Investment in UK tech firms soars to £1.4bn

The near-$1bn rise in funding represents the biggest annual increase in technology investment in the last four years

UK-based tech companies attracted $2.1bn in venture capital funding this year, compared to $1.1bn in 2013, according to data compiled by CB Insights.

Notable deals include the travel search engine operator Momondo Group raising $130m in October, peer-to-peer lender Funding Circle’s $65m funding round in July, and the online payment specialist Powa Technologies raising $80m in November.

The near-$1bn rise in funding represents the biggest annual increase in technology investment in the last four years. In total, 284 technology companies attracted institutional funding this year.

Gerard Grech, chief executive of Tech City UK, the quango charged with promoting the tech sector, said: “The record level of investment in Britain’s tech sector is proof that the UK is well on its way to becoming a world leader in digital technology innovation.

“These numbers are testament to the skillsets and the increasingly strong digital clusters across the UK, coupled with improving policy conditions.”

However the findings also raise questions about how London-focused the booming sector is. Around 67 per cent of all the venture capital funding raised by technology businesses in the UK this year was ploughed into London-based companies, compared with just 8.78 per cent in 2010.

Tech City UK, founded in 2010, was originally mandated to simply promote London’s so-called Silicon Roundabout, a cluster of technology companies around east London’s Old Street roundabout. Its mandate has broadened to cover the entire country, but the capital continues to attract a disproportionate level of technology entrepreneurs and investors.

Mr Grech said: “Building on London’s success and creating connectivity between different cities and clusters will continue to drive the overall health of this fast-growing sector.”