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Thursday, December 8, 2022

Dealroom: IT startups have raised over £12B in 2022 so far

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The £12.4 billion in venture capital raised is more than the total amount raised in 2020, placing the UK ahead of every other country save the United States.

According to industry estimates from Dealroom, UK digital startups and scaleups have garnered £12.4 billion in venture capital (VC) financing so far in 2022, with a record-breaking £9 billion raised in the first quarter alone.

In comparison, UK IT companies raised £6.3 billion in the first quarter of 2021 and £12 billion in the entire year of 2020.

In terms of tech startup funding, the UK is only second to the United States.

The statistics, which was released to conjunction with London Tech Week, which begins on June 13, 2022, showed that slightly over 950 businesses collected money. As a result of the flood of cash, the UK today has 122 unicorns, with at least one in each of more than 20 cities and towns, as well as 248 potential “future unicorns.”

However, London-based firms received £8.6 billion of the total £12.4 billion funded. Bristol and Oxford, the next two major UK IT investment centres, raised £220 million and £248 million, respectively.

Digital secretary Nadine Dorries said, “It is a tremendous success that UK IT enterprises are attracting more investment than countries ten times our size. This is a big statement of confidence in the talent behind excellent British technology as well as our inventive, competitive market. The UK government will announce a new plan “to build on this achievement by assisting businesses in growing, creating and filling new high-skilled jobs, and delivering groundbreaking technology to enhance people’s lives throughout the UK.”

Yoram Wijngaarde, the founder and CEO of Dealroom, stated that private tech investment in the UK is continuing to rise despite a global slump in public markets. He added, “In H1-2022, Britain cemented its position as one of the top fintech investment destinations, with more money flowing into the country than even the Bay Area. While the current downturn will affect almost everything, the British IT sector is in a better position than it has ever been in terms of the breadth and depth of its ecosystem.”

In terms of which industries received the most VC money, financial technology (fintech) businesses received £6.2 billion, including roughly £800 million to Checkout.com in a Series D funding round and £162.2 million to payments service Paddle, propelling the company to unicorn status. Healthtech and impact startups (those that target one or more of the United Nations’ Sustainable Development Goals) were the second most well-funded industries, each receiving £791 million.

In 2021, impact startups raised a total of £2.7 billion, setting a new high for financing.

“Data like this is vital to illustrate where we are, but it also motivates us to do better,” said Russ Shaw, founder of Tech London Advocates and Global Tech Advocates. “We want to see more diverse founders and more impact firms launching to take on the severe global challenges we’re facing.”

Separate estimates from Dealroom revealed in March 2022 that the commencement of the Covid-19 epidemic triggered huge investment in the UK’s digital enterprises, which are now worth at $1 trillion. Following the conversion of its Covid assistance loans into equity in September 2021, the UK government acquired interests in 158 high-growth firms. The Future Fund scheme, which was launched in April 2021 by finance minister Rishi Sunak to help startups and loss-making businesses get the funding they need to stay afloat during the pandemic, invested in the form of convertible loan notes, which gave the UK government equity shares in the company when the funding was converted.

Vaccitech PLC, which co-invented the Covid-19 vaccine with the University of Oxford; Century Tech, an education platform that uses artificial intelligence (AI) to personalize learning for children; Dice FM, a gig ticketing app; and Ripple Energy, which allows customers to buy shares in wind farms, were among the tech-related companies on the list.

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