Chancellor hails London tech success as capital beats European competitors again
Chancellor Rishi Sunak today hailed London’s bounce back from the pandemic as new figures show the capital is sprinting ahead of rival European tech hubs.
London has attracted more venture capital investment to its startups than anywhere else in Europe and now boasts more unicorns – firms valued at more than $1bn – than France and Germany combined.
UK startups are on track for a record year of investment after a wave of megarounds sent venture capital (VC) investment soaring to £13.5bn in the first six months of 2021, outsprinting the figure for the whole of 2020, according to new Dealroom data compiled for the Digital Economy Council.
“This fantastic data shows the UK continues to be one of the most attractive places in the world to start, grow and invest in high-growth, innovative businesses and shows in particular that our fantastic capital is bouncing back,” Sunak told City A.M.
“London has cemented itself as Europe’s leading tech hub, a sign of our capital city’s talent, innovation and resilience,” he added. “The tech sector will play a pivotal role in our future economy and help drive forward our recovery from the pandemic.”
A series of mega fundraising rounds by the UK’s leading tech companies are largely responsible for the record figures, with more than half of all rounds raised this year reaching more than $100m.
Chief among them was challenger bank Revolut’s £577m Series E round in July, cybersecurity platform Snyk’s £289m Series E round in March, car sales platform Cinch’s £1bn raise in May and online event company Hopin’s £289m Series C round in March, which cemented its status as the fastest-growing European tech company ever.
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This influx of cash has sent company valuations rocketing and the UK now boasts 105 unicorns.
In the first six months of the year alone, 20 UK startups achieved unicorn status, including Zego, Tractable and Depop. And valuations show no sign of slowing down: the UK also boasts 153 high-growth companies that are tipped to become unicorns in the near future – dubbed “futurecorns”.
While many of the UK’s industries that rely on consumer footfall struggled to keep afloat during the pandemic, the accelerated move to digital has been a huge catalyst for growth amongst many of the UK’s startups that identified pockets of opportunity – including healthtech and enterprise software.
Fintech continues to dominate the majority of investment rounds in the UK and attracted £4.2bn in the first six months of the year. As a result, the booming sector accounted for 11 of the 20 companies that achieved unicorn status during the period, and Revolut wears the crown as the UK’s single largest tech company, valued at £23bn at its latest fundraising.
Close behind, healthtechs cashed in on our renewed focus on health and raised £2.7bn in the first half of the year, and remote working and its accompanying cybersecurity threats saw enterprise software startups raise a combined £1.3bn.
“I want our country to be a nation of entrepreneurs, and these innovative firms are critical for our future success, creating jobs, economic growth and transforming the way we live our lives,” Sunak said.
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