Thursday 8 July 2021 12:47 pm

London home to nearly a third of all Europe's tech unicorns

London is now home to almost a third of all tech unicorns across Europe as the capital continues to attract the continent’s top talent.

New data from Dealroom revealed there are 71 private tech firms valued at $1bn or more in London, a large chunk of the total 268 unicorns across Europe.

It comes after separate data revealed that the UK last month smashed through the 100 unicorn milestone for the country as a whole.

The figures also highlighted the surge in cash pouring into London’s booming tech sector as the capital cements its status as a fintech hub.

Venture capital investors injected $5.3bn into London-based fintech companies in the first six months of the year — an increase on all previous full year investment figures for London’s fintech sector and over 2.5 times more investment than any other European city. 

The figures revealed a sharp increase in access to late-stage funding for larger firms, with almost two-thirds of the $5.3bn raised so far this year coming from funding rounds of more than $100m.

Some of the largest deals involving London companies included a $478m Series C funding round for payments firm SaltPay, a $450m deal for payments unicorn company, a $350m Series D round for insurtech firm Bought by Many and a £322m Series D round involving some major institutional investors for Starling Bank.

The mega funding rounds will raise hopes for further tech floats in London after Wise debuted this week in the capital’s first ever direct listing.

The payments company was valued at £8bn when its shares began trading, but this has since surged to £9bn.

“It has been a brilliant start to the year for investment into London’s fintech sector, demonstrating the resilience of the sector and the importance of fintech to the city’s economic recovery,” said Allen Simpson, acting Chief Executive at London & Partners.

“Investors are showing real confidence in London’s fintech offering as well as in an ecosystem with a vibrant funding ladder, reinforcing the city’s position as a leading global fintech hub and a fantastic place to set up and scale a fintech company.” 

VC frenzy

Globally, venture capital investment has surged to an all-time high in 2021 as investors continue to pump money into tech during what has been dubbed the “year of startups”.

Since the start of the year more than €259bn (£221bn) has been invested globally, more than double the €114bn recorded in the same period in 2020.

While the US and China still dominate the rankings, Europe has been the fastest growing region for venture capital investment, attracting €48bn, according to new figures from Dealroom.

The surge in cash injections has sparked a boom in billion-dollar companies, with more than two unicorns created every day since the start of the year. This compares to a new unicorn created every two days in the first half of 2020.

The figures highlight the growing attractiveness of the tech sector for investors, particularly in the wake of the pandemic.

The growth has caused tech company valuations worldwide to balloon to over $35 trillion — a figure that dwarfs the US’ total GDP in 2020.

Mega rounds — where investment exceeds $100m — have also become more prevalent in the first half of this year, with these outstripping total seed to series C investments throughout the whole of 2020.

According to the data, there are now 170 cities around the world with at least one unicorn — 65 of which are in Europe.

Overall there are now 1,600 unicorns globally, of which 900 are yet to list. The US boasts almost half of these, while China is home to 280.

“Tech continues to be a major economic driver, attracting investment and jobs at a time when the rest of the economy slowed down as a result of the Covid-19 pandemic,” said Yoram Wijngaarde, founder and chief executive at Dealroom.

“Investment into startups are at an all-time high because investors see tech as a safe asset and innovation is continuing as entrepreneurs are identifying gaps in the market and are bulging with ideas. This is a huge vote of confidence in the global tech sector.”