UK tech sector enjoys record investment in 2017 despite Brexit uncertainty

UK firms attracted almost four times more funding in 2017 than Germany, and more than France, Ireland and Sweden combined

A record amount of money flowed into the UK tech sector last year, particularly fuelled by venture capitalists splashing cash in London despite uncertainty around the implications of Brexit, new data has revealed.

Tech firms attracted close to £3bn in venture capital funding during the 12 months to the end of December, according to data compiled by the Mayor of London's official promotional agency, London & Partners. That was almost double the £1.63bn attracted throughout 2016, and marks a fresh all-time record for the country.

London accounted for around 80 per cent of all venture capital tech funding in 2017. Some of the biggest funding rounds were pulled off by game development platform Improbable, food delivery service Deliveroo and mobile network Truphone.

“Today’s record investment figures are further proof that London is the undisputed tech capital of Europe, and I am committed to ensuring we take over from Silicon Valley as the world’s leading tech hub,” said Mayor of London, Sadiq Khan.

“Technology entrepreneurs and businesses are attracted to our great city for its diverse talent pool and unique business ecosystem and I am determined that London remains open to investment and the best tech talent from all over the world,” he added.

The data also revealed that UK firms attracted almost four times more funding in 2017 than Germany, and more than France, Ireland and Sweden combined. London & Partners said that the capital’s tech companies also raised significantly more venture capital than any other European city.

Eileen Burbidge, a partner at investment company Passion Capital, said that the figures were “no surprise”.

“It’s a testament to our exceptional entrepreneurs that the UK tech sector continues to produce companies that are leading in the development of cutting edge technologies, such as artificial intelligence and fintech,” she said.

“This environment and ecosystem of innovation presents tremendous opportunities for investors, and will help to attract global investment into the UK’s digital economy for many years to come,” she added.

By subsector, the UK’s financial technology – or fintech – space led the year in terms of investment, attracting a record £1.34bn. London accounted for the bulk of that, with deals from the likes of Transferwise, Funding Circle and Monzo.

The UK’s Artificial Intelligence companies also grew their funding last year. Investment in London-based AI companies surpassed £200m: a 50 per cent increase on 2016 levels.

London & Partners also pointed out that several global tech behemoths pledged their long-term commitment to the capital last year. Amazon, Apple and Google all announced major investments.

During the second half of the year, music streaming service Spotify said that it would expand its research and development operations in London and double its staff headcount in the capital.