Analysis conducted by accounting and audit company RSM suggests that the Chancellor’s claim in the Spring Statement that a new tech company is being set up at a rate of one per hour has substance. Indeed, RSM say the number of new technology companies launched in the UK last year rose by almost 60% with 10,016 software development and programming businesses incorporated compared to 6,300 in 2016.
Furthermore, the UK’s tech sector is attracting more venture capital investment than its European competitors. Research by Dealroom and Tech Nation showed that the UK’s venture capital investment last year was higher than Germany’s total of $3.2bn and France, which brought in $2.8bn. Over the last two years, the UK earned more than the next three top-earning European countries combined, including France (£1.55bn), Germany (£2.15bn) and Sweden (£644m). British tech businesses attracted $7.8bn of funding last year, which was almost double the amount received in 2016. So far in 2018, over £874m has been raised by UK tech companies in venture capital funding, more than any other tech hub in Europe according to data from London and Partners.
Matt Hancock, Secretary of State for Digital, Culture, Media and Sport, said: “These new figures show the UK is the digital dynamo of Europe and we are achieving our goal to be the best place in the world to start and grow a tech business.”
According to RSM, Companies House data demonstrated that there was growth in start-ups right across the country, although London dominates the landscape with 40% last year. The capital also accumulated the largest amount of funding into sectors like artificial intelligence and cybersecurity.
“The number of new venture funds and foreign firms that are looking to invest here is huge testament to the quality of entrepreneurs and technology companies emerging from London,” added Hancock at the London Tech Week 2018 event.
The research by Dealroom and Tech Nation also revealed that the UK has produced 13 unicorns, which are companies with a valuation of more than $1bn, equal to 37% of the total value of all European unicorns. Deliveroo, WorldRemit and Funding Circle are examples of UK success.
The government also announced a new merger and takeover rules, recognising the growing importance of small UK businesses in developing cutting edge technology products with national security applications. These apply to companies developing military and dual-use technology, computing hardware and quantum technology – sectors that are most likely to have security implications. The rules now apply to companies with a UK turnover of more than £1m, down from £70m previously.
Sources and Acknowledgements: gov.uk, city am, Dealroom and Tech Nation, RSM, Forbes.