The United Kingdom is unrivalled in Europe for the creation of $1bn tech startups, otherwise known as unicorns.
According to research conducted by venture capital analytics company Dealroom.co for the UK government’s Digital Economic Council, the UK accounts for 35% of all unicorns created across the continent. The UK has produced 60 of the 168 unicorns currently spread across Europe.
The vast majority of those companies can be found in London. The capital is home to 36 unicorns, of 21% of the continent’s total, having produced $132bn in tech startups.
Sadiq Khan, Mayor of London, said:
“London’s tech sector is envied across the world, so it is good to see evidence of how it is producing so many fast-growing new businesses.
“However, we also recognise how important it is that the capital collaborates with other cities in the UK, which are building similarly strong tech communities. When London succeeds, the whole country benefits.”
UK-wide tech success
Research is beginning to show evidence of these developing tech communities outside of London. According to the study, having produced five $1bn tech companies, Manchester is now on-par with both Amsterdam and Paris. The Northern city is particularly strong on ecommerce, with online retailers Boohoo, AO.com and The Hut Group all calling Manchester home.
Edinburgh, Leeds, Oxford and Cambridge have all produced at least two unicorns each. Oxford and Cambridge are particularly promising hotbeds for UK tech talent. Buoyed by world-leading university institutions, the two cities have produced nine unicorns between them, putting them ahead of Amsterdam, Paris and Berlin.
Oxford is home to Oxford Nanopore, a mobile DNA sequencer no bigger than a USB stick, which was initially created at the Oxford Internet Institute.
Professor Helen Margetts, Director of the Oxford Internet Institute, said:
“Oxford’s tech sector is thriving, helped by the unicorns that are based in the city and nearby, and we hope to see many more exciting tech companies choose to stay and build their businesses here in the future, helped by access to the rich seam of talent in the university,”
Likewise, Cambridge created Darktrace, a leading artificial intelligence cyber defence provider. ARM Holdings, purchased by Japanese conglomerate SoftBank for £23.4bn in 2016, was also founded in the city.
“Darktrace is headquartered in Cambridge and home to our R&D [research and development] team. This has given us access to the best and brightest minds in artificial intelligence, allowing us to build a global company that soared to a valuation of $1.65bn in just five years and is the world-leader in cyber AI,” Darktrace CEO Poppy Gustafsson said.
More to come
While places like Germany, France and Israel continue to produce, the UK has little competition to worry about.
The study recognised 54 UK tech startups worth between $250m and $1bn with the potential to become unicorns. In total, these companies have a combined value of $18.6bn.
In comparison, Germany, the UK’s closest competitor, has 28 potential unicorns worth a combined value of $8.8bn. Israel places third with 25 companies worth $8.14bn, with France rounding up the top four. France has more potential unicorns than Israel with 27, but these companies are worth $7.7bn combined.
Jeremy Wright, Secretary of State for Digital, Culture, Media and Sport, said:
“The UK’s track record in creating fast-growing tech companies is second to none in Europe.
“These new statistics show Manchester and Edinburgh are now competing on a global scale and stellar tech firms are growing right across the country, spreading new jobs and investment. Through our Digital and Industrial Strategies, we are creating the conditions to start up and grow brilliant tech ideas into world-beating global businesses and pushing the boundaries of science to change people’s lives for the better.”