Private British tech firms buck market gloom with record quarterly venture capital investment led by fintech and healthcare tech
British tech firms raised more venture capital than the tech sector of China in the first five months of the year, as start-ups fended off the gloom that has battered publicly listed companies.
Private UK companies raised a record £9 billion in the first quarter alone, with venture capital tech investment rising to £12.4bn through May and placing the UK second behind the US globally, according to figures from Dealroom analysed for the UK’s Digital Economy Council.
The figures were released to coincide with the beginning of London Tech Week, at which digital secretary Nadine Dorries is expected to announce a strategy to boost growth and create high-skilled jobs.
UK tech firms have already raised more this year than the £12bn raised in all of 2020, and ahead of China, India and France, according to the figures.
The £9bn raised in the first quarter was also a significant jump from the £6.3bn raised in the first quarter of last year.
London retained its top spot as Europe’s biggest tech investment hub, with firms based there raising £8.6bn, double Paris at £3.9bn and four times the funds raised in Berlin at £1.9bn.
Bristol and Oxford both also placed in the top 20 European tech hubs for investment raised so far this year, raising £220m and £248m respectively.
Fintech was the strongest sector with £6.2bn raised by private fintech firms so far, including Checkout.com, which raised £800m in January to become the UK’s most valuable fintech and payments provider Paddle which raised £162.2m earlier this year.
Healthcare tech was the second-biggest sector with about £791m in investment so far.
CityFibre, the UK’s biggest independent full-fibre infrastructure provider, saw the UK’s biggest single investment outside of fintech with a £300m investment from Mubadala Capital Ventures in March.
Firms developing tech related to climate change also raised significant funds, with more than £2.7bn raised by the sector last year, the highest figure to date for a single year.
So far this year climate change start-ups have raised more than £791m, with the biggest investment being a £118m round going to London-based Carbon Clean Solutions in May.
Dealroom founder and chief executive Yoram Wijngaarde said the figures show private tech investment in the UK is “continuing to grow”.
“The UK has cemented its reputation as one of the best places to invest in fintech, with more fintech investment going into the country in the first part of this year compared to even the Bay Area,” he said.
“Overall the UK tech sector is in a strong position than it’s ever been before in terms of breadth and depth of the entire ecosystem.”
Digital secretary Dorries called the figures a “huge vote of confidence” in the sector.