While there has been much anxiety over the competitive position of the City this year – with Amsterdam overtaking London as Europe’s biggest center for share trading and the value of the French stock market overtaking that of the UK – fresh data suggests the UK’s tech sector continues to enjoy a significant lead over its European counterparts.
Figures prepared by the data and intelligence platform Dealroom for the Digital Economy Council suggest that fast-growing UK tech companies raised £24bn this year – more than their counterparts in France and Germany combined.
It takes the total raised by UK tech companies during the last five years to £97bn.
The numbers are all the more striking because, for much of the year, capital has become harder to come by as interest rates have risen and investors around the world have become more skeptical about the tech sector.
Dealroom’s figures suggest that the UK’s tech industry now enjoys a value of $1trn – making it only the third country, after the United States and China, to achieve this milestone and confirming it as the leading European tech ecosystem.
Germany’s tech sector is now valued at $467.2bn while that of France is worth $307.5bn.
Not only is the UK’s tech sector attracting more venture capital than its European counterparts, according to the figures, it is also creating more value for investors.
The figures suggest that, since the beginning of the century, the UK has created 144 ‘unicorns’ – start-ups that have gone on to achieve a valuation of more than $1bn – and 237 so-called ‘futurecorns’, companies which are valued at north of $250m and deemed to be on track to achieve unicorn status.
This is up from 116 unicorns and 204 futurecorns this time last year.
Paul Scully, the digital minister, said: “UK tech has remained resilient in the face of global challenges and we have ended the year as one of the world’s leading destinations for digital businesses.
“This is good news and reflects our pro-innovation approach to tech regulation, continuing support for start-ups and ambition to boost people’s digital skills.”
The figures under the UK’s growing attraction to international venture capital firms.
This year has seen some of the biggest US tech investors, including General Catalyst, Sequoia Capital and Lightspeed – all of which opened offices in the UK last year – bulk up their presence by taking on more staff.
They have been joined in the UK this year by New Enterprise Associates, the 45-year-old US venture capital firm that has backed the likes of TikTok owner ByteDance and by Earlybird, the Berlin-based venture capital firm.
UK-based funds have raised £9.2bn this year – just ahead of the £9bn they raised in 2021 – with which to back fast-growing companies and start-ups.
Chris Bischoff, managing director at General Catalyst, said: “We established a presence in London as we believe the UK is a stand-out ecosystem globally. Our experience over the last 18 months has enhanced our appreciation for this remarkable ecosystem, enabling us to find and support early stage companies that are working toward accelerating change in their industries.
“As importantly, our values of responsible innovation and radical collaboration are perfectly in tune with the UK’s approach to innovation.”
The Dealroom figures also suggest that tech innovation is being spread across the UK.
There are now eight cities – Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham and Oxford – which are home to two or more unicorns.
Some of these are now seen as challenging the dominance of leading US tech ecosystems in specific disciplines: Cambridge was recently named as the world’s third most important science hub behind only the Bay Area of San Francisco and Boston in Massachusetts. Oxford was fifth on the list.
The University of Cambridge also recently topped the global rankings for producing the highest number of successful tech founders, with more than 500 of its alumni having raised at least $10m in funding.
The universities of Oxford, Bristol, Nottingham and London all featured in the top 20 globally alongside leading US establishments such as Harvard and the Massachusetts Institute of Technology (MIT).
Amid a tight labor market, with more than three million people now working in UK tech, the sector is increasingly taking on people at entry level. The job search engine Adzuna reports that, in November, there were more than 15,000 entry-level tech roles – up from 6,596 in November last year.
This has led to the emergence of a number of so-called ‘edtech’ start-ups dedicated to equipping people with skills, such as coding and cyber security, needed to build a successful career in tech. They include Multiversethe UK’s first edtech unicorn, which was founded by Euan Blair, son of Sir Tony Blair, the former prime minister.
Some of these, such as Code First Girls, are specifically aimed at increasing the number of women working in the tech sector.
Anna Brailsford, the chief executive of Code First Girls, said: “From using AI to tackle healthcare inequality to designing and building space missions, every day there are incredible tech businesses being launched and scaled in the UK.
Yet too few women have the opportunity to work for these impactful start-ups because they have not previously been given the encouragement to look at a career in tech or learn key skills.
“We’re aiming to train 26,000 women in the UK over the next five years and place them in tech roles so they can use their knowledge and expertise to change this industry for the better.”