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UK tech boom creating billion-pound company every week

Prime minister Boris Johnson said tech hubs are 'supercharging post-pandemic economy.' Photo: Paul Ellis/Pool via Reuters
Prime minister Boris Johnson said tech hubs are 'supercharging post-pandemic economy.' Photo: Paul Ellis/Pool via Reuters

The UK’s tech sector saw the creation of 20 unicorn companies, private companies worth £1bn ($1.4bn) or more, in the first half of 2021. These include AI company Tractable, motor insurer Zego and shopping app maker Depop.

In comparison, it took the country 24 years to get its first 20 unicorns, the Department for Digital Culture Media and Sport’s Digital Economy Council said on Monday. The industry now has 105 unicorns, more than France and Germany combined.

"Our tech revolution is creating jobs, driving growth and boosting investment across the country," said UK prime minister Boris Johnson .

“We have a number of cities firmly on the map as tech hubs and new companies springing up at a rapid pace - supercharging the post pandemic economy as we build back better."

He said the country "must continue to research, build and innovate as we cement our place as a world leader in tech and push forward towards another record breaking year.”

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The UK’s tech sector raised £13.5bn in the first six months of 2021, almost three times what was raised at this time last year. This influx in cash helped the unicorns secure their sky-high valuations.

The number of ‘futurecorns’ — high-growth companies with the potential to become unicorns — is also growing, with 153 possible candidates in the UK.

Some of the top ones include digital bank Zopa, global kids entertainment company Moonbug, and direct-to-consumer letterbox flowers platform Bloom & Wild.

As revealed by Tech Nation in June, the UK is also home to 12 $10bn tech companies, seven of which were created this year.

More than half of all rounds raised this year have been for $100m or more: fintech company Revolut raised £577m at Series E; Cinch, the car sales platform, raised £1bn; and cybersecurity platform Snyk raised £289m at Series E.

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The tech sector is now on course for a record year of investment as it attracts more venture capital investment than France, Germany and Israel combined during 2021.

Zego, a motor insurer, raises $150m at $1.1bn valuation earlier this year. Photo: Zego
Zego, a motor insurer, raises $150m at a $1.1bn valuation earlier this year. Photo: Zego

The combined value of UK tech companies founded since 2000 is now £428bn and climbing.

The UK’s single largest tech company is currently Revolut, which was valued at £23bn at the time of its recent fundraising.

Fintech continues to dominate the majority of investment rounds with the sector attracting £4.2bn in the first six months of the year.

Fintechs also account for 11 of the 20 companies that became unicorns in the first six months of 2021.

After fintech, the sector that has attracted the most funding so far this year is health tech, with £2.7bn raise, and then enterprise software, with £1.3bn.

The biggest fundraising rounds in Oxford were all related to health: Exscientia, an AI drug discovery company, raised £379m; Oxford Nanopore, which develops genetic sequencing products, raised £195m; and Vaccitech, a biotech company, raised £121m

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"It's been yet another record-breaking year, with new start-ups launching to tackle challenges posed by the pandemic," said digital secretary Nadine Dorries.

"As digital secretary, I’m going to push our pro-tech agenda to even greater heights and make sure every corner of the UK benefits from the tech revolution.”

London is now home to 71 unicorns. After London, the city which has attracted the most in venture capitalist funding so far this year is Oxford, followed by Bristol, Birmingham and Cambridge.

“The UK tech sector is fast maturing and the country now has leadership status alongside Silicon Valley and China," said Nicola Mendelsohn, vice-president EMEA at Facebook (FB) and member of Digital Economy Council.

The data was published as London Tech Week kicks off.

“This year has been like no other, and throughout London Tech Week we look forward to celebrating the fantastic recent achievements of the British tech sector and showcasing London’s credentials as a diverse global tech ecosystem,” said Carolyn Dawson, managing director at Informa Tech.

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