The UK tech sector now has a combined market value of $1 trillion, the first time any country apart from the US and China has crossed this threshold.
The UK continues to hold the European crown for funding fast-growth technology businesses, raising a near-record level of investment this year of £24bn.
The total was far ahead of France, ranked second, which raised £11.8bn, and Germany, ranked third, which raised £9.1bn.
Almost half of funds raised in the UK last year, £10bn, went to financial technology (fintech) companies, while £1.7bn was raised for energy and almost £1bn for transport.
The UK also has more high-growth technology companies than European peers, having created 144 unicorns and 237 futurecorns – fast-growing companies predicted to be the most valuable businesses in the next few years – as part of a cohort of almost 400 high-growth start-ups worth more than $250m in value which have launched in the UK since 2000.
The Government figures for UK tech sector investment mirror research from venture capital firm Atomico, which pointed out that more than $400bn in market value has been been wiped from the wider European tech ecosystem this year.
Overall, the market value of European technology companies, including the UK, fell by $400bn in 2022, from $3.1tr to $2.7tr.
And investment in technology businesses is slowing down as fears about the economy grow including rampant inflation and industrial unrest make backers more wary. Companies are finding it more difficult to raise finance.
Ekaterina Almasque, general partner at early-stage VC firm OpenOcean, warned that recessionary headwinds mean investors are more closely scrutinising start-up credentials. Founders must be able to demonstrate their company is on a clear trajectory to growth and profitability.
“Capital inefficient growth with vision not addressing real challenges is not good enough anymore to win over investors,” she said.