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Venture capital (VC) funding of UK-based technology startups rose by 70% in 2015 and totals £6.85bn for the past five years.
A study by London & Partners shows VC funding of UK tech startups reached £2.46bn last year, more than 70% up on 2014.
A large percentage of the investment was in London, where tech companies raised £1.56bn in 2015, accounting for 63% of the UK’s VC total.
London mayor Boris Johnson said this was down to the capital’s diverse talent pool and a well-established financial services sector.
“With a flourishing tech scene and one of the world’s leading financial centres, it is no surprise to see that London’s tech companies are attracting record levels of investment,” Johnson said.
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“Our world-class talent pool and our culture of innovation and entrepreneurial spirit are helping the sector to go from strength to strength.”
Over the past five years, technology startups in London have secured £3.56bn in VC funding, more than half of the UK total.
The financial services startups sector – dubbed fintech – accounted for about 25% of the London-based funding for tech companies in 2015.
The UK fintech sector has been an area of growth for the past few years, and Europe is the fastest-growing region for fintech worldwide.
Read more about fintech
In 2015, members’ organisation Innovate Finance also dubbed the UK fintech sector a hub for diversity because of the number of startups employing women and people from diverse backgrounds.
“Today’s record investment figures offer further proof that the UK’s tech sector continues to mature,” said Eileen Burbidge, technology ambassador for the mayor of London and partner at Passion Capital.
“Investors are increasingly attracted by the diversity of London’s tech ecosystem, but also by our strengths in certain sectors, such as fintech.
“With more investment coming in from overseas and greater access to London-based growth funds, there has arguably never been a better time to start and grow a digital business in London.”
E-commerce startups also made a major contribution to venture capital funding in the UK last year, with companies such as Made.com and Secret Escapes securing millions.
Startup support network Tech London Advocates has predicted that the retail technology industry will be the new fintech sector, producing the next generation of industry-changing startups.