16 June 2020

The UK tech industry received another boost last week with the announcement of a Future Tech Strategy, a range of measures designed to boost long-term growth and aid the industry's immediate recovery from COVID-19.

The Future Tech Strategy is a cross-departmental collaboration with the Department for International Trade and the Department for Digital, Culture, Media and Sport.

The measures, which were unveiled at London Tech Week, include the launch of an £8m Digital Trade Network for Asia Pacific and the launch of a new fintech campaign in the UK. The full range of measures can be read in the UK Government's press release here.

The strategy should be a welcome addition to the support for the UK tech sector and indicates the UK Government's continued commitment to championing one of the UK's modern success stories. Both start-ups and scale-ups should now have increased exposure to grow internationally and further challenge Silicon Valley as a hub for successful technology companies.

The future tech strategy comes as new data published by Tech Nation and Dealroom shows that UK tech companies had an impressive first six months of 2020 raising $5.3bn in total, which included 15 rounds of $80m or more. The numbers don’t yet show significant changes year on year on the record level of investment received in 2019, but the report correctly points out that as venture capital (VC) deals tend to take months to complete, it might only be the H2 2020 data that shows the effect of COVID-19.

Some further key takeaways from the UK tech update report:

  • UK VC funds have raised over $10bn in the first half of 2020, almost half of the $22bn raised by European VCs.
  • At a city level, London-based start-ups have raised more in 2020 than Paris, Berlin, Stockholm and Tel Aviv combined.
  • The past 12 months has seen seven more UK companies reach unicorn status (a valuation of at least $1bn) meaning the UK continues to lead Europe by this metric and also by the number of future unicorns (a valuation between $250m and $800m).
  • 90,000 tech jobs were still being advertised at the end of April with the UK tech industry looking to add to the 2.93m people it currently employs across the UK.

The data shows that despite COVID-19, UK tech remained an attractive investment opportunity in the first six months of 2020. Year-end data may reflect the May and June trend we have seen of VCs focusing more on their existing portfolio than new investment opportunities. There is hope however that with UK VCs sitting on a record level of investment-ready funds, the year-end data will also show some of that 'dry powder' has been put to use in the UK tech industry.

The UK tech update report can be downloaded and read in full here.

If you are looking to raise funding or would like to discuss the market more generally, please contact Danny Lee, Partner, or Niall Mackle, Solicitor, in our Corporate Finance team.

Key contact

Danny Lee

Danny Lee Partner

  • Mergers and Acquisitions
  • Private Equity
  • Joint Ventures

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