Brexit Vote Sends Shockwaves Through Startup Community

June 27, 2016 - 3 minutes read

The United Kingdom’s Brexit vote in favor of leaving the European Union (EU) has sent shockwaves through the business world, and tech is no exception. Surging stock prices only 24 hours before the historic vote saw Wall Street place their bets against the UK’s departure, making Friday’s 52:48 near-tie all the more bitter a pill to swallow for tech startups and iPhone app developers in London and abroad.

Will the effects of the vote hamper growth in London’s thriving tech community? Only time will tell. For now, tech stocks are down along with the rest of the market. (A particularly tough blow on Twilio’s high-profile IPO, which investors still hope will set a positive precedent for tech IPOS in a year that’s been difficult for tech offerings.)

London-based startups — all overwhelmingly against the vote — are struggling to process the news. While no one knows what the long-term market effects will be, younger voters and those in the tech industry have reason to be wary moving forward. In a stateBrexit Vote Sends Shockwaves Through Startup Communityment to TechCrunch, London startup Kontainers said that ““There’s so much uncertainty around shipping, with the borders that would reappear all over the EU — no one knows what kind of complications that will have.”

While Kontainers’ statement alludes to potential problems physical borders pose to industry, software companies and iPhone app developers “shipping” digital products are sure to see the effects of changing trade regulations as well. Some London startups cited in media coverage of the event have even suggested relocating to Berlin, or other startup hubs in the EU.

Being in the EU certainly has positive benefits when it comes to scalability, but analysts doubt that we’ll see startups leaving the area en masse. While the vote is a significant blow for those benefiting from close ties to the rest of Europe, London’s tech roots go deep.

If there’s one thing tech startups are good at, it’s figuring out how to turn a profit in adverse climates. Britain was never known for it’s climate — so we have faith that London’s tech scene will rebound from the Brexit vote and continue to play a driving role in the international tech community.

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