In mid-March, Tech Nation published the 2021 edition of their annual report. Now in its seventh year, this report (which you can read in full here) reveals how the UK tech sector has changed, as well as its top performers, its challenges and its opportunities in the year to come. If you’re an investor in the tech sector – or you’re considering investment opportunities in the sector in the future – read on for this year’s highlights…
UK ranks third in the world – and growing
The report reveals that UK VC tech investment reached a record high of $15bn in 2020, ranking it third only behind the US and China. What’s more, this investment is growing significantly. UK deep tech investment showed the highest global growth at 17%, with VC Net Zero and transport tech also both growing by 160% over the course of the year. While investment was lower in the first half of the year, it picked up again in Q3, and hit a record quarterly level in Q4.
Which tech sectors are performing the strongest?
In the UK it’s fintech that is performing the most strongly, garnering $4.5bn of VC investment in 2020. Health, enterprise software, transportation and marketing round off the rest of the top five sectors. The three biggest sector increases in 2020 were transportation, security and energy, which grew by 120%, 66% and 20% respectively.
The UK ranks second in the world for fintech investment, and third globally for impact tech investment – a sector that has grown by 160% since 2018. Throughout Europe, in fact, investment in impact tech is strong, now accounting for 15% of VC investment and having grown 3x in the last ten years.
Tech IPOs show strong consumer appetite
In 2020, 40% of all capital raised by London Stock Exchange IPOs came from consumer internet and tech firms which, as the report says, demonstrates “strong consumer appetite for the sector”. The total value raised was £3.1bn, compared with £2.4bn in 2019, and the THG IPO of 2020 was the UK’s largest ever for ecommerce. What’s more, London’s tech sector outperformed the FTSE All-Share in 2020 – again, demonstrating not just current investor appetite, but also growth potential. As the report’s authors state, “UK tech pioneers are creating the future”. Read the full report to learn more.
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