Investment in the UK tech sector reached £10.1bn ($13.2 billion) in 2019 – a 44% increase on 2018’s very strong figures and the highest level in UK history.
UK companies secured a third of the £30.4bn raised in Europe during 2019, with UK-based tech firms receiving more VC investment than Germany (£5.4bn) and France (£3.4bn) combined.
The rise in UK funding contrasts sharply with both China and the US where tech investment fell last year.
The research, published on Wednesday 15 January 2020, was prepared by Tech Nation and Dealroom for the Government’s Digital Economy Council.
UK tech sector growth outstrips US and China
Digital Secretary Nicky Morgan said: “These brilliant new numbers demonstrate the strength of the UK tech industry and how it is a sweet spot of our economy.
“Our tech companies are not only commanding the confidence of global investors but they are also creating new jobs and wealth across the country.
“It’s absolutely vital we maintain this impressive success and in Government we are working tirelessly to make sure the conditions are right.”
On a city-level, London joins the Bay Area, Beijing and New York at the top of the world’s most-funded locations.
Almost half of the UK investments (£4.6bn) in 2019 came via US and Asian investors, suggesting that Brexit is not a concern for them.
Tech success across the regions
Since 1990, Manchester, Oxford, Cambridge, Edinburgh and Bristol have produced a combined total of 20 unicorns, i.e privately funded start-ups valued at more than $1b.
Of the latest unicorns to join the list, OVO Energy adds to Bristol’s tally while Cambridge-based CMR Surgical pushes Oxbridge’s combined total to 11. Two unicorns are based in Leeds: Sky Betting & Gaming and TransUnion UK.
Six UK cities rank amongst the top 26 cities in the world for raising venture capital in 2019, these are London (4th), Cambridge (12th), Bristol, Oxford, Manchester and Edinburgh.
Richard Barlow, CEO of wejo, said: “The digital tech sector is thriving in Manchester and the North West, attracting a growing talent pool to the region. It’s vital that we continue to invest in the skills base and infrastructure here in the North West so that wejo, and other successful companies, can continue to grow and compete on a global scale.”
UK leads the way in fintech, AI and clean energy
Foreign investors are impressed by UK’s best performing sectors – fintech, AI and deep tech, and clean energy.
In the fintech sector there were significant investments raised by newly established unicorn Checkout.com as well as for World Remit, Monzo Bank and Starling Bank.
In AI and deep tech, investments in Benevolent AI ($90m), Melody ($60m) and Wayve ($20m) helped push the investment total across these sectors to £2.5bn.
While clean energy is a smaller market, OVO Energy’s $260m deal, alongside $81m investments in photovoltaic and solar panel firm Oxford PV and BBOXX, similarly helped push 2019’s total investment in this sector to just short of $1bn for the first time.
Julia Hawkins, partner, LocalGlobe said: “Ambitious entrepreneurs no longer have to leave these islands and head to the US to build the company of their dreams.
The UK’s commitment to science, research and deep tech has made huge strides in 2019 and we’re excited about the benefits that are still to come, as we develop global authority in the fields of artificial intelligence and deep tech.”