UK tech companies have raised more venture capital funding in the first five months of 2022 than in the whole of 2020.
This puts the UK second to the US globally when it comes to start-up investment and means that UK start-ups are outperforming those in China, France and India when it comes to attracting funding, figures from Dealroom analysed for the UK’s Digital Economy Council showed.
The new figures demonstrate the strength and resilience of the UK start-up sector.
So far, more than 950 UK tech start-ups and scale-ups have raised £12.4 billion in 2022, compared to £12bn for the whole of 2020.
In a record-breaking first quarter, UK tech raised £9bn, up from £6.3bn the same time last year, with the UK ahead of India and China when it comes to start-up funding, as well as raising more than double the funding raised by French tech companies.
This influx of capital means the UK is now home to 122 unicorns, with more than 20 cities and towns home to at least one unicorn, and 248 futurecorns. More than a third of the fastest-growing next-generation tech companies in Europe are now based in the UK.
The new data coincides with the launch of London Tech Week, which brings together leading names from across the UK’s digital industries.
London dominates Europe tech scene
London has dominated tech investment in Europe this year, raising £8.6bn, double that of Paris (£3.9bn) and over four times the amount of Berlin (£1.9bn).
It’s not only London that is thriving in Europe — Bristol and Oxford both made it into the top 20 European tech hubs for investment raised this year, raising £220 million and £248m, respectively. Bristol-based ClearBank, the UK’s new clearing bank, raised £181m in March, while Oxford-based drug discovery company OMass Therapeutics raised £75.5m in a Series B round in April.
Sustained investment over the past few years means that three UK regional cities and towns — Cambridge, Oxford and Abingdon — are among the top 20 European futurecorn hubs. Together, they are home to 18 futurecorns, including Healx, Oxbotica and Immunocore.
Not only are regional start-ups raising large sums, but regional investors are, too. This year, Leeds-based Northern Gritstone has raised £215m to use in university spinouts across Manchester, Leeds and Sheffield, and Manchester-based Praetura Ventures has raised £100m to support start-ups in the north of England.
Cambridge Innovation Capital has also raised its largest fund to date, £225m, to invest in high-growth companies in sectors including HealthTech and enterprise software.
FinTech strongest sector
FinTech has come out as the strongest sector for UK tech investment this year with £6.2 billion raised by FinTech start-ups and scale-ups already this year. Notable rounds included Checkout.com, which raised nearly £800m in Series D funding in January to become the UK’s most valuable private FinTech, and payments provider Paddle which raised £162.2m to become a unicorn earlier this year.
“Despite the wider global challenges that have led to a slow down in public markets, private tech investment in the UK is continuing to grow,” said Yoram Wijngaarde, founder and chief executive of Dealroom.
“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 [in Northern California].”
After FinTech, HealthTech was the second-most popular sector for investment so far in 2020, with about £791m invested.
Outside of FinTech, the largest investment round this year was for CityFibre, the UK’s largest independent full-fibre infrastructure platform, which raised £300m in investment by Mubadala Capital Ventures in March to bring full-fibre networks to homes and businesses across the UK.
Impact tech companies, which are using technology to solve challenges including climate change, are continuing to grow and scale across the UK.
Last year, more than £2.7bn was invested in impact start-ups — representing the most ever in a single year.
In 2022 so far, tech businesses focusing on impact have raised more than £791m.
The largest investment raised by an impact start-up this year was for Carbon Clean Solutions, a London-based carbon capture company which raised over £118m in a Series C round in May.
“The UK continues to be a leading light for exciting and dynamic impact and solution-focused start-ups,” said Daniel Korski, DEC member and chief executive of PUBLIC.
“We’ve been working hard to enable an environment where anyone can become an entrepreneur and set up a business that can make a difference, and it's great to see this momentum continuing beyond the pandemic.”
International investment
Increasingly, international investors are backing UK tech.
US investors have put more money into UK companies than they did in the whole of 2020, investing £6.1bn this year compared to £6bn in 2020. Asian investors have taken part in 60 deals this year investing £2.3bn.
This demonstrates that, despite a predicted slowdown in the wider tech ecosystem, UK tech is continuing to be seen as a strong bet by domestic and international investors.
The biog:
Favourite book: The Leader Who Had No Title by Robin Sharma
Pet Peeve: Racism
Proudest moment: Graduating from Sorbonne
What puts her off: Dishonesty in all its forms
Happiest period in her life: The beginning of her 30s
Favourite movie: "I have two. The Pursuit of Happiness and Homeless to Harvard"
Role model: Everyone. A child can be my role model
Slogan: The queen of peace, love and positive energy
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
MATCH INFO
Confederations Cup Group B
Germany v Chile
Kick-off: Thursday, 10pm (UAE)
Where: Kazan Arena, Kazan
Watch live: Abu Dhabi Sports HD
MATCH INFO
Alaves 1 (Perez 65' pen)
Real Madrid 2 (Ramos 52', Carvajal 69')
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to get there
Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
'The Batman'
Stars:Robert Pattinson
Director:Matt Reeves
Rating: 5/5
The fake news generation
288,000 – the number of posts reported as hate speech that were deleted by Facebook globally each month in May and June this year
11% – the number of Americans who said they trusted the news they read on Snapchat as of June 2017, according to Statista. Over a quarter stated that they ‘rarely trusted’ the news they read on social media in general
31% - the number of young people in the US aged between 10 and 18 who said they had shared a news story online in the last six months that they later found out was wrong or inaccurate
63% - percentage of Arab nationals who said they get their news from social media every single day.
MATCH INFO
Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90 4')
Red card: Rodrigo Bentancur (Juventus)
COMPANY%20PROFILE
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Breast cancer in men: the facts
1) Breast cancer is men is rare but can develop rapidly. It usually occurs in those over the ages of 60, but can occasionally affect younger men.
2) Symptoms can include a lump, discharge, swollen glands or a rash.
3) People with a history of cancer in the family can be more susceptible.
4) Treatments include surgery and chemotherapy but early diagnosis is the key.
5) Anyone concerned is urged to contact their doctor
Profile
Company: Libra Project
Based: Masdar City, ADGM, London and Delaware
Launch year: 2017
Size: A team of 12 with six employed full-time
Sector: Renewable energy
Funding: $500,000 in Series A funding from family and friends in 2018. A Series B round looking to raise $1.5m is now live.
The specs
Engine: 2.2-litre, turbodiesel
Transmission: 6-speed auto
Power: 160hp
Torque: 385Nm
Price: Dh116,900
On sale: now
