More than 950 UK tech companies have raised a combined £12.4bn in the first five months of 2022, making the UK the second-largest country globally for tech investment behind only the US. The UK tech firms raised a record £9bn in the first quarter of the year, up from the £6.3bn raised in the first quarter of 2021. Despite a modest slowdown in UK investment over the last two months, the overall total so far this year has already surpassed the £12bn raised in the whole of 2020.
UK tech firms have raised a record-breaking £9bn in the first quarter of 2022, surpassing the amount raised in the same period last year. The UK has overtaken India and China for tech investment, behind only the US globally. This data was gathered by Dealroom and analysed for the UK’s Digital Economy Council ahead of London Tech Week. Fintech continues to be the UK’s most dominant tech sector, with startups bringing in half – £6.2bn – of the country’s VC funding this year.
Investors globally are taking a more cautious approach than last year amid rising interest rates and economic uncertainty caused by Russia’s invasion of Ukraine. Startups that have previously raised money at high valuations are now raising at lower valuations – or struggling to raise capital at all. While there has been a modest slowdown in UK investment over the last two months, US investors have already poured more capital (£6.1bn) into UK tech companies than they did for the whole of 2021 (£6bn).
London is the leading tech hub in Europe, with tech firms based in the capital raising £8.6bn so far this year – double the £3.9bn raised by Paris-based firms and more than four times more than those located in Berlin. The UK is home to 122 unicorns and 248 companies identified as futurecorns. Fintech continues to be the UK’s most dominant tech sector. However, growth has continued outside of London, with Cambridge, Oxford and Abingdon among the top 20 European futurecorn hubs.
According to Yoram Wijngaarde, founder and CEO at Dealroom, despite the wider global challenges that have led to a slowdown in public markets, private tech investment in the UK is continuing to grow. Transformative ideas come out of challenging situations, and the next generation of tech startups will be even bigger and more transformative than the last.
