UK Startups Notch $8 Billion In Three Months

UK, brexit, britain, fintech, tech nation, funding

The technology industry in the U.K. pulled in almost $8 billion in funding so far this year, following a record-breaking $15 billion in 2020, Financial Times (FT) reported on Tuesday (March 16).

Tech Nation — an entrepreneur network backed by the government — said in its annual report about the tech sector that promising startups like Touchlight Genetics, Starling Bank and insurance provider Zego were valued at more than double the amount raised compared to the same time period in 2020. Five startups had valuations pegged at more than $1 billion in the first three months of this year, which is almost as many as there were in all of last year.

London largely dominated the technology sector, with an increase from 73 percent to 88 percent of total U.K. venture capital funding between 2018 and this year, according to the report.

The Tech Nation report highlighted security issues that could affect the tech industry as a whole as well as the region. Last year, 63 percent of VC money came from companies outside the U.K., something Tech Nation said could be cause for alarm regarding future national security, “with U.K. tech firms to become increasingly majority-owned by non-U.K. actors in the future, while also signifying a shortfall of late-stage domestic investors,” according to the report, per FT.

According to the report, 75 percent of funding rounds over $250 million last year included non-European or U.K. investors, which could be a sign that the issue affects larger and more established firms.

Great Britain regulators are working to preserve the FinTech industry in the U.K. from the lack of security that resulted from Brexit and escalating special purpose acquisition companies (SPACs) in the United States. 

A February report by British FinTech entrepreneur Ron Kalifa, the former head of Worldpay, indicated that British FinTechs hold 10 percent of the global market share. Some 71 percent of people in the U.K. use FinTech services every year.