Tech firms make poor showing in Sunday Times Rich List
Internet entrepreneurs are gaining ground, but traditional software firms are lagging
Technology entrepreneurs made a poor showing in this year's Sunday Times Rich List, with individuals and families in the “computers, telecoms and internet” category making up just 65 of the top 1,000 richest people in Britain and Ireland.
David and Simon Reuben, owners of £4 billion data centre company Global Switch, maintained their eighth-place position. The brothers, who made the majority of their fortune in property and in scrap metal, plan to float Global Switch, which owns and operates eight data centre campuses across Europe and Asia-Pacific.
The Reubens were followed in 16th place by Sir Richard Branson, owner of brands including Virgin Media. Branson, who is worth £3.4 billion, currently has his sights set on new horizons, with nearly 500 people paying $200,000 for a seat aboard the world's first commercial spaceliner, Virgin Galactic.
John Caudwell, founder of mobile phone wholesaler the Caudwell Group and high street brand Phones4U, ranked number 42. The Caudwell Group was sold for 1.46 billion in 2006, and Cauwell's remaining stake netted him £100 million when Phones4U was sold in March 2011. He is thought to be worth £1.5 billion.
Cauldwell came in ahead of his long-term rival Charles Dunstone, founder of both Carphone Warehouse and TalkTalk, who claimed 86th place with a fortune of £860 million. Falling share prices have hit Dunstone's companies badly, and his stake is now worth £809 million – down nearly £140 million in a year.
Another notable appearance in the top 100 was Sir Terry Matthews, founder of telecoms company Mitel, later sold to BT, and Newbridge Networks, which was purchased by Alcatel in 2000. At number 69, Matthews is the richest man in Wales with a fortune of £1.09 billion.
A cluster of internet entrepreneurs gathered around the 150 mark, including Skype co-founder Niklas Zennstrom (139), Moneysupermarket.com co-founder Simon Nixon (155), and new entry Andrey Andreev, creator of online dating site Badoo (164).
Zennstrom, now worth £600 million, has shot up 104 places since last year, overtaking Mike Lynch (210), founder of software company Autonomy. Skype was bought by Microsoft in May 2011 for £5.2 billion, and Autonomy announced it was being acquired by HP for £7.1 billion in August.
Lynch's fortune has grown by £84 million in the last year, and he has gained 26 places since 2011. Graham Wylie, founder of software company Sage, did not fare so well however, dropping from 393th place last year to 417th in 2012. Sophos founders Jan Hruska and Peter Lammer also fell steeply from 351st to 569th this year.
Daniel Ek, the Swedish founder of streaming service Spotify, is a new entry at number 395, and has an estimated worth £190m at the age of just 29. Joanna Shields, head of Facebook in Europe, is also expected to break into the top 1,000 next year.
Despite the disappointing showing for technology entrepreneurs in the top 1,000, venture capitalists have been doing well out of hi-tech investments. Alisher Usmanov, who is the second richest man in Britain, worth £12.3 billion, paid $200 million (£123m) for a 2.3% stake in Facebook, which could be worth $2.3 billion when the company floats later this year.
Meanwhile, Welsh-born Michael Moriz, leading partner at Sequoia Capital, is now worth £1.08 billion thanks to investments in Google, PayPal, Cisco and LinkedIn, among others; and Michael and Xochi Birch, who sold their 70% stake in social networking site Bebo to AOL for £418 million in 2008, have since invested in TweetDeck, which was sold last year for £25 million.
“Making a real fortune (£100m+) from tech is still relatively rare in the UK. People like Mike Lynch and Niklas Zennstrom from Skype are really exceptions and exceptional,” said TechMarketView analyst Richard Holway. “But most people I know in tech are not doing it just for the money. I think it is a very satisfying way to contribute.”