Venture capital investments in UK-based tech startups reached record levels in 2019, netting firms a combined £10.1bn.
The investments represent a 44% increase from 2018 and sees the UK make gains on the US and China, which have long attracted the lion’s share of funding.
That’s according to research conducted by Dealrom and Tech Nation for the British government’s Digital Economy Council.
Only San Francisco, Beijing and New York surpass London as the hottest city for attracting investment in tech startups.
Last year also saw the creation of eight new unicorns – privately held startups valued at over $1bn – in the UK in 2019.
This is twice as many as Germany and three times more than France. UK firms that reached unicorn status in 2019 include Deliveroo, OakNorth, Ovo Energy and Babylon.
Fintech, AI and clean energy startups scooped the biggest portions of venture capital investments.
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Early-stage investment grew by 20%, with £3.9bn going to UK startups. And £4.1bn was pumped into investment rounds exceeding $100m, double the amount in 2018.
Digital Minister Matt Warman attributed the strong investment figures to the UK’s “business-friendly environment, talented workforce and longstanding reputation for innovation”.
The record investment figures suggest that tech investors have not been put off by Brexit uncertainty.
“The UK continues to flex its muscles by attracting record investment. Perhaps even more telling is the rate of growth in VC activity, not only faster than European counterparts but also the US and Asia.
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“The data signals that we are going from strength to strength in nurturing the entrepreneurial talent and the potential of industry disruptors, but we are only scratching the surface of the UK’s innovation potential.
Tom Blomfield, co-founder and CEO of fintech startup Monzo said:
“It’s great to see that the UK tech sector is leading the way globally, with investors continuing to demonstrate strong confidence in UK-bred businesses and the fintech sector here. This is the result of a unique ecosystem of talented people, ambitious innovation and a progressive regulatory framework.”