£1.1bn US boost for UK tech­nol­ogy start-ups

The Daily Telegraph - Business - - Front Page - By James Tit­comb

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

47pc

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.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.