Techxit? UK is the exit capital of Europe for tech startups

Lynsey Barber
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Deal activity grew at a faster pace in the UK than US over the past 12 months

London is the European capital for exits in the technology sector with more deals involving startups from the city than the next six top cities in Europe combined, including Berlin and Paris.

The UK as a whole was found to be second only to the US for the number of exits since 2010, with 1,234 valued at $95bn according to research from advisory firm Mind the Bridge, Crunchbase and law firm Orrick, Herrington & Sutcliffe which tracked more than 15,000 startup exits globally.

The US stands at the front of the ranking with 8,704, but the UK was also far ahead of European rivals. Germany and France were the next closest with 434 and 321, respectively - almost a third fewer.

Read more: The UK is still a driving force in tech M&A despite Brexit

"The gap from the UK to other European is almost as frightening as the gap from the UK to the US," the report noted. "Europe is catching up but the gap remains huge and is not going to be closed in the near future," said Mind the Bridge chairman Alberto Onetti.

However, deal value and volume grew at a faster pace across Europe than the US over the past 12 months. M&A volume grew at a rate of 30 per cent on the previous year in the US, compared to 61 per cent in the UK, while value grew by 10 per cent versus 51 per cent, respectively.

Read more: Flurry of global M&A activity on the horizon for remainder of 2017

And the value of deals in Europe hit a total of $112.3bn in the 12 months to the end of July, up from just $2.5bn in 2012, an "important sign of the value, speed of development and strength of European startups," said Orrick's Europe desk co-chair in San Francisco, Olivier Edwards, "even if the gap with US is still huge".

European startups were also found to exit at a later stage than US counterparts - nine-years-old versus eight - and with less capital raised, $113m versus $145m, as well as fewer staff.

Meanwhile, the number of tech M&A deals worldwide grew at its fastest rate since 2011, up 42 per cent year on year for the 12 months to the end of July, however, the the value of deals remained largely flat, growing at a rate of just two per cent.

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