UK tech investment hits record $15bn despite COVID and Brexit

London ranks fourth in the world for investing in technology venture capitalists after San Francisco, Beijing and New York. Photo: Getty Images

Tech venture capital investments in the UK hit a record high of $ 15 billion (£ 10.8 billion) in 2020 despite the economic impact of the coronavirus pandemic and the complications of Brexit. This was the result of a new report.

According to Tech Nation’s latest report, health and wellness companies raised $ 38 billion in 2020, up from $ 28 billion in 2019.

Augmented Reality, esports and gaming accounted for over $ 2.4 billion of the total venture capital investment in US companies like Caffeine, which raised $ 126 million for their gaming, entertainment and creative arts platform.

Finding the UK ranks third in the world after the US and China, Tech Nation said the gap between the UK and the two world powers is closing compared to previous years.

Graphics: Tech Nation

It was also found that both the US and China are investing more than ever in UK tech companies. 63% of investments in UK technology came from overseas in 2020, up from 50% in 2016.

Graphics: Tech Nation

London was also found to rank fourth in the world for investing in technology venture capitalists after San Francisco, Beijing and New York with $ 10.6 billion.

Graphics: Tech Nation

“The technical success of Great Britain is the result of foresight, drive and dynamism. The strong and growing tech ecosystem that we have nurtured over the years is producing excellent results. I believe this is just the beginning of what the UK can achieve, ”said Gerard Grech, Tech Nation CEO.

The study found that the UK’s tech startup and scale-up ecosystem is worth $ 585 billion, 120% more than 2017, and more than double the next most valuable ecosystem, Germany, at $ 291 billion.

In addition, the rate of technology’s gross value added to the UK economy has increased by an average of 7% per year since 2016.

According to the report, 2020 was a record year for deep tech investments, increasing 17% to just under $ 4 billion. “From blockchain to biotechnology, this AI-powered sector is the foundation on which much of our future will be built,” he noted.

Deep tech is a term used for technologies that do not focus on end-user services, such as artificial intelligence, robotics, blockchain, and quantum computing

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The UK is the third largest provider of impact tech investments in the world, according to the report, which has increased 160% since 2018, while the US has increased 15% over the same period.

CONTINUE READING: London tech startups raise $ 10 billion despite pandemic

Tech and consumer internet firms accounted for 40% of the total capital raised through initial public offerings on the London Stock Exchange (LSEG.L) in 2020.

The report found that 2019 was a record year for edtech investments in the UK at $ 184 million. However, in 2020 there was a drop to $ 124 million, which contradicted international trends.

“Edtech is critical to post-Covid-19 growth. Retraining and continuing education will be essential for the economy,” the report said.

The report quoted UK Prime Minister Boris Johnson as saying: “In North West England we have seen investment in health technology grow by over 200%, while our digital sector across the UK continues to make a huge contribution to fighting the pandemic: from the Connecting banned patients with their GPs to giving NHS staff free access to workplace mental health platforms. “

He added that 2020 “was a year when the brutal need to restrict human contact has increased the importance of technology of all kinds, from the NHS app to zoom calling.”

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