UK tech sector will end the year as Europe’s leading ecosystem, retaining its position as the main challenger to the US and China amidst a global backdrop of difficult economic conditions.
During 2022, fast-growing UK tech companies have continued to raise at near-record levels (£24 billion), more than France (£11.8 billion) and Germany (£9.1 billion) combined. This takes the total raised over the past five years to nearly $100 billion (£97 billion).
Consistent growth across UK tech saw the industry reach the $1 trillion in value milestone earlier this year, making it only the third country ever to hit this valuation after the US and China. This means the UK tech industry is ahead of its European peers and is worth more than double Germany’s ($467.2 billion) and three times more than France’s ($307.5 billion) as well as retaining the lead when it comes to overall funding, unicorns, and startups numbers.
This has enabled the UK to produce almost 400 high-growth startups since 2000 (worth more than $250 million in value). This includes 144 unicorns – companies with valuations of $1 billion or more – and 237 futurecorns, fast-growing companies which are predicted to be the most valuable businesses in the next few years. The new figures showcase how the ecosystem is expanding, up from 116 unicorns and 204 futurecorns at the same time last year.
Part of the UK’s strength in creating such a wide-ranging and expansive tech ecosystem is down to its focus on combining innovation with standards and values. Earlier this year the UK unveiled a new approach to regulating AI – based on core principles like safety, transparency, and fairness – to take a less centralized approach than the EU to reflect how AI is used in their sectors. The Chancellor also announced that the government will bring forward legal powers for the Digital Markets Unit to drive up competition and level the playing field for challenger tech firms. All this goes towards creating the right environment to drive forward research, technology, and growth.
Green energy receives the bulk of investment, such as Newcleo, a startup that is developing technology to enable safe uranium recycling (£258 million). Scaleups tackling healthcare inequality, such as Cera which bring technological innovation into social care raised £263m, while GrowUp Farms, a vertical farming company which uses technology to grow food more sustainably raised £100 million. The steady influx of investment into impact tech means the sector now employs more than 53,500 people, up from 37,500 last year.
This is also what is attracting international investors to expand their footprint in London and the UK to access the growing network of entrepreneurs in the new Silicon Valley.