London is second only to Silicon Valley for the best place for startups to thrive, according to a definitive ranking of the world’s major tech and business hubs.
The capital tied with New York in second place to the Californian area synonymous with billion-dollar valuations and tech bros – and far ahead of the next European city on the list, Paris, at 12th.
The global startup ecosystem report from Startup Genome ranks the leading 140 startup ecosystems globally, and calculated the value of London’s startup economy at more than $142bn.
Finance from the City and other investor streams proved vital to London’s high ranking, with the capital singled out as one of the best cities for access to funding, the number of local investors, investor experience and total funding levels.
London has already seen record levels of venture capital tech investment this year, with the UK capital’s tech startups receiving $13.3bn in the first seven months of the year so far eclipsing, more than the $10.9bn raised in the whole of 2020.
The average seed funding round in London is $653,000, ahead of the global average of $494,000, thanks in part to the sheer number of VC firms that call the capital home – 1,370.
Eileen Burbidge, partner at London VC firm, Passion Capital, said the report’s ranking made clear that “London’s tech sector will continue to compete and be a leader on the global stage”.
“London attracts and is home to so many investors and so much investment capital because of its world-leading ecosystem and remarkable entrepreneurs. With world class tech talent and sector expertise, London has an abundance of innovative entrepreneurs, start-ups and scale-ups which generate long term value accretion.”
Poppy Gustafsson, the City A.M. Award winner and boss of newly-floated tech darling Darktrace, said access to talent and researchers also made London and obvious choice for startups looking to grow.
“Being part of the UK’s tech ecosystem affords us access to a vast network of investors, researchers and talent and has been instrumental in building a successful AI business and – in particular – advancing our leading position in self-learning AI,” she said.
Startup Genome’s report identified fintech as a particular strength of the capital, but also lauded edtech as a winner of the changes that came from the Covid lockdowns. London is home to one of the largest edtech ecosystems in Europe, with an estimated value of $3.4bn as well as over 170 VC-backed edtech startups, the report found.
Mayor of London, Sadiq Khan said: “London is a fantastic place to grow and scale a global tech business. We celebrate the diverse, international nature of our tech ecosystem and it is great to see our thriving start-up community being recognised in this report.
“London’s tech sector has a pivotal role to play as we rebuild from the pandemic, and I am excited to be part of London Tech Week to discuss how our tech community can work with other start-up hubs to solve global challenges. In the face of Brexit and the global pandemic, London has demonstrated its resilience and proven itself once again to be one of the best places globally for tech innovations and start-ups.”.