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- Leveraging the country’s deep science and technology base, the UK is emerging as a leading ecosystem for responsible and values-based innovation.
- More than 3 million people working in UK tech train the next generation of talent with world-class companies
The UK is facing a global backdrop of difficult economic conditions, according to new figures from the Dealroom for the Digital Economy Council. The tech sector will end the year as Europe’s leading ecosystem, maintaining its position as the main challenger to the US and China.
Through 2022, fast-growing UK tech companies continue to raise near-record levels (£24 billion), more than France (£11.8 billion) and Germany (£9.1 billion) combined. This brings the total raised over the past five years to nearly $100 billion (£97 billion).
More statistics today show that the UK has:
- 144 Unicorns and 237 Futurecorns and more high-growth companies than European peers, creating more than 85,000 startups and scale-ups
- More venture capital investment than European peers
- A forward-thinking approach to regulation that encourages digital innovation and competition
- Attracted VC funds from around the world including General Catalyst, Sequoia and Lightspeed
- Eight cities with more than two unicorns, including Edinburgh, Nottingham and Oxford
The latest figures, compiled by Dealroom for the Digital Economy Council, underline the success of the UK tech economy and its progress as a source of global innovation – the European Silicon Valley. These elements are guiding the expansion of its tech ecosystem, which now employs 3 million people across the country.
Continued investment and growth has created a global tech powerhouse
Consistent growth across UK tech saw the industry hit the $1 trillion valuation milestone earlier this year, making it only the third country to achieve this valuation, after the US and China. This means the UK tech industry is ahead of its European peers and is worth more than double Germany’s ($467.2 billion) and three times France’s ($307.5 billion), as well as the lead when it comes to overall funding, number of unicorns and startups. maintains. .
This has enabled the UK to produce nearly 400 high-growth startups since 2000 (worth over $250 million). These include 144 unicorns – companies with a valuation of $1 billion or more – and 237 futurecorns, fast-growing companies that are predicted to become the most valuable businesses in the next few years. The new figures show how the ecosystem is expanding, up from 116 unicorns and 204 future corns at the same time last year.
Laying the foundations for value-based growth
Part of the UK’s strength in building such a broad and expansive tech ecosystem is its focus on combining innovation with standards and values. Earlier this year the UK introduced a new approach to regulating AI – based on key principles such as safety, transparency and fairness – taking a less centralized approach than the EU to reflect how AI is used in their sectors. The chancellor also announced that the government would bring forward legal powers for the Digital Market Unit to boost competition and level the playing field for challenger tech companies. All this goes towards creating the right environment for advancing research, technology and development.
Introduce new generations to tech
Almost 3,000 edtech startups have raised a collective £1.7 billion in funding over the past five years, with upskilling and reskilling becoming a key part of the UK’s dominance in tech. Companies like Academy, Code First Girls, Immersive Labs, and Multiverse focus on enabling people of all ages to acquire the skills they need to succeed in tech roles, from tech apprenticeships to coding, development, and cybersecurity.
UK companies are increasingly hiring for entry-level tech roles, up from 6,596 in November last year to more than 15,000 this year, according to smart job search engine Adzuna, as they look to bring in a new generation of tech talent and develop them into the future. want to do Leaders
Takes the lead in effect
While the UK is the dominant country outside the US for fintech investment (almost £10 billion raised this year), it is also becoming a leading hub for impact tech – companies creating technological solutions to reach the UN Sustainable Development Goals. There are almost 1,200 impact tech companies in the UK that have raised £3.12 billion in funding this year, ahead of last year’s record £3 billion.
Green energy receives the bulk of investment, such as Nucleo, a startup developing technology to enable safe uranium recycling (£258 million). Scaleups tackling healthcare inequality, such as Serra which brings technological innovation to social care, has raised £263m, while GrowUp Farms, a vertical farming company which uses technology to grow food more sustainably. A steady stream of investment in impact tech means the sector now employs more than 53,500 people, up from 37,500 last year.
Regional powers make a difference
Innovation has spread across the country, with eight cities now home to two or more unicorn companies, including Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham and Oxford. These high-growth businesses have used decades worth of science and tech research and development to revolutionize fields such as finance (Interactive Investor – democratization of investing), sustainable travel (vertical aerospace – electric powered aircraft), health research (Oxford Nanopore – portable DNA). have been sequencing) and electronic device development (CSR – Semiconductor).
Collectively, these cities are home to 112 unicorn businesses, more than France (36) and Germany (63) – demonstrating a strong pipeline of global tech leaders into and down the UK. In fact, Cambridge was recently named the number one university in the world for producing successful tech founders, beating out the likes of Harvard and MIT – with more than 500 alumni raising more than $10 million in funding. Oxford is third with 410. Bristol (173), Nottingham (100) and London (98) all made the top 20, thanks to their deep tech and science focus.
Finding the next sources of global innovation
It is also attracting international investors to expand their footprint in London and the UK to access the growing network of entrepreneurs in the new Silicon Valley. US investors including General Catalyst, Sequoia and Lightspeed have all stepped up after opening their teams in the UK in 2022. New offices here last year, and global firm New Enterprise Associates hired its first UK-based partner in October. While European investor Earlybird VC opened a new office in London earlier this year. This follows another strong year of fundraising for UK-based funds, who have collectively raised £9.2 billion this year, up from £9 billion at the same time in 2021.
Digital Minister Paul Scully said:
UK tech has been resilient in the face of global challenges and we ended the year as one of the world’s leading places for digital businesses. This is good news and reflects our pro-innovation approach to tech regulation, continued support for start-ups and ambition to enhance people’s digital skills.
ends
Notes to editors:
- Investment data from Dealroom correct as of Thursday 8 December 2022
- London is now the top tech ecosystem outside the US, according to Dealroom, using a combination of factors including early, breakout and late stage funding, university talent, patents and unicorns and $1 billion plus exits. This is ahead of other major cities including Paris, Tel Aviv and Beijing
About DEC:
The Digital Economy Council is a non-statutory advisory committee of independent members formed to advise the government. It aims to harness the expertise of industry and the wider tech community to develop a world-leading digital economy that works for everyone.
About Dealroom:
Dealroom.co is a leading data provider on startups, growth companies and tech ecosystems in Europe and around the world. Founded in Amsterdam in 2013, Dealroom.co now works with many of the world’s leading investors, entrepreneurs and government bodies to provide transparency, analysis and insights on startups and venture capital activity.
About Edzuna:
Adzuna is a smarter, more transparent job search engine used by millions of visitors every month. We love to bring every job together in one place, help match people with better, more fulfilling jobs and harness the incredible power of technology to keep Britain working.
Edzuna No. 10 Dashboard supplies real-time data to the Cabinet Office and Office for National Statistics labor market indicators. In 2018, Edzuna won the contract to run Find a Job, one of the British government’s most widely used online services.
Adzuna.co.uk was founded in 2011 by Andrew Hunter and Doug Monro, formerly of eBay, Gumtree, Qype and Zoopla, and is backed by leading venture capital firms LocalGlobe, Index Ventures and Smedvig Capital.
We’ve spent a decade developing a smarter, more transparent job search so job seekers around the world (we’re in 20 countries) can quickly zero in on the right role.
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