75% Of VC Money In The UK Is Going To London Based Startups

Boris Johnson’s promotional agency, London & Partners has recently released figures claiming that investors have invested a record amount of money into London tech startups this year.

Figures show that between January and October, London-based startups received over £1 billion in investment, which is over three quarters of the total £1.4 billion that the UK tech sector has received in the same period.

The figures also showed that ecommerce startups in London have been extremely successful in securing funding recently too, with Deliveroo, the fast food delivery service, being given £46 million; MADE.com, the online furniture retailer, receiving £39 million; Prodigy Finance, a community-based student loan company, receiving £12 million; and, Secret Escapes, the online travel offer company raising £39 million.

The above companies received 50% of the venture capital investments that were made in London throughout the last quarter., which is rather impressive!

With only £100 million being raised in 2010 and more than £1.3 billion in 2015 so far, these latest figures support the idea that the UK’s digital economy is just getting stronger and stronger. This is something that the Mayor of London’s Tech Ambassador for the city, Eileen Burbidge, agrees with, stating:

“Today’s figures and the fact that London is home to more software developers than anywhere else in the world validate the fact that London’s tech sector is maturing and is one of the world’s leading tech hubs.”

It is worth noting that the information touted by London & Partners has the tendency to be very London-biased, with the company being the capital’s promotional company and all, so it is always worth taking with a pinch of salt. Although, in this particular case, it is hard to ignore the fact that London’s startups, especially techs, are flying!

The popularity of London’s tech startups with VCs is something that is fast becoming a bone of contention with some of the UK’s larger cities, such as Cambridge, Manchester and Bristol. Cities such as these believe that London is stealing all the publicity around tech startups and therefore attracting investors away from everywhere else in the UK. Indeed the data from London & Partners does indicate there is a very large gap between the rest of UK and London.

It is not surprising that investors are being attracted to London though, especially when you consider certain areas in the capital are inundated with startups, such as Shoreditch, which has 3,228 tech firms for every square kilometre. Numbers like that are going to attract attention!

Despite the popularity of London’s startups with VC money, the goings on across the ocean, in Silicon Valley, still dwarf London’s startup activity. For instance taxi request service, Uber, has been given over £5 billion and a valuation exceeding £33 billion! What makes this more shocking (and impressive) is that Uber is only five years’ old.

The UK has not yet produced a company that can compete with the likes of Facebook, Google or Apple and many believe this can be put down to the fact that UK startups and founders are failing to raise the vast amounts of capital that US startups have managed to.

But is that amount of money even present in the UK’s capital?