LONDON - The UK’s tech businesses have raised more than $5 billion in investment so far this year, despite the impact of coronavirus weighing on funds.
Startups across the UK took in $5.3 billion between January and May 2020, more than the rest of Europe combined at $4.1 billion.
Data compiled by Tech Nation and Dealroom showed London commanded the lion’s share of the investment at $4 billion, with the capital’s fintech firms leading the way to take 39 per cent of all funding in 2020 to date.
However the pair voiced concerns that the majority of these deals could have been agreed before the onset of the virus, and predicted that the second half of 2020 is likely to be much lower.
“The government will continue to champion and support the sector as it navigates the months to come as we step up our coronavirus recovery plans,” said digital secretary Oliver Dowden.
“We will back entrepreneurs, encourage innovators and help businesses make the most out of the opportunities the digital and tech world provides.”
The government’s £250m Future Fund, which matches funding for startups, has approved £55.9m of convertible loans despite receiving more than £515m worth of applications on its launch day alone in April.
Tech Nation and Dealroom said recent data gathered from businesses showed two-thirds expect revenues to drop by more than a quarter this year, while almost a half of frozen all hiring.
Following a record-breaking year of funding in 2019, the UK has added seven more unicorns — startups valued at more than $1bn — to its roster in the last 12 months. Its total now sits at 79, more than twice the number of second-place Germany at 32.
“These numbers reflect the inherent strength of the UK tech sector and reinforce my strong belief that the UK remains an attractive destination to start and grow a successful digital business,” said Cindy Rose, UK chief executive of Microsoft.
“Undoubtedly, there are economic headwinds ahead, but with our world class talent, strong startup ecosystem and the accelerated pace of technology adoption in the UK, I’m confident the UK tech sector will emerge strongly from this crisis and be a key factor in driving inclusive economic growth and recovery.”