There has never been a better time to invest in European tech, particularly the UK’s capital city – London. According to the latest research from Dealroom.co, and London & Partners, tech companies based out of London helped Europe reach record levels of tech VC funding in 2020.
More investment than any European city
The data shows that the UK capital received more tech VC investment than any other European city in 2020.
Despite the UK’s exit from the European Union and the global pandemic, London tech firms raised $10.5B (approx €8.6B) in 2020, which is significantly more than the total amount raised in 2017 (€5.7B) and 2018 (€4.8B) and close to the record in 2019 (€8.8B).
Second-fastest-growing global tech hub
Notably, London tech companies are receiving over three times the amount of investment than any other European tech city. On the global front, London’s tech scene remains competitive as it’s the second-fastest-growing global tech hub since 2016 and ranked 5th on the worldwide list for VC tech investment over the past five years.
The future looks bright as well as London based VC firms have unprecedented levels of fresh capital to deploy in 2021.
Record year for VCs
The finding also reveals that the European tech companies raised $43.1B (approx €35.5B) in 2020 from VC. Notably, London was at the heart of this growth, with its tech firms accounting for a quarter of all European tech funding. Moreover, the global tech VC investment was also resilient in 2020, with the data showing $272.3B (approx €224B) was invested in tech firms worldwide in 2020.
The report also throws light on London-based tech companies raising a record $15 billion in 2020 from VCs. Some of the largest deals involving London companies included:
- Revolut: $500M (approx €412B) Series D funding
- Arrival: a $400M (approx €330B) funding rounds
- Octopus Energy: $527M (approx €434B) funding.
Home to 1,252 VC firms
Furthermore, London VC firms raised $7.8B (€6.4B) in new funds in 2020, on top of the $4B (€3.2B) raised in 2019 – accounting for a third of all new European VC funds over the past two years. It’s worth mentioning that London is now home to 1,252 VC firms – more than any other European city, says the report.
Global investment firms including Index Ventures (€1.6B funds) and Atomico ((€684M funds) have also announced new funds for European startups based in London in 2020. Also, Silicon Valley-based VC Sequoia Capital has expanded its footprint in the UK capital.
Mayor of London, Sadiq Khan commented, “London is the global tech capital of Europe. Despite the challenges brought about by Brexit and the coronavirus pandemic, London’s tech sector continued to thrive in 2020 and has an important role to play in the city’s economic recovery. London is already home to some of the world’s best technology companies and will remain open to international investment and tech talent from all over the world.”
81 potential future unicorns
As per Dealroom.co, London is producing some of the world’s fastest-growing tech companies. It also says London is home to 81 potential future unicorns, which is double the amount of Paris (42) and Berlin (32). At present, London has 43 unicorn companies – more than Paris (11), Berlin (11), and Amsterdam (9) combined.
As the competition for fintech heats up, London fintech companies raised $4.3B (€3.5B) – almost half of all European fintech investment. In the enterprise software technology sector, London saw an 82% increase, raising a total of $1.9bn. Since 2016, London’s health tech firms have raised a total of $3.2B (€2.6B) – more than any European city.
Greg Jackson, CEO and Founder, London-based energy tech unicorn Octopus Energy said: “We deliberately set up our headquarters in London – Europe’s tech hub – because it gives us access to like-minded tech innovators and world-class talent.”
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