2021 another record year for UK cyber investment

The UK cyber security industry saw another record year for sales, investment and job creation in 2021, with all three metrics up substantially on previous years, according to statistics from the Department for Digital, Culture, Media and Sport (DCMS), published today.

The department’s Annual Cyber Sector Report – which tracks the growth and performance of the security industry – revealed that cyber firms contributed £5.3bn to the UK economy in 2021, up 33% on 2020 and the largest jump since DCMS started tracking the sector in 2018.

There are approximately 1,840 active security firms in the country, with over 50% of them now based outside London and the South East. Between them, they are now thought to employ 52,700 people, up 6,000 on the prior period.

In the past 12 months, these firms generated £10.1bn in revenue, up 14% on the previous financial year, and attracted over £1bn in external investment across 84 deals. Some of the more notable funding rounds include a £53.5m funding injection for Immersive Labs, a Bristol-based security workforce optimisation specialist, and £52m for Tessian, a London-based email security services supplier.

“Cyber security firms are major contributors to the UK’s incredible tech success story. Hundreds of British firms from Edinburgh to Bristol are developing and selling cutting-edge cyber tools around the world that make it safer for people to live and work online,” said digital secretary Nadine Dorries.

“We are investing in skills training and business initiatives to help the UK go from strength to strength as a global cyber power and open up the sector to people from all walks of life.”

DCMS said the UK had clearly established itself as a world leader in areas such as network security technology, threat monitoring and professional services, and more than 300 UK-based security firms now have a presence abroad, mostly in the US and Europe. Foreign-headquartered security companies also continue to be attracted to the UK market, with US-based firms representing 10% of UK-based cyber companies.

Many of these companies have been supported by government-backed schemes provided through multiple avenues, including the National Cyber Security Centre’s (NCSC’s) programmes for startups and bursaries, and innovation hubs such as Plexal.

Lorna Armitage is co-founder of security training firm Capslock, one of many break-out UK security scaleups that have benefited from increased government support through programmes such as Plexal’s Cyber Runway.

“The support of Plexal and government-funded programmes like Cyber Runway has enabled Capslock to accelerate our growth from a young startup in 2020 to the ‘most innovative cyber security SME of 2021’, as named by DCMS,” she said.

“Our relationship with Plexal has [also] given us a great platform to talk about our commitment to promoting equality and diversity in the cyber security industry. For example, we spoke to fellow Cyber Runway members about the challenges faced by female co-founders and women in cyber.”