Another record year for venture capital investments in London tech

A report by London & Partners and Dealroom.co, reveals 2021 was another record year for venture capital investment into London’s tech firms.

2021 saw a large increase in megarounds ($100m+ rounds), an unprecedented number of exits and more new unicorns than any previous year. The UK capital’s tech firms raised an all-time high of $25.5bn in VC funding, 2.3x investment levels in 2020, against a backdrop of record global ($675bn) and European ($115bn) VC investment.

London ranked fourth globally for VC investment in 2021, behind the Bay Area ($100.9bn), New York ($47.5bn) and Greater Boston ($29.9bn). Berlin was the only other European city to make it into the top ten list with $11bn in tech VC investment.

On a national level, the UK ranked fourth globally following another record year of funding ($39.8bn), behind the United States ($328.8bn), China ($61.8bn) and India ($44.6bn).

London is producing some of the fastest growing tech companies in the world, adding 20 new unicorns to its ranks in 2021, more than any other previous 12-month period. This takes London’s total unicorn count to 75, with new unicorns joining the pack in 2021 including insuretech disruptor Marshmallow, and SaaS company TrueLayer.

Additional findings also show that the enterprise value of London’s tech companies (founded since 2000) passed half a trillion dollars in 2021, growing 70% in value on the previous year.

Indications of the maturity of London’s tech sector are further boosted by a record year for the number of London-based tech firms exiting via IPO, SPAC or sale via acquisition, with the total enterprise value of exits of London startups at $88bn, up from just $3.5bn in 2020, a 25 times increase.

Laura Citron, CEO at London & Partners said: “London is now a truly mature global technology capital – we have big pools of later stage funding, nearly two new unicorn companies every month, and massive funding rounds and exits.

“This data shows that London is not only a brilliant place for entrepreneurs to start businesses, but also to grow them to a global scale. London has it all – capital, talent, customers, a supportive ecosystem and a fantastic place to live.”