Innovation

Why Britain has become the top tech hub in Europe

British tech companies have received more venture capital funding than France, Germany, and Sweden combined.

On the cusp of London Tech Week, research has been released showing that, despite Brexit, the UK is the most popular destination for tech financiers.

A study by London & Partners, the official promotional agency for London Mayor Sadiq Khan, found that the UK managed to round up more than 5 billion pounds in venture capital funding, nearly three times as much as any other European nation. Almost 900 million pounds have been raised just this year.

Fears of isolation after the Brexit vote have waned now that research has shown that 80% of all venture capital money invested in the UK since 2016 came from London's tech firms. This should provide ample reassurance to entrepreneurs looking to found a company in Britain, and to established tech firms that may be considering opening a London office.

SEE: IT leader's guide to the rise of smart cities (Tech Pro Research)

France, Germany, and Sweden are all far behind in venture capital funding since 2012, raking in 1.55 billion pounds, 2.15 billion pounds, and 644 million pounds respectively. London itself was the cream of the crop of tech cities, pulling in a total of 4 billion pounds by itself. Paris came in second at 1.14 billion pounds and Berlin was next at 814 million pounds.

In a statement, Khan said London remained open for business despite Brexit and would continue to do everything possible to attract more investment.

"London's tech sector is an important source of jobs and growth for the city's economy and it is vital that we continue to ensure that we can attract the very best talent and investment from all over the world in the aftermath of Brexit," he said, as noted in the report.

The study pointed specifically to the UK's dominance in the fintech sector as the main driver behind much of the investment in the tech industry there. Multiple outlets highlighted the nearly 1.7 billion pounds raised by companies like TransferWise, Monzo, and Revolut.

The UK is also a major player in the fields of cybersecurity, artificial intelligence (AI), and e-commerce.

Investor Sherry Coutu told UK Tech News that much of the funding is due to the future scalability and growth of the UK's newest crop of tech companies.

"From Artificial Intelligence to cyber security, EdTech and GovTech, the UK is home to companies that are leading the way in developing and implementing the latest cutting-edge technologies," Coutu told Tech News. "This year's London Tech Week will shine spotlight on London's mix of thriving start-up and scale-up businesses and a whole range of innovations It's a fantastic opportunity for London to showcase itself to global investors, entrepreneurs and tech leaders from across the world."

The majority of the funding comes from the United States, accounting for more than 3 billion pounds since 2016—more than double that of any other country, the report noted.

"London is the undisputed tech capital of Europe and today's figures offer further proof that London remains a leading global tech hub for investors," Khan said. "With world-class universities and a diverse international talent pool, London is a center for creative energy and innovation."

The big takeaways for tech leaders:
  • The UK has secured 5 billion pounds in venture capital funding since 2016, nearly triple any other European country.
  • 80% of all venture capital money invested in the UK since 2016 came from London's tech firms.

Also see

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Image: iStockphoto/melis82

About Jonathan Greig

Jonathan Greig is a freelance journalist based in New York City. He recently returned to the United States after reporting from South Africa, Jordan, and Cambodia since 2013.

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