Silicon Valley increases UK tech startup funds
Despite Brexit, 2017 has seen a record amount of cash from Silicon Valley being invested into UK tech startups in an attempt to help strengthen links with the world's largest tech hub.
During the first 9 months of 2017, San Francisco and the Bay Area based venture capitalists offered £884.8m to UK tech startups, with 90 percent of the funding going to London. 2016 saw only £342m in comparison for the entire year, according to London & Partners.
The increase in funding has come at a time of uncertainly in regards to Brexit, with British tech companies at risk of losing funds from the European Investment Fund.
Sherry Coutu, the co-founder of 'Silicon Valley Comes to the UK' (SVC2UK), said “With some of best global talent and a strong culture of entrepreneurship, the UK and Silicon Valley are two of the world’s leading places to start and scale a technology business".
She went on to say: "It is no surprise to see that British tech firms continue to attract more venture capital investment from the Bay area than any other European country and the figures released today suggest that Brexit has not had an impact."
"While London has grown to become Europe’s largest tech hub, we still have a way to go to emulate the success of Silicon Valley and there is a lot we can learn from each other."
London's ICT market is Europe's largest, worth £36bn
Between 2012 and 2017, Silicon Valley investors pumped in £2.1bn into the UK, making it the leading destination for investors. The second most popular location is Sweden, which received half the amount as the UK during the same time frame - Germany received a quarter of the funding compared to the UK.
There are 17 tech companies valued at just under £1bn in London - this compares to seven in Stockholm and five in Berlin.
So what companies are these venture capitalists mainly interested in?
UK Fintech startups are shutting down Brexit concerns with a record number of investments so far this year confirming London's position as the fintech capital of Europe and a global hub.
Kevin Chong, co-head of emerging companies at Investec said “Reaffirming the global appeal of London’s fintech sector, in 2017 we have seen a large number of international investors invest in London fintechs who have not invested in London previously”.
Investec invests in a number of fintech startups across the world. “And fintech, unlike some of the other technology sectors, is one of those areas where you can’t avoid having to partner with or have some sort of relationship with the established players.” he said.
The deputy Mayor of London, Rajesh Agrawal said the latest figures were "yet more proof that global investors believe London will remain a leading fintech hub for many years to come".
What makes London so special?
World class talent, for a start - with over 240,000 digital tech professionals in London from all over the world, 20,000 students studying computer science and some of the world's top universities undertaking IT R&D in the capital.
Additionally, tech-friendly visas allow prospective entrepreneurs to enter the UK to secure funding and set a business strategy before proceeding to a full Tier 1 (Entrepreneur) visa.
Tech hotspots are thriving across London, ranging from gaming, software, process outsourcing and more. 86 percent of London's developers are based in East London, with over 13,000 located in south London - higher than North and West combined. North London is now starting to see an increase in tech startups, but remains a growing opportunity for businesses to build their tech teams there.
London also offers super-fast broadband and transport networks with world-class connectivity and access to customers - there are more European headquarters in London than in any other European city, giving you unbeatable access to major international contracts and projects.
"A key factor for London was the availability of top talent. It’s critical for an organisation like ours to be able to tap into the best talent and some of Europe’s leading universities are here in London."
- Jordi Ribas, General Manager, Microsoft Search Technology Centre, Europe
Written by Paul Marks.