Back in 2013, I visited the Ignite accelerator in a large room it had leased in Newcastle’s Generator Studios, I remember there was an app development company called Hedgehog Lab based in a small adjacent room. Four years on, I returned. That small room is now Hedgehog Lab’s kitchen, and the bigger room is its main office. And that’s just a part of the company’s empire.
Hedgehog Lab epitomises how companies in the Northern tech sector can take on the world. Growing fast, with a global outlook and international footprint, the Newcastle-based firm had humble beginnings a decade ago.
Co-founded by Sarat Pediredla and Mark Forster in 2007, the company had a couple of false starts before finding its current path. It began as a software firm serving the banking sector, but the 2008 financial crash put paid to that. Financial institutions suddenly weren’t so keen to spend £100,000 per year on software, Pediredla says.
Pivoting to become a digital agency, Hedgehog Lab found itself undifferentiated in a market where competition often amounted to aggressively undercutting local rivals.
Embracing the post-PC world
As Apple’s iPhone and App Store rocketed to success, Pediredla had a gut feeling that it would make sense to specialise in mobile app development. But in 2010 there was no local market for app builders in Newcastle, so he got on the train to London to find clients.
It was then that Hedgehog Lab took its current form as what Pediredla describes as a “post-PC consultancy,” specialising in mobile and emerging technologies. He says the company decided to resist any temptation to do more stereotypical ‘provincial agency work’ like SEO and marketing.
A couple of early successes proved the company was on the right path. It built a web app for the Financial Times and a cookery app for Channel 4’s ‘Jamie’s 15-Minute Meals.’ Both were well-received and the latter won a design award.
Fast forward a few years, and Hedgehog Lab has 106 employees around the world. Still headquartered in Newcastle, the company has two offices in the USA (Austin, Texas, and Boston, Massachusetts), one in Hyderabad, India, and a recently-opened subsidiary in Copenhagen, Denmark.
Go where the business is
The decision to be an international company was made early. The first US office opened when Hedgehog Lab employed just 28 people. “What we’re good at is designing software around the £50,000 to £300,000 pricetag,” says Pediredla. “The easiest way to expand our client base is to go where the demand is. Clients won’t hand over cash without a local presence.”
While he says confidentiality agreements prevent him disclosing the names of most of his clients, Pediredla says that well-funded startups often call on the company to build their apps. One of the largest insurance companies in Texas is also on the books.
At a time when the UK’s future relationship with the EU is uncertain, expanding in Denmark might seem a risky move for a relatively small company. But Pediredla says it makes a lot of sense, and Brexit didn’t really impact on the process. There’s a good local market for high-quality apps in Copenhagen; there was a gap in the market for an agency their size; similarly forward-thinking Malmö is just across ‘The Bridge’ to Sweden, and Newcastle is a short flight away.
While Hedgehog Lab seems to have no problem finding new clients, it’s now looking to go full circle back to how it began. Yes, Pediredla says he’d like to see the company develop its own intellectual property. “We should have our own product department since we create so many good ideas. We want to go into product partnerships where we take equity, as well as developing products on our own.”
Hedgehog Lab isn’t going to drop its clients, though. Through current work exploring virtual reality and machine learning, it’s looking for new ways to help them.
Despite generating 60 percent of its business abroad, with clients as far away as Egypt and China, Pediredla says that Newcastle will always be home. He says being based in the city is a “strategic advantage.” It can compete globally from a city with a relatively low cost base and still offer a good working environment.
Indeed, the company will be doubling its Newcastle office floor space this year. That small room next to an accelerator will soon feel like even more of a distant memory.
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