London continues to be one of the top global destinations for tech companies looking to expand internationally, with fresh data from London & Partners showing the UK capital has attracted more new international tech companies than any other global city in the past decade.
Released to coincide with the upcoming 10th anniversary of London Tech Week (June 12-16th), the fresh data shows that since the event was founded in 2014, London has recorded more than 1,700 tech foreign direct investment projects – more than the likes of San Francisco and New York.
Despite a challenging global economic climate, London’s attractiveness as a top destination for international tech firms looking to setup an overseas operation remained resilient, with the latest data available showing that the UK capital ranked second globally for tech foreign direct investment in 2022. Last year, London attracted 175 new tech companies, more than Singapore (130), Berlin (101) and Paris (100) – and second only to Dubai (223).
Some of the world’s biggest tech companies continue to make long-term investments into London, with notable investments including: Google’s $1bn purchase of their Central Saint Giles office and the development of their new King’s Cross office; Apple’s new UK headquarters in Battersea, set to open this year; and one of Salesforce’s largest office spaces outside of the US at the Salesforce Tower in Bishopsgate. Recently, London has also seen international expansions from Indian AdTech giant InMobi, Chinese tech entertainment company, Tencent, and US fintech unicorn, Alloy.
London’s tech sector sees rapid growth over last 10 years
Since the launch of the first London Tech Week in 2014, London’s tech ecosystem has matured into one of the leading hubs for producing start-ups and scale-up companies. According to data from Dealroom, the value of London’s tech ecosystem has grown exponentially in the past 10 years from $70bn in 2014 to $621.5bn in 2023. The UK capital is by far the highest valued ecosystem in Europe, ahead of the likes of Paris ($247.6 bn) and Berlin ($153.6 bn).
The growth in value of London’s tech ecosystem has partly been fuelled by the UK capital’s ability to produce unicorn companies (tech companies valued over $1bn). To date, London has created 101 unicorn companies a significant increase than the 15 unicorns that were present in the city 10 years ago in 2014. This is more than any other city in Europe, including Paris (32) and Berlin (34). The most recent companies to join London’s unicorn club include: Quantexa, an AI company that recently raised a $129m series E funding round, EdTech company Multiverse and fintech company, Paddle.
The growth of London’s tech scene over the past 10 years is also demonstrated by the increasing amount of venture capital being put into London companies – a total of $107bn has been raised by London tech firms since the year London Tech Week was first founded. In fact, VC investment into London has increased by over 800% since then, with total funding reaching $22.4bn, compared to the $2.4bn in 2014. Leading global VC firms such as Index Ventures, Lighstpeed Venture Partners and Sequoia have recently established a significant presence or new funds in London.
London tech set for continued success based on strengths in high growth sectors
London’s tech sector is set for a bright future, with latest data showing that despite a global slowdown in VC investment, the UK capital continues to attract significant funding into technologies that are tipped for strong growth in the coming decade.
London has established itself as a world leader in fintech, with its fintech firms securing more investment last year than any other city. Funding into London fintech companies has grown rapidly in the past decade, increasing from $495m in 2014 to $9.9bn in 2022. In this time, London has created fintech unicorns such as Wise, Monzo and OakNorth Bank who have benefited from the city’s leading position as a top global financial centre and access to tech talent.
With some of the world’s leading universities and life sciences research facilities, London’s health tech sector has also seen strong growth. VC funding into London’s health tech companies has grown from $113m in 2014 to $1.5bn in 2022. London is home to over 165 VC funds specialising in life sciences and has produced exciting companies such as Accurx and Kherion Medical that are creating technologies to transform the healthcare sector.
As a city, London has set an ambitious target to become a net zero carbon city by 2030. This is encouraging lots of entrepreneurs to play their part and has resulted in the growth of a climate tech cluster in London including companies such as Octopus Energy, Newcleo, and Carbon Clean Solutions. Investment into climate tech companies in London has increased from $127m in 2014 to $1.9 billion in 20222.
This year marks the tenth anniversary of London Tech Week, since it was founded in 2014. London Tech Week has grown to become one of Europe’s largest festivals of technology and innovation. Over 20,000 attendees are expected to descend on London from June 12 to 16, including delegations of international businesses from over 50 different countries.
The Mayor of London, Sadiq Khan, said:
“Over the past decade, our tech sector has grown to become an international success story, creating jobs and economic growth for all Londoners. This is highlighted by these new figures showing London remains a top destination for the very best international tech businesses. The tenth anniversary of London Tech Week is a great opportunity to celebrate our recent successes and I look forward to another decade of growth for our city’s tech sector, resulting in a better, more prosperous London for all.”
Janet Coyle CBE, Managing Director for Grow London at London & Partners added:
“Over the last ten years London’s tech sector has not only established itself as the biggest tech ecosystem in Europe but one of the leading tech hubs on the global stage. London has matured from a burgeoning start-up hub to a place where you can also scale an international tech business. Our strengths in the development of cutting-edge technologies such as fintech, Artificial Intelligence and climate tech demonstrate that we are well placed to see strong future growth. We are looking forward to welcoming large numbers of international companies, investors, policy makers and entrepreneurs to London for this year’s London Tech Week to explore all the amazing growth opportunities our city has to offer.”
Debbie Weinstein, Vice President and MD, Google UK & Ireland, said:
“London is home to countless innovative businesses, a thriving creative industry and truly incredible tech talent. We’re proud to call this world leading city home and to be growing our UK presence here, with the $1bn purchase of our Central Saint Giles Office and the development of our King’s Cross Office. We’ll continue to invest in long-term partnerships in the capital to create new opportunities for Londoners in our local communities and beyond.”