UK tech investment in fine health, fintechs flourishing

Despite growing scrutiny over the strength of its economy, the UK remains a safe bet for venture capital 

A new report from trade organisation Tech Nation shows the UK is outperforming other European countries in terms of tech investment.

Fintechs are the standout performers, attracting £4.5bn of funds between 2015 and 2018 – establishing the UK as the global leader in fintech investment.

Eileen Burbidge, partner, Passion Capital & chair of Tech Nation commented:

“The UK has an incredibly pivotal role in the global tech scene.”

“Nowhere is this more evident than in the frintech sector where the UK is ranked number one in the world; an enviable position that has been established with decades of hard work, entrepreneurial talent, innovation and supportive policymakers.”

High flyers

Last year, the UK attracted five percent of global high-growth scaleup investment, ranking fourth in the world ahead of Germany, France and Sweden, and trailing only the US, China and India.

A high-growth scaleup describes a business with ten or more employees and an average annualised growth greater than 20 percent per annum over a three-year period.

In total, £6.3bn was invested in the UK tech sector, 80 percent of which came from investment into high-value scaleup firms.

“This is a testament to the innovation, ambition and tenacity of tech entrepreneurs across the UK,” said Gerard Grech, CEO of Tech Nation.

“These valuable findings will help inform how the UK as a nation can continue to foster competition and collaboration in an increasingly interconnected world.”

Employment

Despite concerns that the UK will fail to attract top talent once it withdraws from the European Union as is expected, the report shows that the tech sector continues to attract skilled employment.

Five percent of all high-growth tech workers globally are employed in the UK, with insurtech and fintech firms responsible for the highest proportion of employees, employing 24 percent and 18 percent respectively.

UK Secretary of State for Digital, Culture, Media and Sport, Jeremy Wright, commented:

“This report confirms the UK is one of the world’s leading digital economies, with some of the best minds globally working here and strong investment in the tech sector right across the country.”

“We are working hard to continue this success and remain committed to making Britain the best place to start and grow a digital business.”

London remains the lightning rod

London continues to dwarf other UK cities in attracting high-growth tech investment, receiving £9bn from 2015 to 2018.  Second-placed Cambridge received £583m – a drop in the ocean compared to the capital.

UK cities are nevertheless continuing to make considerable ground, the report says. The East of England has seen the greatest increase in capital invested across all tech companies, at 206 percent, followed by the West Midlands (54 percent) and Yorkshire and the Humber (51 percent). Despite this growth it’s no exaggeration to say that, for the rest of the UK, London is still a dot on the horizon.

Prime Minister Theresa May said she is “immensely proud” of UK tech startups:

“These companies are delivering significant economic value to the nation through the investment they raise, the jobs they create and the innovative products and services they deliver.”