UK tech sector leads global growth in 2019

The UK’s technology sector secured one-third of all European tech investments in 2019 to hit a record high of $13.2bn, according to latest industry figures.

Venture capital investment in the UK’s tech sector leapt by 44%, achieving a $4.1bn increase on the 2018 figures.

This is the third year in a row that growth in the UK’s venture capital investment has exceeded 40%. In contrast, investments in France grew by just over one-third, while Israel’s rose by one-fifth.

The US and China, on the other hand, saw investments plummet by 20% and 65%, respectively, leaving the UK third in the world in terms of total venture capital finding.

The figures were prepared for the Digital Economy Council by entrepreneurial network Tech Nation and research company Dealroom.co.

“This roaring success is testament to our business-friendly environment, talented workforce and long-standing reputation for innovation,” said digital minister Matt Warman.

“As we head into a new decade, we want to keep up this momentum, ensuring the tech sector flourishes right across the country, helping more entrepreneurs to turn their ideas into business successes and strengthening the nation’s digital skills.”

Eight new billion-dollar companies, or unicorns, were created in the UK in 2019, bringing the country’s total to 77. The new unicorns are Rapyd, CMR Surgical, Babylon Health, Sumup, Trainline, Acuris, Checkout.com and OVO Energy.

Since 2014, the UK has produced more than twice the total number of billion-dollar tech companies than any other European country, with only the US and China outpacing it when it comes to building fast-growth firms.

But the investment in more mature companies was accompanied by increased investment in early-stage firms, too, which secured a total of $5.1bn in 2019.

Most of the investment, to both mature and early-stage companies, was directed to areas in which the UK tech sector specialises, including financial technology (fintech), artificial intelligence (AI) and clean energy.

AI and deep tech companies, for example, received $3.2bn in 2019, while the smaller clean energy market’s investment was just short of $1bn for the first time, marking a 45% increase on the 2018 figures.

“UK tech businesses are now well poised to forge new international partnerships and global ventures, enhancing tech growth across borders,” said Tech Nation chief executive Gerard Grech. He added that the geographical spread of the investments “augurs well for national GDP growth and a truly connected Britain”.

While London remains the UK’s leading destination for venture capital, having produced 46 of the UK’s 77 unicorns, Manchester, Oxford, Cambridge, Edinburgh and Bristol have produced 20 between them.

Previous figures released by Tech Nation and Dealroom.co in August 2018 had shown that the UK was on track for this record year, thanks to a surge in foreign investment, mostly from US and Asian investors.

More than half of the $6.7bn raised in 2019 up to that point had come from these investors, and the final figure now stands at $6bn out of $13.2bn.

Natalie Black, HM trade commissioner for Asia Pacific, said: “Asian investors are taking a keen interest in the success of the UK’s tech sector and are enthused by our record of building unicorns and leadership in key sectors like AI and clean tech.

“The government is supporting more and more tech companies across the UK who are looking to expand in Asia and I have seen first-hand a step-change in collaboration and investment in this part of the world, which is bringing exciting opportunities at home and overseas.”