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UK unicorn creation goes unrivalled in Europe

The UK's regional cities are creating more billion-dollar tech startups than many European capitals, with the UK as a whole creating more unicorns since 2016 than France, Germany, Sweden and the Netherlands

The UK is producing more billion-dollar tech startups than any other European country, with many regional cities competing head-to-head with the continent’s biggest capitals.

Europe and Israel together have created a total of 169 so-called unicorns, 35% of which are from the UK, according to research prepared for Tech Nation and the government’s Digital Economy Council (DEC) by venture capital analytics firm Dealroom.co.

The figures show that London is still the centre of the UK’s tech startup sector, having produced 36 of the UK’s 60 unicorns, meaning 21% of the continent’s fastest-growing unicorns are in London.

These London startups are collectively worth $132bn.

“The fact that the UK has had a digital ecosystem for much longer is a key reason why the country has jumped so far ahead of its European neighbours,” said Eileen Burbidge, chair of Tech Nation.

“A huge part of that is the talent population and an ability to attract that talent. Access to capital, too – the City of London is the financial centre of the world – and government and policy-maker support. That’s why we have had an ecosystem for much longer historically,” she said.

Oxford and Cambridge, home to companies such as Oxford Nanopore and Darktrace, have also become major technology hubs, having produced nine unicorns between them. In comparison, the French and German capitals, Paris and Berlin, have created five and eight respectively.

“For years, investors have put money into spinouts coming out of Oxford University’s world-leading research and labs,” said Riwa Harfoush, head of network intelligence at Oxford Sciences Innovation.

“The difference now is that there is real momentum behind the growth of the tech sector in the city and strong relationships between Oxford, global investors, industry leaders, policy-makers and entrepreneurs. The growth of this ecosystem means we can support UK companies on their journey towards becoming world-beating companies in a meaningful way,” said Harfoush.

In the North of England too, Manchester’s cluster of e-commerce retail businesses has produced as many unicorns as the Dutch capital, Amsterdam.

Burbidge played down the impact of Brexit on UK startups, despite fears that investment could be diverted towards the continent.

“I certainly don’t see that happening now, and I don’t see that happening in a big way. London attracts more investment capital than any other city in the world, so that’s not an issue I have seen at all yet,” she said.

The UK is also producing far more potential future unicorns than any other European nation, with 54 companies valued between $250m and $1bn, compared with France and Germany’s respective 27 and 28 potential unicorns.

“The UK’s track record in producing startups that go on to be globally significant companies is strong and is getting stronger all the time”
Wendy Tan White, Tech Nation/Alan Turing Insititute

“The UK’s track record in producing startups that go on to be globally significant companies is strong and is getting stronger all the time,” said Tech Nation board member and Alan Turing Insititute trustee, Wendy Tan White.

“The increased number of initial public offerings and potential future unicorns in the pipeline shows why investors are keen to invest in UK startups and develop some of this country’s most innovative tech intellectual property into business ideas that will really help improve productivity and prosperity in the long term.”

However, despite the UK’s success, a separate Tech Nation report, published on 17 May, showed that only 19% of the UK’s digital tech workforce is female.

Despite this, Burbidge was optimistic about the road ahead: “For me personally, I have benefited being a woman in the space. Even companies that aren’t obliged to supply gender statistics are doing it. Attitudes are very much there, we just need to keep doing that and stay mindful, not just for women but other under-represented groups too.”

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