The United Kingdom has become the leading European destination for technology investment.
While there has been much concern over the competitive position of the City this year, with Amsterdam surpassing London as Europe’s largest center for share trading and the value of the French stock market surpassing that of the UK, new data indicates that the UK’s technology sector continues to enjoy a significant lead over its European competitors.
According to data compiled by the data and intelligence platform Dealroom for the Digital Economy Council, fast-growing British IT companies raised £24 billion this year, more than their French and German peers combined.
It brings the total amount raised by UK technology companies over the past five years to £97 billion.
Capital has been increasingly difficult to obtain for much of the year as interest rates have climbed and global investors have become more skeptical of the technology industry.
According to Dealroom’s estimates, the UK’s tech industry is now worth $1trn, making it the third nation after the United States and China to reach this milestone and reaffirm its position as the top European innovation ecosystem.
Germany’s tech sector is currently valued at $467,2 billion, while France’s is valued at $307,5 billion.
According to the data, not only does the United Kingdom’s technology sector attract more venture capital than its European competitors, but it also generates greater returns for investors.
Since the turn of the century, the United Kingdom is estimated to have produced 144 ‘unicorns’ – start-ups with a valuation of more than $1 billion – and 237 so-called ‘future corns’, enterprises valued at more than $250 million and regarded likely to acquire unicorn status.
This is an increase from 116 unicorns and 204 future corns in the same period the previous year.
Paul Scully, minister of digital, stated: “The United Kingdom has completed the year as one of the world’s leading destinations for digital enterprises, despite facing global challenges.
This is wonderful news and reflects our pro-innovation approach to tech legislation, ongoing support for startups, and desire to improve the digital skills of the general population.
The numbers demonstrate the United Kingdom’s increasing appeal to foreign venture capital firms.
Some of the largest U.S. tech investors, including General Catalyst, Sequoia Capital, and Lightspeed, whom all built offices in the United Kingdom last year, have increased their staffing levels this year.
New Enterprise Associates, a 45-year-old US venture capital firm that has funded companies such as TikTok owner ByteDance, and Earlybird, a Berlin-based venture capital firm, have joined them in the UK this year.
This year, UK-based funds have raised £9.2bn – slightly more than the £9bn they raised in 2021 – to support fast-growing enterprises and start-ups.
Chris Bischoff, managing director of General Catalyst, commented: “We established a presence in London because we thought the British ecosystem to be exceptional on a worldwide scale. Our experience over the past 18 months has increased our respect for this extraordinary ecosystem, allowing us to identify and assist early-stage firms aiming to accelerate industry-wide transformation.
Moreover, our ideals of responsible innovation and radical cooperation are ideally aligned with the United Kingdom’s innovation strategy.
The Dealroom data also suggests that technological innovation is spreading throughout the United Kingdom.
There are now eight cities with two or more unicorns: Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham, and Oxford.
Some of these are currently viewed as posing a threat to the dominance of top US IT ecosystems in particular fields: Cambridge was recently ranked as the third most important science center in the world, behind only the San Francisco Bay Area and Boston, Massachusetts. Oxford ranked number five on the list.
More than 500 of the university’s alumni have secured at least $10 million in fundraising, placing Cambridge at the top of the global rankings for creating the most successful tech founders.
Oxford, Bristol, Nottingham, and London universities, together with Harvard and the Massachusetts Institute of Technology, were ranked among the world’s top 20 universities (MIT).
With more than three million individuals currently employed in technology in the United Kingdom, the sector is progressively hiring entry-level workers. According to the job search engine Adzuna, there were more than 15,000 entry-level IT positions in November, up from 6,596 in November of the previous year.
This has led to the establishment of several so-called ‘tech’ startups whose mission is to equip individuals with the coding and cyber security skills necessary for a successful career in technology. Multiverse, the first tech unicorn in the United Kingdom, was founded by Euan Blair, the son of former prime minister Sir Tony Blair.
Some of these initiatives, such as Code First Girls, attempt to increase the number of women working in the technology field.
The chief executive officer of Code First Girls, Anna Brailsford, stated: “From utilizing AI to combat healthcare disparity to planning and constructing space missions, fantastic digital enterprises are founded and scaled daily in the United Kingdom.
“However, too few women have the opportunity to work for these significant start-ups since they were not previously encouraged to pursue a career in technology or to acquire essential skills.
We intend to train and place 26,000 women in tech roles in the United Kingdom over the next five years so they may apply their knowledge and expertise to improve this industry.
