British tech start-ups have raised more than £4bn this year, despite the shutdown of the economy, according to a Government report.
Investors ploughed $5.3bn (£4.2bn) into young UK-based tech companies including banking app Revolut, disruptive utility Octopus Energy and microchip developer Graphcore, research for the government’s Digital Economy Council showed.
Revolut, one of a clutch of digital-only challenger banks, accounted for nearly one tenth of all investment in UK tech in the first five months of 2020. The London-based company raised $500m at a valuation of $5.5bn.
Indeed, fintech is the UK’s trump suit, accounting for nearly four fifths of new capital followed by enterprise software developers with a fifth of the funds, according to Dealroom.co and Tech Nation report.
Meanwhile, Australian energy company Origin Energy invested $360m in Octopus Energy, while Graphcore, a microchip developer, attracted $150 million.
And UK venture capitalists have raised $10bn between them for the second year running.
London-based tech start-ups raised more than Paris, Berlin and Tel Aviv combined.
But the $5.3bn is still down from the $5.7bn invested in the first five months of last year.
However, the report pointed that many of these deals had only been agreed in principle before the coronavirus pandemic and warned of the hit British firms were facing.
Around two thirds of the more-than-200 start-ups surveyed said they expected revenues to drop by more than a quarter and half had frozen hiring. Two-fifths of businesses believed they had less than 12 months of funds.
The report warned of the risk that the regional divide when it comes to finding investment would only get wider.
Commenting on the figures, digital secretary Oliver Dowden said the tech sector had “shown resilience in these challenging times and the levels of investment in the year to date have consolidated our Europe-leading position.
“Government will continue to champion and support the sector as it navigates the months to come as we step up our coronavirus recovery plans.”
Dowden added: “We will back entrepreneurs, encourage innovators and help businesses make the most out of the opportunities the digital and tech world provides.”