The UK created eight unicorns in 2019 – companies worth more than one billion US dollars – as investment into the tech sector hit new record highs, research has found.
Investment in UK tech hit 13.2 billion dollars (£10.1 billion) last year, with the speed of growth faster than both the US and China, and outstripping fundraisers in France and Germany.
This was up £3.1 billion on the same data for 2018, with UK companies winning a third of the £30.4 billion raised during the year in Europe, according to research from the Government’s Digital Economy Council.
The research by Tech Nation and Dealroom.co also found that venture capital (VC) investors – which invest at some of the earliest stages in a company’s life – increased 44% as investors hope to uncover the next Deliveroo or Monzo.
Eight new unicorns were created in 2019, including – Rapyd, CMR Surgical, Babylon Health, Sumup, Trainline, Acuris, Checkout.com and OVO Energy – meaning the UK has now created 77 billion dollar businesses, double the total number in Germany at 34 and almost four times as many as Israel at 20.
Digital Secretary Nicky Morgan said: “Our tech companies are not only commanding the confidence of global investors but they are also creating new jobs and wealth across the country.
“It’s absolutely vital we maintain this impressive success and in Government we are working tirelessly to make sure the conditions are right.”
VCs were particularly engaged with the sector, with investment increasing more than 40% for the third year in a row.
By comparison, investments in France grew by a little over a third compared to 2018, while Israel’s investments rose by a fifth.
On a global scale, the UK’s performance in 2019 means it now sits behind only the US and China in terms of total venture capital funding received in the year.
On a city-level, London joins the Bay Area, Beijing and New York at the top of the world’s most-funded locations, with companies headquartered in London raising £7.4 billion during 2019.
The Mayor of London, Sadiq Khan said: “Our city is the undisputed tech capital of Europe and the record 9.7 billion dollar investment in this sector clearly shows London open to talent and investment from all over the world.
“London’s successful digital economy is not only an important source of jobs for Londoners but is also bringing prosperity and growth to the rest of the UK.”
But there was also money pouring into regions, with Cambridge, Bristol, Oxford, Manchester and Edinburgh all ranked as top investment locations – with almost half of all UK investments in the tech sector coming from US and Asian investors.
David Richards, founder and chief executive at WANdisco, based in San Francisco and Sheffield, said: “With 2019’s new unicorn businesses being based in tech hubs like Bristol, Oxford, Cambridge and Leeds – It’s positive to see that tech sector growth is creating highly skilled and well paid jobs right across the UK.”
Next year, investors and analysts are hoping for an equally successful year in UK tech, with investment expected to focus particularly on green technology.
Suranga Chandratillake, general partner, at venture capital investor Balderton Capital said: “In 2020, we think particular sectors will continue to outperform in terms of attracting capital including fintech and AI. To make sure the UK tech sector continues to meet high expectations, we need to make sure it is properly representative of all parts of society and work continuously to ensure no one is excluded from the opportunities the sector can provide.”