London’s unicorns: City’s tech start-ups are bringing in the big bucks
London’s tech start-ups have had a turbulent 2022. But while some of the original tech players in the city have struggled with rising costs and depleting revenues, newer unicorns are making moves.
Here are the five London start-ups that made their mark this year, and are to be watched out for in 2023.
Valued at nearly £4.5b, London based FinTech firm OakNorth provides business and property loans to small and medium sized businesses. The company has bankrolled over £8b towards UK entrepreneurs and regularly provides multi-million dollar loans to firms and industries in the city.
In December they completed a £9.8m loan to Belgravia and Pimlico based luxury hotel and in November, they financed a security door manufacturer with over £14m. Focused on supporting local businesses by “shaking up banking”, co-founder Rishi Khosla and CEO was quoted saying “It has been an incredible journey over the last few years but we are just at the beginning.”
Raising $85m (£70m) at a $1.2b (£1b) valuation, Marshmallow Insurance announced themselves as UK’s latest tech unicorn in July 2022. Authorised by the Gibraltar Financial Services Commission, the company is a Gen Z spin on insurance. The company underwrites affordable car insurances and was co-founded by brothers Oliver and Alexander Kent-Braham and David Goaté.
At the beginning of the year, they had sold over a 100,000 policies in the UK itself with their valuation growing fourfold. In five years of operation, the city based tech start-up has grown in both valuation and consumer trust.
Oliver Kent-Braham, Co-founder and CEO of Marshmallow was quoted saying “Customers are voting with their feet – and they clearly want a modern insurance offering. We’ve only just scratched the surface of disrupting a market worth $5trn globally.”
While Deliveroo and Just Eat have been scaling back global operations, London based recipe box service Gousto catapulted to unicorn service. At the beginning of the year, the recipe box delivery app secured additional £116m in new funds in a deal that combines equity financing from SoftBank (£77m) and debt financing from HSBC and Barclays (€44 million). The food tech unicorn now has a valuation £1.32b.
The company cashed in on the post pandemic boom in home cooking and capitalized on making convince and access in their recipe selections. Headquartered in Shepherd’s Bush, London, the company was founded by Timo Boldt and James Carter. Boldt was awarded the EY entrepreneur of the year in November, and on receiving the award said that it recognised “the work, passion, commitment, customer focus, focus on impact, ownership and integrity of everyone working here at Gousto.”
Valued at nearly £8b, SumUp has survived some serious turbulence in the FinTech sector in 2022. Despite the tech sector taking a severe beating with the global market decline, SumUp raised nearly £600m in June 2022. Used by small and medium businesses for its card payment terminals, the tech unicorn has steered clear of massive downturns in its decade of operations.
The company which was founded and headquartered in London, is on course to be the largest point of sale solution provider in Europe according to a November press statement. SumUp co-founder Marc-Alexander Christ was quoted saying,“SumUp has consistently delivered cutting edge technology, which supports and serves the global small and nano business community….Innovation is at our core, and SumUp is very proud to support over 4 million merchants around the world.”
In October, metaverse platform building company, Improbable closed a $100m (£82m) seed round. This brought the London based simulation software brand to a valuation of nearly £2.5b. In the same month it announced that reveneue was up by 60 per cent, amounting to £30m.
While tech and software companies have been on a strained trajectory, Improbable has banked on providing services to the gaming sector to ensure smooth operations. However, Improbable has not scaled back on metaverse ambitions, and its latest lead investor is is Elrond, a blockchain platform for Web3 payments, DeFi and the metaverse.
Commenting on the year that was, CEO and co-founder Herman Narula said “In 2022, while we reshaped our business and improved our financial profile, we continued to add new technology capabilities such as crowd audio, diverse crowd rendering, and improved density up to 2 billion operations per second. We also developed new services tying Web2 and Web3 and will soon announce more.”