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London tech sector attracts record investment

Despite uncertainties surrounding Brexit, the London tech sector has seen record levels of investment so far this year

London continues to hold its position as the tech capital of Europe, with record levels of venture capital (VC) investment in the city’s tech sector.

Despite the uncertainty surrounding Brexit, investment figures are at a record high, more than four times the investment seen during the same months in 2013 and more than any six month period in the last decade.

According to figures from London & Partners, VCs have invested £1.1bn in the city’s tech sector, more than any other European city since January 2017, with figures nationally at £1.3bn.

Since the Brexit vote in June 2017, UK tech companies across the country have received £2.39bn in VC investment, which is more than Germany, France and the Netherlands put together.

Private equity investment has also grown, with London tech companies getting a total of £4.5bn, spread across 34 deals. Across the UK, the total private equity investment figure is £5.3bn, which is higher than the two previous years.

Laura Citron, CEO of London & Partners, said the UK capital remains Europe’s leading hub for global investors. “The Brexit vote has understandably created some uncertainty, but it is no surprise to see that London continues to attract more than double the amount of investment than any other European city,” she said.

“The fundamental strengths of London as a centre for technology and business have not changed and we have everything companies need to be successful: policy makers, finance, infrastructure, world-class universities and talent. This year’s record investment levels show London’s tech sector continues to thrive and remains open to investment from all over the world.”

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However, M&A activity has been lower in the first half of 2017 than the same period last year. London & Partners claim that activity has “remained buoyant”, and UK tech companies have been involved in more M&A activity than tech companies in other European cities.

Herman Narula, CEO of virtual reality company Improbable, which has received £388m in investment, said London provides access to the country’s “tremendous tech talent” and continues to be an attractive place to work.

“The money investors such as SoftBank are putting into London’s tech companies will benefit the tech ecosystem as a whole, and will play a vital part in building foundational technologies for the 21st century here in Britain,” he said. 

Earlier in 2017, London mayor Sadiq Khan said that Brexit won’t affect the city’s tech sector, which will remain open to talent from around the world. 

Michael Keegan, TechUK deputy president and head of product business at Fujitsu EMEIA said the technology sector “remains a key source of strength for both the UK and the rest of Europe”, but added that businesses must invest in the future workforce, tackling the skills challenge.

“It will be vital for all European firms to collaborate with educational institutions and governments to build a strong pipeline of digital skills. Nurturing and attracting the next generation of talent is an absolute must,” said Keegan. “Part of this is down to ensuring science, technology, engineering and mathematics skills are a focus early on, while providing access to the digital education services required to support ongoing learning later on.”  

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