The UK tech sector is attracting an average of $1bn a month in investment – one and a half times the amount raised during the same period last year.
During the second quarter of 2019, investment in UK tech smashed previous records by more than a billion dollars, putting the sector on track for its best year to date.
Secretary of State for Digital, Culture, Media and Sport, Nicky Morgan, said: “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.”
These record-breaking figures have been boosted by keen interest in UK tech by investors in the US and Asia.
Since 2013, UK tech has attracted double the investment of Germany from US and Asian investors, and six times as much as France. The total amount of investment in the UK from these sources has surpassed $3.7bn in the first seven months of 2019.
With the exception of Germany, the surge in foreign investment from US and Asian investors is higher than the amount received by the whole of the rest of Europe combined. 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 $6.5bn and $2.5bn into Germany and France.
Natalie Black, HM Trade Commissioner, Asia Pacific said: “Today’s figures demonstrate investors’ confidence in the UK tech sector, which continues to go from strength to strength growing one and half times faster than any other sector in the economy. By attracting a broader mix of investors, particularly from Asia, we are showing that the UK’s tech sector is one of the most competitive in the world with a stable, bright future.”
Eileen Burbidge, Chair of Tech Nation said: “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.”
In fact, the UK is 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 drivers of 2019 investment include fintech Checkout.com, which received $230m in a Series A round from Insight Partners; supply chain finance company Greensill, who received $800m from Japan’s Softbank; London-born Deliveroo’s $575m Series G round led by Amazon and Fidelity; and Bristol-based OVO Energy’s $220m raise from Tokyo’s Mitsubishi Corporation.
Will Shu, founder and CEO of Deliveroo, said: “Deliveroo is proud to be a British tech company. We are growing quickly, building our London-based tech team. The UK is a fantastic place to start and grow a tech company, attract talent and, ultimately, turn great ideas into products and services that consumers know and love. These figures underline the real potential that the UK tech sector has.”
Closer to home
Although the majority of recent money has come from foreign investors, since 2018 37% of investments in UK tech have come from domestic sources. Only France and Netherlands exceed the amount of homegrown funding.
Beyond the amount of cash flow such investments can put into the wider economy, the rising interest in UK tech is having a significant impact on the creation of high-paying, high-productivity jobs in the sector.
The top 30 funded UK tech companies of the past three years – including Starling Bank, Skyscanner, Darktrace and Checkout.com – have collectively created more than 5,000 new positions.
In 2016, a total of 10,100 people were employed by these leading UK tech firms. By 2018, this had risen to 13,600 and in 2019 to date, this figure sits at 14,900 and rising.
When looking at the sector as a whole, our recent research found that in at least five UK cities, one in ten of the workforce is now involved in digital tech and a total of 2.1 million people work in the industry across the UK.
Digital tech roles offer salaries on average 10% higher than in other industries, and it’s not just tech jobs that are opening. A total of 230,000 non-tech jobs, including roles in HR, marketing, communications and more, were advertised in the tech sector in 2018.
Commenting on the increase in US investment Suzanne Ashman, partner at LocalGlobe said: “These latest figures cement the UK tech sector as a global leader when it comes to digital innovation. The influx of US and Asian investment not only proves just how valuable our expertise is to foreign markets, it will help attract the next generation of tech talent to go onto even bigger and better things.”
The Bright Tech Future Awards
We understand that the ability of young businesses to recruit and nurture talent – either from within the UK or from without – has been pivotal in building the vibrant, sustainable and scalable technology sector we see today.
For this growth to continue, it is vital that the sector continues to encourage skilled people to train, join and stay within the industry. With this in mind, Tech Nation, in partnership with the UK Government and The Digital Economy Council, are delighted to announce The Bright Tech Future Awards, to encourage companies in the sector to identify and nominate their most talented team members, at every level.
We’re looking for the unsung heroes of tech companies up and down the UK, the people who in every role and every function of a company, contribute to our world-leading tech sector, day in and day out. Each company can enter up to three members of staff for the Bright Tech Future Awards and nominees can be working in any role except C-Level.
Successful nominees will be invited to attend the Bright Tech Future Awards event later this year. The closing date for nominations is 8 October. Invitations to the event will be sent to successful nominations by 25 October.
Commenting on the Bright Tech Future Awards, Gerard Grech, CEO of Tech Nation said: “The public face of the tech industry tends to be the founders and inventors who create new companies and take them to the market. That’s only right and proper, but tech leaders aren’t built by entrepreneurs and founders alone. They require teams of talented people. And typically those teams will contain individuals that are central to the success of the venture. That’s why we think the Bright Tech Future Award is so important. It’s time to celebrate the unsung heroes. And that’s why we’re inviting companies from all over the UK to nominate their most talented team members.”
Commenting on the increase in US investment Guillaume Pousaz, the founder of Checkout.com, said: “From its high-quality engineering talent to its cultural diversity and unparalleled energy around the startup scene, the UK tech sector presents unique qualities and it’s no wonder US investors are flooding into it. With tier one investment firms managing to attract and retain the very best talent, US investment will only strengthen the UK’s leading position in the coming years.”
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