London was hailed a start-up technology (tech) hub earlier this year and its status is set to rise even further after reports that start-ups in the capital city have received record levels of investment during 2014. The Financial Times (FT) reports that tech start-ups in London have received more than $1bn in funding so far this year and venture capitalists believe that the city will produce major digital companies in the future.
According to the FT, research from London & Partners, a group funded by the Mayor of London’s office shows that tech groups in London have raised $1.021bn in venture capital funding during the first three quarters of 2014 which is around 30 per cent higher than the $710m raised in 2013. This figure is 10 times more than the figure raised in 2010 and shows that the tech scene is being greatly invested in.
According to the FT, Elieen Burbidge (Partner, Passion Capital) believes that technology is growing and is attracting more investment worldwide. Passion Capital is a London-based venture group that has invested in local start-ups, Thread, GoCardless and DueDil. Burbidge believes that London is gaining a greater share within the technology sector on a global level which makes sense because London is a diverse city with a depth of talent, and is hub for financial markets. Burbidge also mentions the emergence of major tech groups in London, such as Just Eat (fast food delivery portal) and Zoopla (property listings website) which both had public valuations of around £1bn this year.
London is home to more than 3,000 fledging tech groups and in the fintech space, start-up accelerators have sprung up all over London with programmes such as Startupbootcamp, Innotribe Startup Challenge and Level 39 providing the perfect platform for fintech start-ups to gain funding and recognition.
According to the FT, only three London-based companies completed funding rounds worth more than $50bn in 2014; Takeaway.com (food ordering company), Farfetch (fashion etailor) and Funding Circle (peer-to-peer lending company). This investment is only usually achieved by Silicon Valley companies on their way to billion dollar valuations.
The amount of funds being poured into London’s tech start-ups indicates where venture capitalists believe future innovation will come from and after Google’s announcement in July that it was creating a European arm of its venture capital fund, to be headquartered in Clerkenwell, London near to the Silicon Roundabout, (home to many fledging tech groups) it’s not surprising that many more companies are heavily investing in the capital city and that London start-ups are the ones to watch.
By Nicole Miskelly, bobsguide Lead Journalist