London top European city for tech unicorns
Written by Hannah McGrath
London continues to top the tables for investment in FinTech companies, with capital having the highest number of tech ‘unicorns’ in Europe.
Data comped by technology and investment advisory firm GP Bullhound for London &Partners found that London’s tech companies attracted £1.8 billion in venture capital (VC) funding, more than any other European City.
The capital has been the launch pad for 26 companies to achieve a $1 billion valuation since 2010, led by FinTech scale ups including Monzo, Revolut and Transferwise. This is more than twice the number of unicorns launched in rival tech hubs including Berlin and Paris.
Online fashion giant Farfetch and peer-to-peer lending platform Funding Circle are the most recent London-based companies to achieve unicorn status via Initial Public Offerings (IPOs) in 2018.
London is also leading the way for technology startup funding in areas including artificial intelligence (AI), cybersecurity and gaming. Last year Benevolent AI raised $120 million, while cybersecurity firm Darktrace raised $50 million.
In the last 10 years, London has seen 740 financial service firms setup an operation in London, creating over 25,900 jobs, according to the data. The report also showed that 822 companies classified as information and communications technology and electronics businesses have setup in London from 2008 to 2018, creating an estimated 27,000 jobs for the city’s economy.
GP Bullhound said the current growth trends for the FinTech and tech sector pointed to London being the starting point for a quarter of all new billion dollar companies founded in Europe in the next few years.
Manish Madhvani, co-founder and managing partner of GP Bullhound, predicted that increased venture capital backing could lead to London challenging the dominance of Silicon Valley over tech funding as Europe secure its first tech titan with a valuation of over $50 billion in the near future.
“London is the beating heart of the European tech scene, and it is great to see so many unicorns currently based here, along with several contenders that are likely to hit the status next,” he continued, adding: “Sectors such as artificial intelligence, which London is leading the way on, will help to secure the long-term success of the capital’s tech scene.”
Anne Boden, chief executive of Starling Bank added: "London has something that Silicon Valley never had: in addition to a thriving tech community and an entrepreneurial culture, it is also a big financial centre. This makes for a compelling combination – London's success as a fintech hub should enable it to spread wealth beyond the capital city throughout the UK and the wider economy.”