Investment in the UK’s tech sector jumped 44% to a record high of $13.2 billion in 2019, comprising a third of all funding in Europe. 

It also surpassed the total in France and Germany combined, said the British government’s Digital Economy Council on Wednesday. 

The UK was third only behind the United States and China in terms of venture capital funding, experiencing robust growth while its two main competitors witnessed harsh declines, according to research compiled by Tech Nation and Dealroom.co.

In terms of cities, the capital of London was in line with San Francisco’s Bay Area, Beijing and New York as the world’s most funded locations, the report said.

Digital Minister Matt Warman said it was “fantastic to see Britain continues to be the best place in Europe to start and grow a tech business, with record-breaking investment and the creation of eight new billion-dollar companies last year.”

He noted that although the UK was in a strong place, it could not let itself be satisfied and had to make sure that government policy supported the sector. 

“On access to talent, we will have a different immigration policy over the coming years and that will be an important opportunity for us to show that Britain is still very much the right place to start or grow a tech business,” he said in an interview.

The Conservatives are planning to roll out an “Australian-style” points-based immigration system, and have vowed to lower immigration numbers, particularly among those who are less skilled. 

As per the new system, which will regard both EU and non-EU citizens in the same way, the majority of immigrants will require a job offer to travel to the UK, but there will be exceptional visa schemes for those who are front-runners in the fields of science and technology, or who will replace shortages in the public services sector.

Britain was looking to hit the exact balance between regulating the ever-growing tech sector, for example in establishing policies to make the internet the safest possible, while also maintaining a pro-investment stance, Warman said. 

Research revealed that firms with headquarters in London raised $9.7 billion of the total, while the amount of money invested in early-stage companies hiked to $5.1 billion in 2019, up from $4 billion the year prior. 

Tech investor and co-founder of venture capital firm LocalGlobal Saul Klein, said that the success in the UK had been accumulating for the past 20 years, beginning with the arrival of U.S. businesses which had shaped an ecosystem which helped home-grown firms grow.

“When you look at the number of $1 billion companies - AKA ‘unicorns’ in Silicon Valley tech talk - London has 46 unicorns, Berlin has 12, Paris has 11,” he said. A unicorn is defined as a privately-owned start-up company valued at over than $1 billion.

“In the last 10 years, Britain has consolidated its position through a combination of capital, talent and building these $1 billion companies.”

The eight UK firms to claim unicorn status in 2019 were: Rapyd, CMR Surgical, Babylon Health, Sumup, Trainline, Acuris, Checkout.com and OVO Energy, raising the total established in Britain to 77, twice the total in Germany and almost four times the total in Israel, the report revealed. 

 

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