UK tech shrugged off Brexit with record VC investment in the first half of 2017

Lynsey Barber
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Something to smile about: Investors are still attracted to UK startups (Source: Getty)

The UK's high-flying tech sector has shrugged of the fallout from Brexit notching up a record level of investment in the first half of the year.

And London retained its tech crown ahead of rival cities in Europe, fresh figures from London & Partners and Pitchbook reveal.

In the first six months of the year, more than £1.3bn was ploughed into UK tech by venture capitalists, and £1.1bn of that in London alone - more than any other six month time period over the last decade.

Read more: Brexit has put foreign workers off coming to work in UK tech

“For a technology business looking to raise growth capital and scale, investment can come from anywhere in the world, but London is a great place to be located," said Herman Narula, chief executive of startup Improbable, which boasted the biggest deal of the last six months.

"London provides access to the UK's tremendous tech talent, and is also an attractive place to work for the global talent vital to growing a tech business."

It raised $500m (£388m), led by Softbank's London-based Vision Fund in May, while other large deals included £82m for Funding Circle.

Investment in the six months to June was up 86 per cent on the same period last year when Brexit worries caused investors to pause. But it was also up nearly 60 per cent on the first half of 2015.

The mega-funding of Improbable did push the figures higher, but without it, investment was still up 23 per cent on last year and four per cent on 2015.

In the 12 month since the Brexit vote in June last year, London has attracted £1.8bn in venture capital cash - more than other cities hoping to rival the capital, including Berlin, Dublin, Paris and Stockholm.

Investment in the tech across the UK since the EU referendum was more than double its nearest rival, Germany, at £2.4bn.

"The Brexit vote has understandably created some uncertainty but it is no surprise to see that London continues to attract more than double the amount of investment than any other European city," said London & Partners chief executive Laura Citron.

“The fundamental strengths of London as a centre for technology and business have not changed and we have everything companies need to be successful: policy makers, finance, infrastructure, world-class universities and talent. This year’s record investment levels show that London’s tech sector continues to thrive and remains open to investment from all over the world.”

Entrepreneur George Bevis, whose fintech startup Tide this week announced it had raised $14m from investors, told City A.M. the Brexit vote had not deterred investors considering the international ambitions of the business. But he raised concerns, as have others, over the sectors ability to attract talent.

"The real risk to London is that if we don’t come up with good settlement on human capital it [the UK] could become a bad place to run a business," he said.

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