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Tech firms in London received more venture capital funding in 2017 than all other major European cities combined, with the amount invested doubling since 2016.
According to research by the mayor of London agency, London & Partners, £2.45bn in funds were invested in London-based firms in 2017, compared with £1.23bn in 2016. London accounted for 80% of investment in the UK.
The European city with the second largest influx of funds was Paris, which received £565m, followed by Berlin with £456m.
In the UK as a whole, investment reached £2.99bn, which dwarfed Germany’s £645m.
London mayor Sadiq Khan said the investments proved that London was the undisputed tech capital of Europe, adding the he wanted London to take over from Silicon Valley as the world’s leading tech hub.
“Technology entrepreneurs and businesses are attracted to our great city for its diverse talent pool and unique business ecosystem, and I am determined that London remains open to investment and the best tech talent from all over the world,” said Khan.
According to the findings, the UK’s financial technology (fintech) sector attracted the largest investment, with £1.34bn in funding, 90% of which was ploughed in to London-based businesses. Financial technology companies that received large investments include TransferWise (£211m), Funding Circle (£81.9m) and Monzo (£71m).
Artificial intelligence (AI) companies in London attracted more investment in 2017 than ever before, with over £200m invested – 50% higher than 2016. This trend was replicated nationally, with UK AI companies raising a record £488m last year – more than double the £232m raised in 2016.
Read more about UK tech investment
- London mayor Sadiq Khan opens London Tech Week and says Brexit will not hold back the city’s growing tech sector.
- The government wants to ensure the most highly talented technology and digital experts from overseas can work in the UK, writes home secretary Amber Rudd.
- London is adding digital businesses at a faster rate than the rest of the UK and accounts for double the number of tech companies than the rest of the nation combined.
Meanwhile, tech giants such as Amazon, Apple and Google made significant investments in London.
“It’s a testament to our exceptional entrepreneurs that the UK tech sector continues to produce companies that are leading in the development of cutting-edge technologies such as artificial intelligence and fintech,” said Eileen Burbidge, a partner at Passion Capital.
“This environment and ecosystem of innovation presents tremendous opportunities for investors, and will help to attract global investment into the UK’s digital economy for many years to come,” she added.
The research highlighted what would be at risk if the terms of Brexit were unattractive for tech firms. Other European cities are positioning themselves to attract talent and entrepreneurs if the UK becomes less attractive.
For example, according to recent research by Tech London Advocates, over half of tech entrepreneurs think Brexit is the biggest threat to the tech sector in London, with many missing out on top international talent as a direct result of the UK’s forthcoming exit from the EU.