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The UK leads Europe in scaleup investment, with technology scaleups delivering 80% of the country’s entire £6.3bn tech investments in 2018.
According to the Tech Nation Report 2019, investment in the UK’s technology scaleups grew by 61% last year and now accounts for 5% of global tech scaleup investments.
This puts the UK fourth in the world behind only the US, China and India.
According to Tech Nation, a UK-based network for digital entrepreneurs, this level of investment was two-and-a-half times higher than expected based on the relative size of the UK economy in 2018.
“The UK continues to exceed all predictions when it comes to tech growth,” said Tech Nation CEO Gerard Grech, who added that the findings show how the UK is a critical hub when it comes to global tech developments.
This sentiment was shared by Eileen Burbidge, chair of Tech Nation and partner at Passion Capital, who said: “Nowhere is this more evident than in the fintech [financial technology] sector, where the UK is ranked number one in the world – an enviable position that has been established with decades of hard work, entrepreneurial talent, innovation and supportive policymakers.”
UK fintech firms have attracted £4.5bn in investment since 2015, and now employ 18% of the country’s high-growth workforce, according to the report. Reflecting the UK’s historic role in the development of financial services, insurance tech firms employ 24% of this high-growth workforce.
While London continues to attract most of the UK’s high-growth tech investment, receiving £9bn since 2015, other regions have seen their distribution of overall tech investment increase significantly over the past 12 years.
The East of England, for example, has seen the biggest increase in capital invested across all tech companies – 206% – followed by the West Midlands (54%) and Yorkshire and the Humber (51%).
Artificial intelligence (AI) has also been highlighted in the report, with investment in AI increasing almost sixfold since 2014.
Read more about tech startups
- A Tech Nation programme to support the UK’s financial technology startups demonstrates the increasingly diverse range of business-to-business products and services available through the country’s fintech community.
- Tech Nation has selected 30 fast-growth startups to take part in the fourth instalment of its Upscale programme, which aims to help entrepreneurs and founders navigate the challenges of running small, rapidly growing businesses.
- The UK technology sector is growing more than two-and-a-half times faster than the overall economy and London has been ranked as the second most connected place for tech in the world behind Silicon Valley in the US.
In recent years, business and government have put significant financial resources towards the development of a knowledge-based economy, for example the £1bn AI sector deal.
The AI sector deal is one of many that have sprung up since the government unveiled its Industrial Strategy in November 2017, which seeks to increase productivity in a variety of sectors using technology.
In December 2018, the government committed to opening up data to further push the adoption of AI across all sectors of the UK economy.
The Industrial Strategy also committed the government to raising research and development (R&D) funding to 2.4% of GDP by 2027, although, based on the most recent figures from 2016 (which are cited in the report), current R&D expenditure in the UK totals 1.67%.
“The UK is a global tech powerhouse,” said prime minister Theresa May. “I am immensely proud of our country’s ambitious tech scaleups. These companies are delivering significant economic value to the nation through the investment they raise, the jobs they create and the innovative products and services they deliver.”
To compile the report, Tech Nation used data from Companies House, Dealroom, GitHub, Meetup.com, the OECD, Pitchbook, Stack Overflow, Streetbees and the World Economic Forum.