The £20bn figure marks a new record for venture capital being invested in British start-ups after a strong third quarter.
UK technology start-ups have already raised one third more than they did throughout the whole of 2020 and are on track to double 2018’s £11.7bn total, according to Beauhurst.
However, although total fundraising has had a record year, the volume of deals is lower, as investors place larger bets on fewer companies, such as virtual events company Hopin, which raised £611m from investors; Revolut, which closed a £578m round; and robot surgery firm CMR Surgical, which raised £432m.
Fintech companies have been among the most successful fundraisers in 2021, taking in £5.3bn – more than a quarter of the total raised by British start-ups.
Artificial intelligence businesses have raised £2.3bn, followed by challenger banks, cybersecurity and cryptocurrency companies.
London-based start-ups have accounted for more than half the money raised this year (£12.6bn), followed by the South East and the East of England.
The third quarter of the year was the biggest to date, with £6.8bn raised – up from £3.6bn in the same period a year ago as investors played safe while Covid was at its peak.
However, the total number of deals in the last three months was down, from 1,424 in the same period last year to 1,246.
Britain is creating unicorns, companies valued in excess of $1bn, almost at the rate of one a week, according to Government research.
Twenty new unicorns were minted in the first half of this year alone – including Tractable, Zego and Depop – and the UK receives more venture capital than France, Germany and Israel combined.