The UK Tech Industry is Booming
2021 is setting up to be a record-breaking year for the technology industry in the uk
The first three months of 2021 has seen record breaking investments in the UK tech sector, there are a huge number of promising start-ups across the UK and investors wanted to seize stakes, close to $8bn has been raised for tech firms since the start of 2021. According to Tech Nation, the UK was the 3rd biggest destination for investment in 2020, but there are still a number of issued mitigate as the country, and the world emerge from the COVID-19 crisis.
The annual Tech Nation report stated that there were some private companies investing more in research and development in tech that the UK as a whole. The most recent Spring budget from Chancellor Rishi Sunak proposes a hike in spending in order to super-charge the UK tech sector, and ensure the most ambitious and promising tech companies get the focus and funding they need in order to contribute to tech innovations across the country.
The stock market has also played a huge role in the rise fo tech firms in the UK, eight of the United Kingdom's unicorn companies made their IPO on the LSE, raising a total on £3.1bn in 2020. Although last year saw half of the number of listings, the amount of capital raised doubled in comparison to 2018.
UK start-ups and scale-ups also came in third place globally last year, behind the US and China and $144bn and $44.6bn respectively, but the UK fats approaches China, as venture capital investment fell by 50% in 2019 and a further 3% in 2020. Although the UK fintech sector dropped by 23% in 2020, the wider tech industry made a record $15bn. Fintech plays a large role in the wider tech industry across the UK, Revolut just last year broke records in raining the UK's largest funding round of $580m, as stated in Tech Nation's Annual Report, and fast-growing companies such as Touchlight Genetics, Zego and Starling Bank saw investments at more than double the value compared to the previous year.
Just 10 tech companies secured around 20% of total venture capital investment last year, among them was Revolut. Gerard Grech the CE of Tech Nation, said that amid the global crisis, the tech sector “has not only survived; in many areas, it has boomed”. Seven 'unicorns' (private companies valued over $1bn emerged in 2020, including fitness clothing brand Gymshark and the web conferencing platform Hopin (now valued at over $5bn).
This year has been immense for tech, with 5 companies seeing valuations of more than $1bn so far in 2021, which is closing in on the number of companies seen at this level of valuation in the whole of 2020, which was a record breaking year for fundraising. Despite venture capital firm activity coming to a sharp stop during the first weeks of the pandemic, investors have since raced to pool money into the huge range of growing, and promising tech companies. The Tech Nation Report found that 2020 saw tech investment reach $15bn in the UK alone, widening the gap between rival European tech hubs like Germany and France.
These figures showcase the huge and continued investor appetite for the tech sector during the pandemic, as many fintech firms benefitted from the wider business shift towards digitalisation, as well as innovations in the digitalisation of a huge range of other industries. It is likely that amid the vaccine roll-out, huge investments and successful funding rounds, hosts of new tech startups, and funding backed by the UK government, that 2021 will be a hugely successful year for tech in the UK, promoting increased competition and innovation.
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