British start-ups ' venture capital funding grew 44 percent to a record $13.2 billion in 2019, said a report prepared by industry group Tech Nation and research firm Dealroom.
In comparison, Dealroom figures show that spending in U.S. and Chinese tech firms actually slowed from January to December, with the U.S. dropping 20 percent and China dipping 65 percent more steeply. The U.S. and China were still top in terms of total value for the deal, but attracted $116 billion and $33.5 billion respectively.
The statistics showed nearly half of the total amount invested in Britain. The tech came from developers in the US and Asia. Foreign investors flocked into the UK last year. Yet Europe is looking for cheaper valuations amid growing competition in emerging fields such as fintech. Start-ups such as the Monzo Challenger Bank and the Klarna online payment firm attracted huge nine-figure deals led by U.S. investors.
Yet fintech hasn't been the only sector that has seen significant growth. Huge inflows also saw emerging industries such as artificial intelligence, so-called "deep tech" and clean energy. Healthcare company Benevolent AI raised $90 million and virtual reality company Melody raised $60 million, while investors contributed $260 million in resources to Ovo.
The U.K. and Europe quite frankly have over the last 20 years mainly seen on the sidelines of the global tech economy.
Saul Klein, co-founder of early stage venture fund LocalGlobe, told CNBC in an interview.
It’s taken about 20 years to get here and the data now supports that the U.K. is a major global tech player.
What’s behind the growth of UK tech?
According to Dealroom data, Britain represented a third of the nearly $40 billion injected last year into European tech companies. But that doesn't mean that countries across the continent have not experienced significant growth, either. Investment in German start-ups grew 41% to $7 billion in 2019 while French tech investment grew 37% to $5.2 billion.
Still, the total amount of Britain's deal far exceeded that of its continental rivals with $13.2 billion invested in tech start-ups in the country.
“The most attractive thing about investing in Britain is the package,” Matt Warman, digital minister for the U.K., told CNBC. He said the U.K. had a supportive business environment, geography and language as well as some of the world’s top schools to thank for the growth of its tech sector.It is also worth noting that British tech firms ' booming interest came against a backdrop of a U.S.-China trade rift that has dragged in the tech industry. K.U. Officials are scheduled to decide later this month whether to allow Huawei access to its 5 G networks, a key decision clouded by U.S. lobbying to block the Chinese tech giant.
Shadrach is a Trending Journalist. His first job was as a newsreader and journalist at an award winning magazine. He spends most of his time scouring the internet for the hottest topics to share with his readers.