Koru Kids Fear post-Brexit Immigration Headache for London's Tech Startups

Koru Kids impact visa

London's celebrated tech startup industry faces increased uncertainty owing to shifts in immigration policy says Rachel Carrell, CEO at Koru Kids.

Koru Kids is a London-based technology startup which helps parents share their nannies, in order to access high quality childcare more affordably. 

The nannies look after the children at the same time, meaning that the families each pay less, the nannies get paid more, and the children have a friend to play with.

Koru Kids provides the matching service and ongoing support with the administration of tax, contracts, payroll, pension etc.

For New Zealand born Rachel Carrell, Koru Kids CEO, the decision on Brexit offers both postives and negatives.

“There will be fewer nannies coming to London, which means the cost of a nanny will increase,” says Carrell - and more expensive nannies is likely to lead to more sharing of nannies, something Koru Kids can assist with.

“But many parents who employ nannies will also likely leave – the French bankers, for example. This will partially counteract the effect, but only partially,” says Carrell.

“Since Koru Kids provides nanny share, which is a way for parents to afford nannies that they otherwise might not be able to, we expect the net effect on our business will be positive as more families decide that they would like to share in order to offset the high cost of employing a nanny,” says Carrell
Carrell came over here from New Zealand in 2002 and naturalised as a British citizen.

Since she’s been she has seen the visa system tighten up and it’s now much harder for Kiwis to come and work in London.

The CEO says the situation is terribly sad and "not good for the UK economy.”  

Immediate waves of the referendum have already been felt by the business who have looked at applying for Horizon 20/20 innovation funding, an EU initiative.

Although the project has been confirmed in the short term, there is a chance that is may disappear and so Koru Kids have been reluctant to apply waiting instead to see if there will be any similar schemes offset by the UK Government.

The ability to employ talent from across the globe who may have settled in the UK is at the heart of Koru Kids, but even now existing regulations are putting blocks in the way, Rachel fears it will only get worse.

Indeed, the Conservative Party conference held in early October has seen the Government set out their stall for tighter immigration policies.

Progress on Highly-Skilled Visa Scheme

Koru Kids welcome recent initiatives to ease the visa process for people working in the tech scene.

But, there are still major challenges that must be addressed in order to ensure the brightest talent remains in the UK:

“It’s still too hard for startups to sponsor non-EU citizens. We just said a sad goodbye to our intern, who is from Kosovo. She is fantastic, very highly qualified with a First in Data Science from UCL, really wants to work in a startup – and yet she can’t find a permanent role as no startup can sponsor her.

“ The process is far too onerous for a small business.  If it became as difficult to take on EU citizens as it is non-EU citizens like her, the tech scene would really suffer.  I am hopeful it will not come to that, and that if Brexit does happen that fast-track or lighter touch processes would be established to allow EU citizens to work in small businesses.”

And of course the cost of running a business will have to be re-examined, from staffing costs to development and software.

The Impact of the Pound’s Decline on Outsourcing

With regards to the 14% fall in the value of Sterling since the EU referendum Carrell says the cost of outsourcing tech development is where the biggest risks lie.

Lots of London-based tech startups outsource some of their software development to cheaper places like Portugal, Eastern Europe or India. 
Carrell says:

“While we don’t currently employ outsourced technology staff, it’s something we would consider for the future. There are pros and cons of outsourced teams, and cost is the major ‘pro’.

“If sterling depreciates relative to these currencies then of course outsourcing would become more expensive and relatively less attractive.

However, the cost advantages are so huge vs. London that sterling would need to decline really precipitously to make an impact on that side of the ledger.

“Realistically, sterling decline wouldn’t make a difference to a decision to outsource, it would just make it slightly more expensive.”