can later swipe left or swipe right to edit selections. It’s probably only a matter of time before Farfetch turns to artificial intelligence to improve fashion.
BrewDog – $1.15 billion – Food & Beverage
Craft beer brewery BrewDog has got to be the tastiest British startup in this bunch. It jumped into the unicorn club last month after raising about $124 million, to bring total investments to $226.42 million. The latest round involving San Francisco-based TSG Consumer Partners also included another $140 million for early shareholder liquidity. In other words, TSG just bought itself 23 percent of the Scottish beer brewing company. Until then, BrewDog had based its investment strategy on equity crowdfunding, a platform that we’ve criticized before here and here. But apparently there’s an exception to every rule. Now the Scottish upstarts are taking the show across the Pond. They’ve already opened a brewpub in Columbus, Ohio, and are building a 100,000 square foot brewery there as well.
The British (er, Scottish) beer invasion also involves the company’s most ambitious equity crowdfunding campaign yet. Equity for Punks USA aims to raise $50 million by selling more than a million shares in the company. Buying shares in a private company like this comes with a bunch of caveats, but we’ll leave you with a couple of positives: You can get discounted and free beer. We know: We had you at free beer. But also: Early investors in the company saw their shares increase by +2,765% with the latest investment deal, so there’s money to be made in beer as well.
TransferWise – $1.1 billion – Fintech
London-based TransferWise offers a low-cost money wire service that promises no hidden fees. Yeah, not as exciting as beer, but for ex-pats like us, a service that helps move money around internationally at reasonable rates is a good find. Money has certainly been flowing into TransferWise. The British startup has raised $116.37 million over a half-dozen rounds, the most recent a Series D last May for $26 million, involving the likes of Andreessen Horowitz. Previous investors included Sir Richard Branson and PayPal founder Max Levchin. TransferWise co-founder Taavet Hinrikus was part of the team that founded Skype in 2003.
TransferWise provides this handy cost comparison of transferring $1,000 into Euros against big names in the industry below. We also checked Western Union, which only asked for a $5 fee but made more money with the exchange rate, delivering only €868.57.
Business Insider reported that the company opened a new regional office in Singapore last month, as it looks to expand its services in Asia. The company employs 650 people and claims to transfer more than £1 billion (about $1.3 billion) across 750 currency routes each month.
Shazam – $1 billion – Mobile Software
Wasn’t Shazam the name of a movie starring Sinbad? If you said yes, you’re suffering from something that’s been coined the Mandela Effect. In this instance though, we’re referring to a startup called Shazam, another surprising find in the British startup unicorn club which has raised $143.5 million over a dozen funding rounds. Founded in 2000, Shazam produced one of the OG apps of the pre-smartphone era. You had to dial “2580” on your phone and hold it to the music. Shazam would then send a text message with the name of the artist and song title. The app has been upgraded a few times since then, and it now lets you “shazam” TV shows and ads to get special offers and more information on what you were watching. Fortune reported that the company is now jumping onto the augmented reality bandwagon. It plans to develop AR apps that are part game, part marketing.
Funding Circle – $1 billion – Fintech
The only other fintech among the British startup unicorns, London-based Funding Circle has nabbed $373.24 million in funding. It counts Accel Partners and Index Ventures among its biggest boosters. Both firms took part in January’s $100 million Series F. Funding Circle is a peer-to-peer loan company in the mold of Lending Club, but instead of lending to consumers it connects small businesses with investors. In 2015, it originated more than $1.1 billion, according to Forbes. Before you get out your checkbook to get in on the action, read the fine print: Funding Circle USA only works with accredited individual and institutional investors.
Benevolent.ai – $1 billion – Healthcare
This name should sound familiar. We just covered Benevolent.ai as one of nine drug discovery startups using artificial intelligence. Between Q4 2013 and Q3 2015, the company conducted four rounds of funding, raising a total of around $100 million at a final valuation of $1.781 billion. This unicorn has ambitious goals to speed drug discovery and sell its own drugs directly in the next four years. Benevolent landed a $800 million contract in 2014 to develop drugs to treat Alzheimer’s and has reportedly brewed up 24 drug candidates since then.
Improbable – $1 billion – AR/VR
Improbable is so new to the unicorn club that the fairy dust still hasn’t settled. It closed a Series B on May 11 for $502 million, led by Softbank and that included Andreessen Horowitz. That brought total funding for the British startup to $554 million. Improbable develops platforms for third parties to build vast virtual and simulated worlds. We’re talking Matrix-sized worlds where you feel as if you indeed slipped down the rabbit hole to Wonderland. We profiled the company extensively in February and are not surprised they’ve taken this jump into a new reality.
The days of the East India Company may be over—probably a good thing considering the messy opium wars and all—but these British startups are proving the entrepreneurial spirit never sets in the United Kingdom.
Want to know what 30 tech stocks we own right now? Want to know which ones we think are too risky to hold? Become a Nanalyze Premium member and find out today!