Home Business NewsTech News Hurrah! London tech firms raised $1.4bn in 2014

Hurrah! London tech firms raised $1.4bn in 2014

by LLB Reporter
30th Dec 14 2:26 pm

But we’re still a long way off US levels…

Well, we thought we’d done alright in 2013.

Back then, London tech companies raised $719m from venture capital (VC) firms to propel their growth.

But this year the capital’s cutting-edge tech companies have doubled that amount, raising some $1.4bn in VC financing.

That’s according to new research by London & Partners, the mayor’s promotional company for London.

It found that VC investment in London’s tech sector is now 20 times higher than in 2010.

Maintaining perspective: UK vs US

US flag

That said, we’re still a long way off the vertiginous sums seen in Silicon Valley.

Over the pond, a single company can raise in one round the amount that all our tech companies in the capital put together have raised in a whole year.

Earlier this month, for example, Uber announced it had raised $1.2bn in its most recent fundraising round, valuing it at an eye-watering $40bn. (Although that wasn’t solely from VC firms.)

To give you some idea of how the US measures up, total VC investment in the US exceeded $33bn in 2013 (across all sectors), according to this report from EY.

That compares with just $7.4bn raised in the whole of Europe in 2013 (across all sectors).

That said, tech experts are still excited about London’s tech scene.

Eileen Burbidge, London technology ambassador and partner at Passion Capital, which invests in tech start-ups, said: “London is rapidly becoming one of the most exciting tech markets in the world. Too many people still believe that tech innovation and investment is centred around the US.

“In fact, entrepreneurs, companies and investors are all gravitating to London to set up shop and launch products, lured by a rich talent pool and a vibrancy and dynamism that simply doesn’t exist elsewhere.”

So watch this space.

UK tech: the wider picture

And we certainly shouldn’t stick our noses up at the $1.4bn that London’s blossoming tech sector has rustled up, particularly as bigger deals are on the rise.

In 2013, there were only four VC deals in the UK worth $40m or more. This year, 12 fundraising rounds in the UK hit those levels.

The UK’s entire tech sector raised $2.1bn in venture capital in 2014.

The research suggests that Sheffield, Leeds and Manchester are blossoming as tech hubs, alongside London.

London still holds the crown

Old Street Roundabout AKA Silicon Roundabout

But London’s tech sector still dominates the UK tech scene, with London-based companies accounting for 65% of the total amount of VC funding raised.

Mayor of London Boris Johnson said: “Our tech sector has fostered bucket loads of innovation and entrepreneurialism, and is now becoming an industry that’s changing the way the world does business, creating real jobs and economic growth both in London and across the entire country.”

Gerard Grech, CEO of Tech City UK, said about the research: “The record level of investment in Britain’s tech sector is proof that the UK is well on its way to becoming a world leader in digital technology innovation.

“These numbers are testament to the skillsets and the increasingly strong digital clusters across the UK, coupled with improving policy conditions. Building on London’s success and creating connectivity between different cities and clusters will continue to drive the overall health of this fast growing sector.”

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