Enterprise capital funding into Britain’s know-how sector has reached a report excessive with London-based corporations securing round 75% of the $2.2bn raised by UK companies because the starting of this yr, based on knowledge from London & Companions1, the Mayor of London’s inward funding firm.
Altogether UK tech corporations have raised extra within the first 9 months of 2015 than the $2.1 billion raised in the entire of 2014. In the meantime, London-based tech corporations have raised $1.6 billion up to now this yr, eclipsing the $1.three billion for the full quantity raised in 2014.
5 years on because the launch of the Tech Metropolis venture, VC funding into London know-how corporations has sky-rocketed, with over ten occasions extra funding in 2015 than in 2010. This coincides with a speedy improve within the variety of tech companies, forecast to rise to 51,500 by 2025 in response to Oxford Economics.
Mayor of London Boris Johnson MP stated: “As a worldwide monetary and know-how powerhouse, it’s no shock to see that the capital is the jewel within the crown with regards to enterprise capital funding within the UK tech sector. With report funding serving to corporations to flourish, entry to prime tech expertise, world class universities and nice transport hyperlinks, there has arguably by no means been a greater time to start out, develop and scale a digital enterprise in London.”
Eileen Burbidge, Associate at Ardour Capital and the Mayor of London’s tech ambassador for the town, stated: “In little greater than 5 years we’ve seen funding in London’s tech sector improve tenfold. Much more importantly, we at the moment are beginning to see extra later-stage investments which help the scaling of extra London tech companies. At the moment’s figures and the truth that London is residence to extra software program builders than anyplace else on the earth validate the truth that London’s tech sector is maturing and is among the world’s main tech hubs.”
Gordon Innes, CEO of London & Companions added: “London is quick turning into a world class vacation spot for tech. The capital’s entry to expertise and worldwide markets makes it a horny location for a number of the world’s main buyers. From fledging start-ups to excessive progress corporations, the cash pouring into the sector helps to help the expansion of companies in any respect levels of the enterprise life cycle. With London companies securing round 75% of all funding into Britain’s digital financial system, it’s no shock that the tech sector is a number one supply of jobs and progress for London’s financial system.”
Within the final three months UK companies have secured $775 million VC funding whereas in London tech corporations have attracted $491 million.London’s e-commerce start-ups have been notably profitable in securing funding during the last three months, in line with London & Companions. Ecommerce companies reminiscent of Deliveroo ($70m), MADE.com ($60m), Secret Escapes ($60m) and Prodigy Finance ($19.5m) raised a mixed quantity of $246m – representing 50% of the whole quantity raised in London this quarter.
London’s booming fintech sector additionally continues to draw report ranges of VC funding with a complete $554 million raised this yr by September, already surpassing 2014’s complete of $487 million. This quarter noticed London-based peer-to-peer lending agency MarketInvoice increase $10m Collection A funding from main London VC agency Northzone, which additionally backed Spotify.
Jeppe Zink, London-based Common Companion at main VC fund Northzone feedback: “We’re seeing fascinating exercise in London throughout all levels of funding, particularly in sectors corresponding to FinTech, E-commerce, and on-demand providers. Injections of progress capital are enabling corporations to scale, and our funding in MarketInvoice, a part of a technique of supporting main FinTech corporations, is an ideal instance. Having labored with the workforce since final yr, and with incredible metrics on aspect, our most up-to-date funding is all about backing their speedy progress plans.”
Anil Stocker, co-founder and CEO of MarketInvoice, stated: “It is vital that London sees one or two main worldwide tech success tales within the subsequent ten years. The town is enjoying host to a stunning array of high-growth tech companies, and the constructive funding surroundings ought to see a few of these corporations scale into worldwide tech leaders – the best potential for that is clearly within the fintech area, the place the expertise mixture of tech and finance specialists is already making us a worldwide chief.”
The quantity of later-stage VC funding being secured by the capital’s tech start-ups can also be rising sharply, demonstrating how the sector is beginning to mature. In accordance with London & Companions later-stage funding 2 has risen by 387 per cent during the last 4 years to $791.55m.
This week, London based mostly enterprise capital investor Octopus Ventures introduced the launch of the $140m Octopus Zenith Alternatives II LP (“Octopus Alternatives fund”), aimed toward offering progress capital to profitable fast-growing later-stage corporations throughout Europe. The primary funding from the Octopus Alternatives fund has already been made, with Octopus main the current $60m spherical with Google Ventures into Secret Escapes, the London-based members solely luxurious journey website.
London is a number one worldwide vacation spot for wider overseas funding. In accordance with the lately launched IBM International Location report, London introduced in additional overseas funding and created extra jobs than some other metropolis in Europe. In 2014, London attracted 235 overseas funding tasks from corporations relocating and increasing abroad.
London & Companions helped 270 worldwide corporations set up their companies in London within the monetary yr 2014/15, with the tech sector seeing probably the most variety of investments, representing 40 per cent of all corporations investing the capital. In response to separate analysis by skilled providers agency EY greater than 1,000 worldwide tech funding tasks have been situated in London between 2005–2014, considerably greater than the subsequent most engaging metropolis, Paris (381).