New York: First Stop for a Micro-Invasion of British Startups?

8/24/12Follow @jpruth

Brits obviously are no strangers when it comes to crossing the Atlantic. But the choice of New York may seem a touch counterintuitive as a place for overseas startups to plant their flags.

New York is eager to attract more developers, designers, and engineers, whose ranks are deeper in Silicon Valley. However, Manhattan does have an edge when it comes to access to potential customers especially in marketing and retail, which can be hard for startups to ignore.

This year’s British arrivals in New York include Shopcade, a social e-commerce site, and Performance Horizon Group, which developed a software-as-a-service platform for managing and tracking big data in marketing and advertising. They’ve come to New York largely for access to potential customers, though they may bring other operations to the city.

Shopcade, founded last summer, is a retail-oriented website that curates apparel and other goods based on the brands and styles users tend to follow. The company’s current New York operations are focused on reaching more retailers and designers, especially up-and-comers looking to reach a broader audience. While most of the company’s technology team remains in Britain, co-founder and creative director Hoon Kim says Shopcade may draw on New York’s local talent as the company grows. “The U.S. represents more than 50 percent of our business,” he says.

Malcolm Cowley, CEO and co-founder of Performance Horizon Group, says his company officially opened its Manhattan doors in January to enter the U.S. market as quickly as possible. “We wanted to be in the thick of it where the decision-making was for global brands,” he says. PHG works largely with advertisers and brands, which typically roost in Manhattan.

PHG’s platform lets marketers manage and track data such as clicks and conversions from online advertising. The two-year-old company has a New York-based staff of seven, and Cowley says he would like to eventually to grow that team to as many as 15 with an emphasis on sales and marketing. In the meantime, Cowley has expansion plans in the works for the West Coast thanks in part to $3.1 million in funding PHG raised in mid-July from investors including Greycroft Partners and DN Capital.

Shopcade and PHG are far from being the only Brits in town and will not be the last. London startup GroupSpaces, which developed an online platform for managing groups such as sports clubs and charities, established its New York beachhead in 2010. Five-year-old GroupSpaces is backed by the likes of Avonmore Developments, Index Ventures, and Dave McClure of 500 Startups.

It remains to be seen if Brits, as well as startups from other countries, will fully embrace New York as more than a launchpad to acquire U.S. customers. Many companies open offices here to chase money, while the city fathers want New York to be seen as a permanent place for tech talent. The startups who stay in town may find that the city’s “Colonials” have a few technology tricks to share with their overseas peers.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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