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“A Bumper Year”: UK Tech Exits Topped $40 Billion in 2018, as EU Catches US

"When tech IPOs alone are counted Europe actually saw more than the US in 2018"

By CBR Staff Writer

UK tech startups raised $7.9 billion in venture capital (VC) in 2018, far ahead of regional competitors France and Germany – and over double that invested by VC firms in tech powerhouse Israel.

That’s according to new figures today from Dealroom and Tech Nation, which also revealed a landmark year for UK exits with sales, IPOs and mergers worth $40 billion; ahead of every other country in Europe.

Europe Catching Up with US

During 2018, Europe also closed the gap on the US in terms of exits of venture-backed companies.

The US achieved $136 billion of deals and IPOs in 2018, while European sales and IPOs added up to $107 billion, the report notes.

Read this: Silicon Valley Spends Record £1 Billion in UK’s Golden Triangle

Analysis conducted by Dealroom for Tech Nation and the Government’s  Digital Economy Council this autumn has shown that the UK now has six cities which have produced at least two “unicorns”, or startups worth over $1 billion.

(Outside London, Manchester, Leeds, Edinburgh, Oxford and Cambridge have all produced tech companies of growing significance.)

Sabby Gill, Managing director, UK & Ireland, Sage, said: “As one of the UK’s biggest software businesses, we are delighted to see a host of ambitious young technology companies being formed in this country, which is a melting pot of tech talent. I’m certain the UK has the knowledge and expertise to build one of Europe’s biggest tech successes, a real challenger that could become the next FTSE 100 tech company.”

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“Melting Pot” of Tech Talent: But for How Long?

Critics have warned a recent immigration whitepaper that set out the government’s stall on its post-Brexit immigration regime could stymie tech growth.

Julian David, CEO of techUK, this week noted: “The UK already faces a chronic digitals skills gap with unfilled posts rising by nearly a quarter since last year in the information and communication sector alone.”

He added: “Businesses are making significant investments to upskill their workforce and improve the pipeline, for example through the training of apprentices, but this will not happen overnight. We will always need to have access to global talent if we are to remain at the cutting-edge of new technologies.”

“A Bright Future

Others sounded a more upbeat note. Marcus Stuttard, Head of AIM & UK Primary Markets, London Stock Exchange, said: “The fact that Europe is closing the gap in exits and sales for venture-backed companies is exciting news and reflects a very successful year for tech companies and their investors. Indeed, when tech IPOs alone are counted Europe actually saw more than the US in 2018.”

“There is every reason to believe that there is a bright future for global technology companies from Britain and that they will be able to raise significant capital here. London IPOs this year, including businesses like Avast and Funding Circle, have shown that investors are certainly keen to access the growth offered by the tech sector.”

Landmark UK Tech Exits

Landmark 2018 UK exits included online luxury retailer Farfetch and gene therapy company Orchard Therapeutics, which both floated in New York.

Funding Circle, a peer-to-peer lending marketplace, floated in London and  significant tech sales included property portal Zoopla’s $3 billion sale to US VC firm Silver Lake.

 

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