UK tech sector outpacing US and China
The UK secured 33 per cent of all European tech investment in 2019
The UK tech sector outstripped the US and China in terms of growth and investments and secured a third of all European venture capital (VC) tech funding last year, according to new research.
The report, prepared by networking firms Tech Nation and Dealroom.co for the Digital Economy Council, stated that investments in the tech sector jumped 31 per cent year on year to $13.2bn (£10.1bn) in 2019 - a record high for the country.
VC funding grew over 40 per cent for the third consecutive year, in contrast to the US and China which saw their investment numbers plummet 20 per cent and 65 per cent, respectively.
The UK now sits in third place behind those two countries in terms of total VC funding last year, with London becoming one of the top-funded cities in the world, with companies headquartered there raising $9.7bn in 2019.
Nearly 50 per cent of the UK investments came from Asia and the US and it had the widest overall mix of foreign and domestic investment when compared with its European neighbours France and Germany.
"It's fantastic to see Britain continue to be the best place in Europe to start and grow a tech business, with record-breaking investment and the creation of eight new billion-dollar companies last year," stated digital minister Matt Warman.
"This roaring success is testament to our business-friendly environment, talented workforce and longstanding reputation for innovation.
"As we head into a new decade, we want to keep up this momentum ensuring the tech sector flourishes right across the country, helping more entrepreneurs turn their ideas into business successes and strengthening the nation's digital skills."
Cindy Rose, UK CEO at Microsoft, added: "These numbers clearly show that if you want to invest in a high-potential technology business, then you need look no further than the UK.
"Our fast-growing tech companies, supported by a highly skilled workforce, are laying the foundations for continued success in decades to come.
"Equally importantly, we must make sure that we fully embrace the power of technology and AI to help strengthen our economy, ensure our future competitiveness and tackle some of the major challenges facing our society."
Eight unicorn companies were created in the UK in 2019, taking the total to 77, and the amount being invested in start-ups reached $5.1bn last year, up from $4bn in 2018.
This makes it the "unicorn capital" of Europe, producing twice as many billion-dollar companies as Germany and three times as many as France, according to the research.
The UK also had six cities among the top 26 globally for raising VC in 2019: London, Cambridge, Bristol, Oxford, Manchester and Edinburgh.
AI, fintech and clean energy were the industries that saw the most investment in the UK last year.
Natalie Black, HM trade commissioner Asia-Pacific, stated: "Asian investors are taking a keen interest in the success of the UK's tech sector and are enthused by our record of building unicorns and leadership in key sectors like AI and clean tech.
"The government is supporting more and more tech companies across the UK that are looking to expand in Asia and I have seen first-hand a step change in collaboration and investment in this part of the world, which is bringing exciting opportunities at home and overseas."
Ronan Harris, UK&I MD at Google, added: "Every country in Europe wants to build a thriving tech sector and the UK has achieved that.
"We are delighted to be committing more investment to our UK business over the course of the next decade.
"At Google, we want to help young tech businesses reach scale to help build a thriving, dynamic economy. These investment figures show that lots of other major tech investors have the same view and these are exciting times."