London’s Old Street roundabout, often dubbed “Silicon Roundabout.”
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British technology start-ups have attracted more foreign investment since the start of the year than they did throughout all of 2018, according to fresh figures published Wednesday.
U.S. and Asian venture capital investors poured $3.7 billion into U.K. tech companies in the first seven months of 2019, research from industry group Tech Nation and data firm Dealroom showed. Last year, U.K. start-ups raised $2.9 billion from American and Asian investors.
The eye-watering sum was boosted by nine-figure deals from capital-rich companies like Amazon and SoftBank. In May, Amazon led a $575 million funding round for Deliveroo — although that was hit with a warning from the U.K. competition regulator — while SoftBank’s notable U.K. investments include $800 million for Greensill and $390 million for OakNorth.
Including domestic sources of cash, $6.7 billion has been invested into private British tech firms overall in 2019, Tech Nation said, adding that figure could rise to a record $11 billion by the end of the year. The organization said U.S. corporate venture capital funding for U.K. start-ups has risen by 3% in the last six years, while Asian corporate funding is up 20%.
“It’s evidence for us that there’s growing interest for emerging technologies that are gaining a lot of traction in the U.K. from foreign investors,” George Windsor, Tech Nation’s head of insights, told CNBC in a phone interview. “This shows us the U.K. is continuing to perform strongly on the global stage, and for us this is just the start.”
The U.K. pulled in the largest amount of foreign funding for tech companies versus other European countries, the data showed. For example, German start-ups bagged about $800 million from U.S. and Asian investors in the first half of the year, while French firms brought in only $500 million.
One particular bright spot for the U.K.’s tech industry has been financial technology, with plenty of capital flowing into start-ups like Monzo, Checkout and GoCardless. Monzo is backed by U.S. payments firm Stripe, while GoCardless counts tech giants Alphabet and Salesforce as investors.
But Tech Nation’s Windsor said the country has managed to maintain a diverse mix of start-ups in terms of sectors, with the research highlighting health tech firm Babylon and energy supplier Ovo Energy as examples of other companies attracting large sums of money. British artificial intelligence and cybersecurity firms are also an attractive bet for foreign investors, he said.
And while Brexit has been a source of uncertainty for businesses across the U.K., Windsor said it isn’t at the top of tech entrepreneurs’ minds: “Entrepreneurs had problems before Brexit, and they’ll just get about solving them. Brexit is too nebulous a thing for them to tackle as an entrepreneur.”