United Kingdom

London #2

"It’s fantastic to see that London tech companies are attracting large volumes of capital across all stages of the funding journey as a sign that our tech ecosystem is truly flourishing and our entrepreneurs are second to none."

Eileen Burbidge
Partner, Passion Capital
#4 Global Ecosystem in Talent & Experience
#2 Global Ecosystem in Funding
Top 10 Global Ecosystem in Performance

Highlights

London remains Europe’s startup capital and ranked fourth globally for VC investment in 2021. The city’s tech companies raised an all-time high of $25.5 billion in VC funding last year, more than double its 2020 total. An influx of capital into the U.K. capital from Silicon Valley is driving much of this boom. Cleantech has been a particularly hot sub-sector with $1.7 billion pumped into London-based Cleantech companies in 2021. London is the #2 city globally for the number of Cleantech rounds raised by startups.


Local VC firms include Balderton Capital, which focuses on backing European technology companies. In November 2021, it announced it had raised a second, $600 million fund. Early-stage VC firm Passion Capital announced its third, $62.5 million fund in March 2021.


Unsurprisingly given this flood of investment, London gained 20 new unicorns in 2021, more than any other previous year. These include Insuretech Marshmallow, SaaS company TrueLayer, and Fintech Starling Bank. London’s total unicorn count now stands at 75, making it the unicorn capital of Europe. In January 2022, Wayve, a provider of autonomous vehicle software, raised a $200 million Series B round that drew participation from Microsoft, Eclipse Ventures, and Balderton Capital, among others.


London Tech Week is the UK’s tech flagship event, where global founders, investors, and more come together to discuss all things tech. Black Girls In Tech Fest is a networking and recruitment event to create pathways for Black women in tech. Tech Nation provides coaching, content, and community for founders, leaders, and scaling companies.

Ecosystem by the Numbers

TOTAL EARLY STAGE FUNDING
(2019H2-2021)
$14 bn
GLOBAL AVG.
$687 m
ECOSYSTEM VALUE
(2019H2-2021)
$314 bn
GLOBAL AVG.
$28.6 bn
MEDIAN SEED ROUND (2019H2-2021)
$714 k
GLOBAL AVG.
$671 k
MEDIAN SERIES A ROUND (2019H2-2021)
$6.2 m
GLOBAL AVG.
$4.7 m
SOFT. ENGINEER SALARY (2021)
$69 k
GLOBAL AVG.
$46 k
79 bn
GLOBAL AVG.
11.3 bn
1441
GLOBAL AVG.
101
Amount ($)
Count (#)

Exits

(2017-2021)
EARLY-STAGE FUNDING GROWTH TIER (2018/19 VS. 2020/21)
7
Calculated on a scale of
1 (lowest) to 10 (highest)
TOTAL VC FUNDING (2017-2021)
$68 bn
GLOBAL AVG.
$4.5 bn
TIME TO EXIT (2017-2021)
9.5 years
GLOBAL AVG.
9.4 years

Sub-Sector Strengths

Fintech

London-based Fintechs raised $11.7 billion in 2021, which accounted for 46% of total VC investment for the year. Barclays Accelerator, a Fintech-focused accelerator powered by Techstars, reached a $4 billion valuation in 2021. The government plans to support the sub-sector with new visa pathways for foreign workers, enhancing the regulatory toolbox, reforming market-listing rules, and exploring a central-bank digital currency. Revolut raised an $800 million Series E in July 2021. Payment solutions provider SaltPay raised a $370 million Series C in November 2021, and Blockchain-based lending platform Celsius Network raised a $350 million Series B the same month.

Edtech

The U.K.'s Edtech sub-sector attracted a flood of American money in 2021r. More than 40% of all Edtech investment into Europe goes to the U.K. EdTech World Forum and London Edtech Week are key events. Student recruitment platform Unibuddy raised a £14.5 million ($18.9 million) Series B in July 2021. Apprenticeship startup Multiverse raised a $130 million Series C in September 2021. Online teaching platform Atom Learning raised a £19 million ($24.7 million) Series A in December 2021.

Reasons to Move Your Startup to London

Access to Funding

Compared with other international tech hubs, startups in London have access to deeper pools of capital, with an average seed round of $653,000, compared to a global average of $494,000. As of the close of 2021, London was home to over 1,370 VC firms, more than any other European city. Several global investment firms have increased their presence in London recently. Index Ventures announced a $3.1 billion fund for European startups in July 2021, while Silicon Valley-based VC Sequoia Capital also expanded its footprint in the UK capital.

Government Support

The mayor of London’s £1 million ($1.3 million) Resilience Fund challenges innovators to develop solutions to some of London’s most pressing problems. London & Partners offers support and advice for scaleup companies looking to set up shop in London. Its Business Growth Programme supports pre-seed and seed stage startups and SMEs that employ between five and 10 people. The program also runs an accelerator program for mission-driven businesses working towards the UN’s Sustainable Development Goals. Selected companies gain access to corporates, mentors, workshops, and business advice.

Selected Startup Organizations

Startup Genome
Partners

Tech Nation (formerly Tech City UK)
Accelerator Network
Balderton Capital
City of London
GEN
GSMA
KPMG
Level39
MassChallenge
Microsoft Ventures
Microsoft for Startups
Northzone
Tech London Advocates
TechUK
Techstars London
Wayra London

Get connected

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