VC investment into British technology companies is at an all-time high according to London & Partners, with more than $1.5bn raised during the first 6 months of 2015.
The figures compiled by London & Partners and sourced from angel and VC investment database CB insights show a significant increase on the same period in 2014 which saw $1bn of funding raised, and eclipse the full 12 month totals from 2010-2013.
London was responsible for more than 80% of the total funding and 70% of all deals, with 40% of the capital’s funding won by FinTech companies, who raised $472m altogether through the likes of Funding Circle, Azimo and World Remit.
The latest high water mark will be seen as further vindication of the “Tech City” initiative, launched by Prime Minister David Cameron and Mayor Boris Johnson in 2010, with VC investment having grown tenfold in the five year period form 2010-2015.
Tech is now the fastest growing sector in the economy and is forecast to grow to £18bn by the end of 2015 according to research from Oxford Economics. The number of companies within the digital technology sector has also grown by 46%.
The UK tech sector has grown by 17%, creating around 30,000 jobs, but according to GP Bullhound the most significant development is the rise in the number of so-called “unicorns”. There are now as many as 17 tech companies in the UK whose valuations are greater than $1bn, says the investment bank with a tech focus, 7 of which have emerged in the UK over the past year.
Many are listed on the stock exchange; retailer AO World, online fashion chain Asos, property websites Rightmove and Zoopla and online takeaway firm Just Eat. New joiners include name-that-tune app Shazam, online clothes retailer Farfetch and Skrill, acquired by Optimal Payments early in 2015 for $1.2bn.
Powa technologies, backed by British dotcom millionaire Dan Wagner, is now worth $1.6bn after its acquisition of Hong Kong based rival MPayMe, however the consensus is that a note of caution should be sounded given valuations are generally based on the strength of the most recent funding round.
Companies such as King Digital, the company behind Candy Crush, IPO’d in New York at a price of $22.50 per share but has since seen its stock plummet to around $14.50 per share.
To put things in perspective, the total value of Europe’s unicorns is approximately $120bn, which when compared to Apple’s current valuation of around $730bn and Facebook’s of $230bn, shows that Europe still has work to do in order to keep pace with, let alone match, the might of the US tech sector.