Investors haven’t stopped putting money into London startups, despite the looming threat of Brexit. Since the turn of the year, venture capitalists have invested £395 million in firms based in the capital, up from £245 million in the preceding three months.
Read more: Europe's hottest startups 2016: London
Since the referendum to leave the European Union, London tech firms have received more than £1 billion in funding, over 70 per cent of the total £1.59 billion invested into UK tech during that period.
The favourite sector for VC money is, as ever, fintech. Big recent deals for Funding Circle (£82 million), Monzo (£22 million) and Currency Cloud (£20.27 million) mean financial services suck up 44 per cent (£177 million) of the available investment, taking the total VC investment in the past five years to more than £2 billion.
Other popular sectors include mobile and software-as-a-service, according to the data compiled by the founders of London Tech Week from VC-tracking website Pitchbook. The fastest growing sub-sectors for investment are robotics and drones, which grew a gigantic 30,500 per cent in the first three months of 2017, and big data, which grew 2,602 per cent in the same period.
The findings echo recent data released by Dealroom.co, which showed that UK-based startups raised £818 million in the first three months of 2017, a slight dip year-on-year, but an increase on the rest of the year.
Similarly, an analysis last week of 44 global cities by accountancy firm Deloitte rated London joint top alongside Singapore, although it did warn that “more national and international fintech companies will move to Frankfurt,” as Brexit changes, such as the displacement of EU regulatory bodies, come into effect. Read more: Europe is leading the way in AI and machine learning (and even Silicon Valley wants in)
One London success of the past twelve months is artificial intelligence startup Magic Pony, acquired in June 2016 by Twitter for a reported $150 (£102) million. “Clearly VC funding is an interim measure of success at best, but it's very unusual to build global-scale technology companies without VC funding, so it's an encouraging sign,” says Matt Clifford, of Entrepreneur First, the Bermondsey-based accelerator which helped create Magic Pony.
Of course, VC money is no guarantee of success – and, with a few notable exceptions, London startups have not always been able to convert large funding rounds into lasting success. “We're looking forward to some of these investments turning into large, independent companies in a few years,” says Clifford. Whether London will be the same at that time remains to be seen.
This article was originally published by WIRED UK
