Investment in the UK tech sector reached £10.1bn ($13.2 billion) in 2019 – a 44% increase, the highest in the history of the UK, on 2018.
Compare this to Germany which received £5.4bn and France which received £3.4bn. In fact, UK companies accounted for a third of all the money raised by tech firms in Europe throughout 2019.
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 higher than 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 is now among the world’s most-funded places, alongside cities such as Beijing and New York.
Brexit doesn’t appear to be having much impact either. US and Asian investors accounted for almost 50% of the money at £4.6bn.
Tech success across the regions
Over the past 30 years, 20 privately funded startups have been valued at more than $1bn (giving them the ‘Unicorn’ tag) from UK cities such as Manchester, Oxford, Cambridge, and Bristol.
There are also two so-called ‘unicorns’ in Leeds (Sky Betting & Gaming and TransUnion UK), while Cambridge boasts an impressive 11, including CMR Surgical. OVO Energy is the latest one to be added to the list in Bristol.
It’s not just the UK that these cities rank highly. London is now ranked as the 4th highest in the world in terms of rasing venture capital during 2019. Cambridge just missed out on the top 10 at number 12 while Bristol, Oxford, Manchester and Edinburgh all made the top 26.
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 some sectors
Foreign investors are impressed by UK’s best performing sectors which includes the likes of fintech (financial technology), AI (Artificial Intelligence) and deep tech, and clean energy.
In the fintech sector, newly established unicorns such as Checkout.com, Monzo Bank and Starling Bank all saw significant cash raises being injected.
AI and deept tech reached an impressive £2.5bn investment across the sectors. That amount includes $90m invested in Benevolent AI, $60m in Melody, and $20m in Wayve.
When it comes to clean enegery, there were some massive deals being made, despite it being a small market. For example, OVO Energy secured a $260m deal. A further $81m was invested in Oxford PV and BBOXX, a photovoltaic and solar panel firm. In total, that brings the amount of investment in the sector during 2019 just short of $1bn, a new record.
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.”