London’s technology sector is looking back on 2017 with fond memories as its revealed firms in the city attracted the most of any European city in funding last year.
The city accounts for around 80 percent of all UK venture capital tech funding in 2017, a total of £2.45bn. This was thanks to deals such as Improbable’s $502m funding round led by SoftBank, as well as investments in Deliveroo and Truphone.
Data compiled for London & Partners by Pitchbook also showed that British tech firms also received more venture capital funding than any other country in Europe. Tech funding in the UK was to the tune of £2.99bn. This is nearly double the amount invested the year in 2016, a total of £1.63bn.
Eileen Burbidge, partner at VC firm Passion Capital, said:
“The UK remains ones of the world’s leading hubs for technology investors and it is no surprise to see that UK tech companies attracted double the amount of venture capital financing than any other European country last year.
London’s tech strengths: fintech and artificial intelligence
Tech funding in London was boosted by two camps: fintech firms and artificial intelligence (AI) startups. In 2017, UK fintech firms attracted £1.34bn in funding, negating any fears that Brexit would stall interest in the sector. Companies such as Funding Circle, Monzo and TransferWise received huge cash injections this year.
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In terms of AI, the big deals in London were for companies such as Babylon Health, which raised £47.65m to kickstart its GP at Hand service. In addition, CallSign raised £29.92m in Series A funding to build its enterprise authentication platform.
“It’s a testament to our exceptional entrepreneurs that the UK tech sector continues to produce companies that are leading in the development of cutting edge technologies such as artificial intelligence and fintech.
“This environment and ecosystem of innovation presents tremendous opportunities for investors and will help to attract global investment into the UK’s digital economy for many years to come.”
What about the rest of Europe?
It’s great that London can pat itself on the back for attracting so much investment. However, it’s also interesting to see how other European cities are competing in tech too.
Paris was the second highest city for tech funding, but it is trailing far behind London. The French capital’s startups raised £564.97m, just a quarter of what London pulled in. Berlin was third, with £456m.
However, these figures are in a pre-Brexit context. The startup community in London, particularly in fintech, is concerned that once Brexit officially occurs in March 2019, it will affect collaboration, the talent that comes to the UK and the movement of data, all major things that have allowed the city’s tech scene to flourish.
That being said, maybe London can shake off the negative concerns over Brexit. Hopefully, the city will continue to dominate the European tech scene post-2019 and beyond.