Come what may, investment in the UK’s tech businesses will continue
With London Tech Week drawing to a close, Russ Shaw offers his take on why the future for tech companies, inside and outside the capital, looks bright...
It’s no secret that London’s tech and digital industry has attracted record levels of capital in recent years.
This investment has powered growth in sector, driving progress and ultimately allowing sector-wide celebrations, like London Tech Week, to take place.
So – how does the future look for London’s tech investment ecosystem? In short, very bright.
Investment in the capital’s tech businesses will carry on, despite Brexit and election uncertainties
Last year, tech accounted for 72% of venture capital and equity funding in the UK, or £9.2bn according to Tech Nation 2017 report by Tech City UK.
In 2017, this trend is set to continue, with analysts expecting tech investment to rise despite uncertainty created by the general election and the Brexit EU negotiation process.
Events like the Tech London Advocates Investor Showcase, which brought 60 start-ups and 800 tech leaders to Here East where TLA launched London’s Tech Investment Showcase Report have helped to increase the visibility of entrepreneurs, matching exciting start-ups with growth capital.
The rise and rise of UK tech unicorns
What’s more, London has proved itself as a destination to scale, with the UK capital home to more tech unicorns (companies valued at a minimum of $1bn or more) than any other country in Europe. Despite high profile implosions from the likes of Ve Interactive and Powa Technologies, last year was another breakthrough year for UK, and European, fast-growth tech businesses.
According to figures from tech investment bank GP Bullhound, UK and European unicorns have started to outperform their American counterparts. Europe’s billion-dollar companies actually generated an average of $315m in revenue in 2016, $186m more than their US counterparts, driven by the growth of London’s fast-growth tech firms.
The growth of London’s unicorns has underlined the value of international cooperation and collaboration, with firms attracting capital from across the globe in their quest to scale into the tech titans of tomorrow.
The growth of foreign direct investment from Asia in particular has helped the city’s tech companies grow, with London Tech Week events like Cocoon Networks’ China-UK Hi Tech Festival, Invest Hong Kong’s Asia Tech Super Connector, and Kabeela’s UK-India Tech Summit showing important tools for underwriting engagement and ‘building bridges’ between international ecosystems.
The future looks promising for London and UK tech investment.
Providing that we continue to take the same optimistic yet pragmatic approach that has precipitated the sector’s growth, there is no reason to anticipate a slowdown in the industry’s ability to attract investment for the rest of 2017 and beyond.
Tech London Advocates founder Russ Shaw is blogging for Startups.co.uk throughout London Tech Week 2017. Catch up with his recent blogs on why London businesses need to address the elephant in the room, why London really is open for business, and the next big tech trends to hit the UK.