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The UK tech sector is now worth $1tn following surge of investment during the Covid-19 pandemic, making it the third country in the world after the US and China to reach the valuation.
According to data prepared by Dealroom for the UK’S Digital Economy council, the UK tech ecosystem was valued at $446bn in 2018, but is now valued at $942bn after growing 42% between 2020 and 2021 as a result of greater investment into software and digital companies at the start of the pandemic.
The increased investment has also helped catapult a number of unicorns (companies valued at $1bn or more) to decacorn status (companies worth over $10bn), of which there are now a total of 13 in the UK.
This includes financial technology firms eToro, Admiral Group, Rapyd, Wise, FNZ, Revolut, Checkout.com, and WorldPay, as well as e-commerce platforms Ocado and Deliveroo. Other UK decacorns include datacentre provider Global Switch, semiconductor manufacturer ARM, and big data firm Markit.
A further 14 companies – including cyber security firm Synk, zero-emissions transport company Arrival and virtual events platform Hopin – are valued between $5bn and $10bn.
While the majority of unicorns are still concentrated in London, there are now a total of 42 unicorns spread out across the UK’s regions.
“Our tech industry has gone from strength to strength, overtaking the rest of Europe and entering the history books as the third country ever to reach this milestone,” said digital minister Chris Philp.
“We’re working hard to make the UK the best place in the world to found, grow or float tech businesses – whether they’re early-stage startups or global innovators – ensuring they have the best talent, investment and regulation to thrive.”
In the first three months of 2022, UK tech companies have raised a further £6bn, with more than half (£3.3bn) going to fintech companies alone. The Department for Culture Media and Sport (DCMS) published research last year that found the UK tech sector is on track to add a further £190bn in value to the economy and create nearly 700,000 jobs over the next three years.
Gerard Grech, chief executive of Tech Nation, said the UK tech sector reaching $1tn was a watershed moment: “The industry has gone through difficult global challenges and come out stronger than ever. 10 years ago people said there weren’t enough startups in the UK. Five years ago people said there weren’t enough scale-ups.
“Every day, innovative and experimental tech companies are being launched across the UK that will grow into the next generation of unicorns and decacorns, and we at Tech Nation are committed to supporting and fuelling these high-potential businesses across the whole country.”
Daniel Korski, CEO of government technology accelerator Public, added: “By providing the right tools and resources, along with supportive networks, we can ensure the industry continues to scale and remain a world leader in tech.”
During the pandemic, more than £1bn of convertible loans were issued to a total of nearly 1,200 startups through the government’s Future Fund programme, which was launched in April 2021 by finance minister Rishi Sunak to support startups and loss-making companies with the investment needed to stay afloat during the pandemic.
The British Business Bank revealed on 14 September 2021 that, as a result of the Future Fund loans, the government now has equity stakes in 158 high-growth startups.
The massively increased investment at the start of the pandemic also coincides with a sharp increase in the number of new technology firms being set up, with UK business creation figures from March 2021 showing that a new technology business was created every half an hour during 2020, with nearly 19,500 registering in total across the UK.
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