Thursday 13 December 2018

Irish tech startups forced to consider UK relocation after Brexit vote

Some London-based startup founders say that tech and financial companies may leave the UK for Ireland because of Brexit. Stock image
Some London-based startup founders say that tech and financial companies may leave the UK for Ireland because of Brexit. Stock image

Adrian Weckler Technology Editor

The UK withdrawal from the European Union may cause some tech startups to move operations away from Ireland because of feared new trading tariffs.

"90pc of our customers are UK-based," said Rory O'Connor, founder and chief executive of Wexford-based Scurri.com, which employs 25 people.

"Obviously we'll wait to see what happens. But because Britain is such a big ecommerce market and so much of our customers' activity is within the UK, we need to be on top of any new paperwork, documentation and rules that come out of new trade deal or tariff structure. That means we would have to move people there."

Despite the necessity to move resources into the UK, Mr O'Connor said that he thinks that Britain could now forfeit over €40bn in ecommerce growth because of its decision to leave the EU.

"In 2015, £455bn was spent by Europeans consumers online on ecommerce sites and £157bn of this was from the UK alone," he said. "For 2016, this figure is expected to reach over £510bn for the whole of Europe but the UK's expected increase of £33.4bn to £173.6bn in 2016 could be lost as a consequence of the Leave vote succeeding."

Some London-based startup founders say that tech and financial companies may leave the UK for Ireland because of Brexit.

"Many companies here depend on both EU market access and the ability and legal right to passport their services to the rest of Europe," said Michael Kent, founder and chief executive of the money-sending service Azimo.

Speaking to Tech City News, Mr Kent said that he expected to see companies moving resources elsewhere in Europe.

"Frankfurt, Amsterdam and Dublin are all obvious candidates," he said.

However, the UK's strength as an ecommerce hub means that smaller Irish startups that have focused on the British market for initial growth are now caught in a dilemma.

"We're not alone in thinking about moving to the UK," said Mr O'Connor. "You'll find people considering this actross the Irish tech landscape. Especially startups that have operations in the UK who will be considering this as an option. At the end of the day, we need to service our customers. We love being in Ireland and we hope to continue to have people in Ireland. But if there was some reason we have to be in the UK to services customers, we have to move people there."

Scurri.com is an online delivery fulfilment platform, with over 30 carriers and delivery companies as customers based in the UK.

"In our business, ecommerce is huge," said Mr O'Connor. "The UK is probably the most sophisticated ecommerce market in the world, with 16pc growth. It's a massive online market and that's why we're there."

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