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London has maintained its position as the most popular location for Europe’s fastest growing companies but Paris is closing the gap as Brexit approaches.
The FT 1000 list, now in its second year, ranks companies by their revenue growth between 2013 and 2016. London is home to 74 of the businesses that made the list, followed by Paris on 62 and Milan on 25. The gap between the UK and French capitals has fallen from 33 in 2017’s list to just 12 this year.
The snapshot of corporate growth comes at a tricky time for London’s start-up sector, which is enjoying benign economic conditions but faces uncertainty about the future trading relationship with the EU.
The ranking of 1,000 companies from 31 countries was compiled by Statista, the research company, in partnership with the Financial Times. Top spot in this year’s survey was taken by London-based food delivery company Deliveroo. It takes over from German peer HelloFresh, which topped last year’s FT 1000 ranking before going on to an initial public offering in November.
“London’s light shines brightly for business,” said Eddie Curzon, London director at the CBI employers’ group. Nine out of 10 companies say the city is a great place to do business, according to the latest survey from the CBI and real-estate services group CBRE.
Mr Curzon said London’s technology and creative businesses are key to London’s future growth but they need further clarity on the Brexit deal between the UK and its EU partners.
He added that London’s “ingrained challenges” of providing adequate housing and infrastructure also needed to be overcome.
“These are two tough nuts to crack, as their combined effect is making it difficult for firms to recruit and retain the talented staff they need.”
In the fast-growing fintech sector, companies have raised concerns that Brexit is already causing a shortage of software engineers. Financial services and fintech contribute 19 of the London-based companies in this year’s ranking.
Kate Bell, head of economic and social policy for the Trades Union Congress, said getting Brexit right was the priority for retaining London’s attractiveness to start-ups.
“That means making sure there are no barriers to trade in both manufacturing and services,” she added. “We can’t have a final deal that makes it harder for London-based tech firms to do business in the EU.”
Ms Bell said the deal must also not make it harder for London’s tech groups and research centres to recruit workers.
An FT special report on the FT 1000 will be published online worldwide and in print in Europe on April 30.