This week, I wrote that London social startup Sup is currently in the process of filing for administration.
The startup, founded last year by former Googler Rich Pleeth, allowed people to see which of their friends were close by and send them a “Sup” to let them know that they were keen to meet up.
Sup managed to raise £649,000 altogether but Pleeth needed additional funds if he was to keep the company afloat.
The former marketing manager, who held stints at Gett Taxi and L’Oreal, in addition to Google, told Business Insider that he had an undisclosed German fund and two other individuals lined up to invest in the company before the UK voted to leave the European Union on June 23.
The Brexit vote spooked the investors in a big way, according to Pleeth, who was keen to stress that he takes full responsibility for Sup’s failure and that Brexit was one of many factors that led to Sup shutting up shop.
“We were having very good conversations and were like: Next week after Brexit we’ll be fine because the pound will go back up,” said Pleeth. “After that happened they were just too nervous about what’s happening now.”
Pleeth said the investors noticed the volatility in the market and decided against investing in Sup as a result.
“Stability to investors is like crack and heroin,” he said. “They get addicted to it and suddenly, if there’s this instability, they want to keep their money. People [investors] have said to me: ‘Now I’d much rather double my money now than 10x it because I’m just too nervous about what’s going to happen’.”
Sup joins many other UK startups impacted by Brexit
Sup isn’t the only London startup to be impacted by Brexit. Betting startup Smarkets is in the process of looking for a new office in the US as it looks to shift the company’s centre of gravity away from the UK.
“Brexit gave me the impetus to move sooner rather than later,” Smarkets CEO Jason Trost told Business Insider. “I feel very strongly about it. I think it’s one of the biggest mistakes this country has ever made — a catastrophe is putting it lightly.”
Meanwhile, TransferWise, a currency exchange startup in London that’s now valued at over a billion dollars, told The Guardian after the Brexit vote that “headquartering elsewhere is now a possibility.”
Other UK startups are also looking to move abroad to increase their chances of making it, according to a report from International Business Times. Over 100 London startups were thinking about relocating to Berlin in July, the news website wrote citing a senior Berlin politician.
Berlin Senator for Economics, Technology and Research, Cornelia Yzer, reportedly said dozens of startups had approached her office about relocating to Berlin since the UK voted for Brexit. “Not ten, or 20, or 30 — more. Over a hundred,” she said.