UK leads Europe in tech scaleup investment
Written by Peter Walker
Last year, the UK attracted five per cent of global high-tech scaleup investment, placing it fourth in the world – ahead of Germany, France and Sweden.
This is according to the latest annual report from Tech Nation, which analysed data from partners including Companies House, Organisation for Economic Co-operation and Development (OECD) GitHub, Pitchbook and Streetbees.
Investment for UK high-growth digital tech firms also grew 61 per cent between 2017 and 2018 – driven in large part by UK tech scaleups, which delivered £5 billion of the £6.3 billion total.
The UK’s strongest tech sub-sector, and where it currently ranks as number one in the world, is FinTech, with investment in UK high-growth financial firms achieving £4.5 billion between 2015 and 2018.
London continues to remain the UK’s leader in attracting high-growth tech investment, receiving £9 billion from 2015 to 2018. Cambridge came second, at £583 million, with other UK cities continuing to make considerable ground, according to Tech Nation.
From December 2018 to February 2019, high growth firms in London grew by over 56 per cent, more than anywhere else in the world.
Looking beyond high-growth tech companies, the last 12 years have seen a much greater distribution of investment across the UK. Notably, the East of England saw the greatest increase in capital invested across all tech companies, at 206 per cent, followed by the West Midlands (54 per cent) and Yorkshire and the Humber (51 per cent).
In 2018, the UK continued to remain a hotbed for tech talent, employing five per cent of all high-growth tech workers globally.
Research and development (R&D) expenditure in the UK in 2016 represented 1.67 per cent of gross domestic product (GDP).
Based on the most recent data from 2016, the UK was ranked seventh globally for R&D expenditure, with spending up £1.4 billion to £33.1 billion, an increase of 4.3 per cent. This is above the long-term annual average increase of 4.1 per cent since 1990.
Prime minister Theresa May called the UK a global tech powerhouse. “I am immensely proud of our country’s ambitious tech scaleups, these companies are delivering significant economic value to the nation through the investment they raise, the jobs they create and the innovative products and services they deliver.”
Chancellor Philip Hammond highlighted the government’s support for British innovation through its £2.5 billion investment in the British Business Bank. “This funding will help high-growth firms to access the finance they need to succeed.”
UK Secretary of State for Digital, Culture, Media and Sport, Jeremy Wright, commented: “This report confirms the UK is one of the world’s leading digital economies, with some of the best minds globally working here and strong investment in the tech sector right across the country. We are working hard to continue this success and remain committed to making Britain the best place to start and grow a digital business.”
Gerard Grech, chief executive of Tech Nation, commented: “This report shows how the UK is a critical hub when it comes to global technology developments, with scaleup tech investment being the highest in Europe, and only surpassed by the US, China and India.
“This scaleup investment was 2.5 times higher than expected based on the relative size of the UK economy and is a testament to the innovation, ambition and tenacity of tech entrepreneurs across the UK.”