UK tech firms attract record $15bn in venture capital funding
UK technology companies attracted a record $15bn (£11.2bn) in venture capital funding in 2020, including the creation of seven “unicorn” firms valued at more than $1bn.
The firms raised more money from VC investors than the rest of Europe combined, according to research by the data provider Dealroom. The $15bn total compares with the previous record of $14.8bn in 2019.
The investments helped create seven unicorns – : the electric vehicle startup Arrival, the recipe box company Gousto, the green energy provider Octopus Energy, the e-commerce platforms Gymshark and Cazoo, and the cloud communications platform Infobip.
The UK is now home to more unicorns than any other European country, and as many as Germany, Netherlands and France combined, according to the research.
Oliver Dowden, the digital secretary, said:“It’s fantastic to see the UK’s tech companies flourishing, despite all the challenges of 2020. The thousands of high-skilled jobs they are creating will be a crucial part of our economic recovery and the government is committed to supporting the tech sector through an unashamedly pro-tech approach.”
The venture capital investment in UK companies was lifted by a series of “mega-rounds” of funding raised by companies including the challenger financial technology company Revolut and the digital insurance provider Ki, which both secured $500m. In the final weeks of December significant fundraisings included $95m for GoCardless, while Octopus Energy raised $200m.
The investment from a Japanese utility firm valued Octopus, which was founded little more than five years ago, at $2bn. The 7.4% stake of the founder, Greg Jackson, is worth an estimated $155m (£115m).
Oxford overtook Cambridge to take the number two spot in terms of VC investment in tech firms behind London. Oxford’s startups and “sca
leups” raised $532m in investment this year, led by the city’s health-related companies such as the biotech unicorn Oxford Nanopore, which raised $84.4m in October. Companies based in Leeds, Newcastle and Glasgow also raised more money than last year.
The digital minister Caroline Dinenage said: “Despite the challenges of 2020, the UK tech sector has had one of its strongest years yet, creating seven new billion-dollar companies and achieving record levels of investment.
“The success of our regional tech hubs is something to celebrate, as is the industry’s resilience by offering high levels of employment opportunities across a variety of disciplines. Over the upcoming months, we will work closely with the sector to support tech firms and ensure this momentum can be maintained.”