The British tech sector is booming, if levels of venture capital (VC) investment are anything to go by. It attracted record levels of funding in the first half of this year, with London’s financial technology (fintech) startups winning the biggest share.
VCs put $1.45bn (£930m) into UK tech companies in the first six months of 2015, according to London & Partners, the Mayor’s promotional body. That’s almost 50% more than the same period last year, when that figure was just over $1bn, and ten times bigger than the cash put up in 2010.
London is leading the charge, attracting 80% of the total funding and 70% of the 231 deals so far this year, according to the data drawn from investment database CB Insights. Flying the flag in particular are fintech firms, which raised $472m between them, or 40% of the capital’s total.
London & Partners pointed to World Remit, Azimo, Currency Cloud and Funding Circle’s fundraising efforts this year. The latter scored the biggest deal of the past quarter, raising $150m to bring its valuation to $1bn, thus granting it that legendary, much-touted ‘unicorn’ status.
The fintech sector has been particularly good at building on the City’s heritage and expertise in finance. As Passion Capital partner Eileen Burbidge, one of the UK’s best-known VCs, put it, ‘London combines the technology and digital innovation of Silicon Valley with the Wall Street financing heritage of New York and the policy making of Washington DC – all in one phenomenal city.’
Some tech bigwigs, on both sides of the Atlantic, have been warning that we are in a tech bubble, raising fears of a dotcom bust 2.0. But even if valuations and funding have to readjust to lower levels, there is no doubt that tech is moving faster than ever, creating hugely successful new businesses. With industry-watchers saying finance’s ‘Uber moment’ is long overdue, London’s fintech sector is surely only going to get bigger and better.