One-fifth of all UK tech investment went to just 10 scaleup firms in 2020

by Jeremy

Ten technology scaleups received one-fifth of all UK venture capital (VC) investment during 2020 in a record-setting year for VC investment generally, according to the seventh annual Tech Nation report.

Investment into the UK tech sector hit $15bn in 2020 – $200m higher than the previous record set in 2019. This puts the UK in third place globally, behind only the US and China, which raised $144.3bn and $44.6bn, respectively.

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According to the report by entrepreneurial network Tech Nation, which looks at the state of the UK tech sector each year, startups’ and scaleups’ collective value has increased by 120% since 2017, and they are now worth $585bn.

Of the $15bn raised in 2020, about 20% ($3.5bn) went to just ten scaleups, eight of which are London-based. Only e-commerce business Gymshark and semiconductor manufacturer Graphcore are located outside the capital, in Solihull and Bristol, respectively. Seven of these firms – Octopus Energy, Arrival, Cazoo, Gymshark, infobip, Gousto, and Hopin – reached unicorn status in 2020, which means they are now each valued at more than $1bn.

Regarding which subsectors saw the highest growth, the report said transport technology firms enjoyed a 160% boom in VC investment in 2020, while impact startups – those addressing one or more of the United Nations’ Sustainable Development Goals – have seen a 160% increase since 2018. The report further noted that deep-tech investments into research and development (R&D)-intensive companies rose by 17%, the highest growth rate globally.

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