£1.1bn US boost for UK technology start-ups
SILICON VALLEY investors put a record £1.1bn into British technology start-ups last year, boosting claims that the UK is spreading its wings as a global tech hub.
The figures, revealed in a report from law firm Penningtons Manches, appear to knock back claims that international investors would turn their backs on the UK’s technology companies after the Brexit vote.
West Coast investment into UK tech companies rose by 47pc last year to £1.08bn, according to the report, and is up from just £213m in 2011. The number of deals has also risen significantly, climbing from 21 in 2011 to 74 in 2017.
The report, made using figures from the UK start-up database Beauhurst, said that a third of all investments in 2017 were now by North American investors. Those from West Coast investors account for just under 5pc of the total, while investment from the US East Coast is similarly at a record high, at £1.3bn.
The backing included a $30m (£21m) investment in Onfido, a background-checking company that works with the likes of Uber, from investors including Microsoft and Salesforce; the venture fund Andreessen Horowitz backing the simulation experts Improbable; and Union Square Ventures investing in fintech firm Funding Circle.
High valuations and an increasingly overcrowded field mean more US investors are looking overseas for deals, while UK start-ups often see
The rise in Silicon Valley investment into UK tech companies last year
an investment from abroad as a stepping stone to entering a market.
Just over half of investors surveyed said the Brexit vote had not dampened their enthusiasm for investing in the UK. While 45pc said it had made an investment less likely, 46pc said it had not made a difference and 9pc said it had made them more likely to invest.
They cited skills as the biggest reason to invest, along with proven science, a common language and lower valuations. While the majority of the £2.8bn invested since 2011 has been in software companies, life sciences startups have also raised £472m from Silicon Valley in the last seven years.
“Over recent years we have noticed an increase in the levels of US interest and investment in the UK, which has a particularly strong footprint in finance, retail and the creative industries,” said Penningtons Manches’ James Klein.
The biggest single West Coast investor was 500 Startups, an earlystage Silicon Valley fund. “Great companies come from everywhere so it’s important to get out of the Valley,” the company’s Matt Lerner said.
The report said that 79pc of all US investment into UK tech companies went into those based in the so-called “Golden Triangle”, the cluster formed by London, Oxford and Cambridge.