A new report published by Tech Nation and Dealroom indicates the UK is experiencing a robust market for investment in early-stage firms. In fact, the UK is going gangbusters in comparison to the year prior. The report states that the UK tech sector has attracted more foreign investment in the first seven months of 2019 than it did during the whole of last year and has overtaken the US for foreign investment per capita.
Additionally, during Q2 of 2019, investments in UK tech crushed prior records by more than a billion dollars putting the sector on track for its best year to date.
What is one of the biggest catalysts for UK foreign tech investment? Fintech, of course.
The authors state that if velocity holds, the UK sector is on course to exceed $11 billion worth of investment before the end of the year. In all of 2018, UK tech firms raised a total of $8.7 billion thus 2019 is going quite well.
Commenting on the report, Eileen Burbidge, Chair of Tech Nation, had this to say:
“Investment in the UK tech sector has been steadily rising for years and as these latest figures demonstrate, the momentum is increasing. It is incredibly gratifying to see that in addition to domestic and European investors, British tech innovators are also attracting US and Asian investor attention and allocation. The fact that this is growing is a testament to the strength and depth or our entrepreneurial talent, coupled with the dynamic and deeply engaged ecosystem that has been established here in the UK.”
The report boasts that 2X the value of US/Asian investments have been made in the UK since 2013 in comparison to Germany. In comparing to France, the number is 6 times the amount.
The surge in foreign investments from the US and Asian investors is higher than the amount received by the whole of the rest of Europe – the exception being Germany.
Since 2013, this takes the total amount of money put into the sector by US and Asian investors to $14.6 billion compared to a respective $6.5 billion and $2.5 billion into Germany and France.
The UK is said to be attracting more non-domestic capital, per capita, than the US, and is on China’s heels in terms of total non-domestic capital.
Some of the biggest recipients of this investment are well-known Fintech names such as supply chain finance platform Greensill – receiving $800 million from Softbank. Other Fintechs on the list include Oak North Bank, WorldRemit, Monzo, Starling Bank and more.
“The UK has become the world’s hottest tech hub.”
The report adds that a majority money has come from global investors but since 2018 37% of the capital has come from UK based investors. Only France and Netherlands exceed the amount of homegrown funding.
In comparison, France receives the least amount of foreign investment across the continent, followed by Germany.
Of course, no company sits on money raised. It is quickly put to work via either capital investment or new hires. The report explains that the top 30 companies that have received the most foreign investment in the past three years, including StarlingBank, Skyscanner, Darktrace, Checkout.com, have created over 5,000 new jobs.
The UK Secretary of State for Digital, Culture, Media, and Sport, Nicky Morgan, had this to say:
“These fantastic figures show the confidence overseas investors have in UK tech with investment flows from the US and Asia at an all time high. We have a longstanding reputation for innovation and the statistics endorse our reputation as one of the best places in the world to start and grow a digital business. Today we are also launching our Bright Tech Future Awards to recognise the strength and depth of our talent and I encourage bosses to nominate their staff for one of these prestigious prizes.”
Overall, the report paints a very positive picture of UK early stage investment even in light of the unknown economic impact of the forthcoming Brexit.
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