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World tech traders proceed to place their religion in London, with newest finish of yr VC funding figures from Dealroom and London & Companions displaying that the UK capital’s tech corporations raised a formidable $19.8bn final yr.
Regardless of a difficult financial local weather, London’s tech corporations raised double the quantity of funding than any European metropolis in 2022 and ranked fourth on the worldwide stage.
London helped enhance the whole quantity of VC funding secured by UK tech corporations in 2022 to $29.9bn, making it the third largest nation for tech funding behind the US and China. A few of the greatest funding rounds into London firms final yr included: a $1bn Sequence D spherical for Checkout.com; a $312m Sequence G spherical for Go Cardless and a $200m Sequence D for Paddle.
In keeping with the information, 2022 world VC funding skilled a 33% dip from the document ranges seen in 2021, with a complete $485.2bn raised final yr, in contrast with $723bn the earlier yr. This development was replicated at a European degree, with a complete of $94bn raised in 2022 – a 22% decline on the $120.8bn raised in 2021.
Excessive ranges of dry powder increase in UK capital
The long run funding panorama for London and UK firms stays optimistic with additional evaluation from Dealroom revealing an growing quantity of progress capital being added by VCs to new funds in London.
The whole quantity of recent capital raised by London-based VCs in 2022 was $6.6bn, greater than any earlier yr. This takes the general complete raised previously years (2021 and 2022) to $11.4bn.
A few of the world’s largest funding corporations have established new funds or a presence in London previously yr. Important new funds based mostly out of London embrace a $1bn early-stage fund from Northzone, a $650m European funding fund from Atomico and a $500m fund from Phoenix Courtroom, whose funds embrace LocalGlobe and Latitude. Moreover, the likes of Sequoia Capital, Lightspeed Ventures and Basic Catalyst have all lately expanded their presence within the UK capital.
Sturdy efficiency for London’s excessive progress sectors
A lot of London’s quickest rising tech sectors managed to buck the general downward funding traits in 2022, with over 10 completely different sub sectors elevating over $500m.
In keeping with the information from Dealroom, London’s Edtech, Cybersecurity and gaming sectors all raised extra funding in 2022 than 2021. Main funding rounds in these areas included: a $220m Sequence D spherical for London-based EdTech supplier Multiverse and a $112m funding into immersive and gaming firm, Unbelievable.
London’s fintech sector additionally noticed a robust efficiency in 2022, with the UK capital’s fintech corporations elevating a complete of $9.7bn – greater than some other metropolis globally. Along with seeing extra funding than the likes of New York and the Bay Space, London fintech’s accounted for 42% of the whole funding into all European fintech final yr.
London reveals progress in affect tech funding
One other sector displaying promising indicators of future progress for London is affect tech – firms that put at the least one of many UN’s sustainable improvement objectives on the coronary heart of their mission.
London’s affect tech firms raised over $2bn in VC funding final yr and now accounts for greater than 10% of all London VC funding for the primary time.
The town’s local weather tech firms had been a giant driver of that progress, with London local weather tech companies elevating $1.5bn, up by 17 occasions previously 5 years and greater than some other yr besides from 2021 ($1.9bn). These numbers embrace a $135m founding spherical for vertical farming firm, GrowUp farms and a $225m funding into renewable power supplier, Octopus Power.
Laura Citron, CEO of London & Companions mentioned: “London‘s tech sector is trying resilient, regardless of the difficult context. Traders have raised extra capital to deploy into high-growth firms than ever earlier than. Innovation in London continues to be grounded within the metropolis’s deep historic strengths – so we see sectors like Fintech, EdTech and gaming thrive. This information reveals that London continues to be Europe’s tech capital and probably the greatest locations on this planet to scale a tech enterprise.”
Verify Warner MBE, Associate, Ada Ventures, co-founder Variety VC mentioned: “Even in a difficult macroeconomic local weather London’s place as a number one hub globally for tech funding stays unchallenged. Not solely that, however there are robust indicators that London will stay one of many main cities on this planet for expertise for many years to return, with a document $6.6bn of VC raised by London-based VCs in 2022. With VCs and Restricted Companions more and more targeted on the significance of fine social, environmental credentials and robust governance, London’s management within the affect funding area makes it arguably the perfect metropolis on this planet to begin and scale and impactful expertise firm. At Ada Ventures we’re excited in regards to the alternative to put money into the unbelievable, mission pushed entrepreneurs who’re constructing their firms on this metropolis through the years to return.”
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