Investment in UK technology accounted for more than one third of the £76bn invested in European tech this year.
This year £26bn was invested in UK tech, up 2.3x from last year’s figures of £11.5bn – 35 per cent of all the money invested in tech across Europe, according to the Government’s Digital Economy Council.
The £26bn raised by UK start-ups and scale-ups was nearly double the figure raised in Germany (£13.5bn) and is more than three times that raised by France companies (£8.6bn), said Dealroom, which compiled the figures.
Twenty-nine new unicorns (companies valued at $1bn plus) were created this year in Britian, including e-commerce platform Depop, car selling platform Motorway, and challenger bank Starling Bank. This takes the UK’s total unicorn figure to 116, which means a quarter of the UK’s unicorns were created in 2021 alone.
The UK has more unicorns than France (31) and Germany (56) combined.
The majority of the money coming into UK tech is from the US, with 38.2 per cent of all funding coming from the States, primarily into fintech and healthtec companies, compared with 28 per cent of venture funding coming from the UK. US venture funds that launched offices in the UK included General Catalyst, Lightspeed Ventures and Silicon Valley fund Sequoia.
That said, UK venture capital had a record year, raising £7bn with record-breaking fundraisings for Index Ventures, Balderton Capital, 83North and Eight Road Ventures.
Data from Dealroom and jobs site Adzuna also estimated that Cambridge was the strongest city of technology investment outside of London, followed by Manchester.
Digital minister Chris Philp told the Daily Telegraph that there was now a need for longer term British investors, such as pension fund managers, to consider investing in earlier stage companies or in venture capital funds.
Mr Philp told the newspaper: “Pension funds are hugely under allocated to pre-IPO tech. There is a massive opportunity there for UK pension funds to invest in UK venture capital.”
Further reading on tech investment