London beats Euro rivals to retain tech investment crown (yes, despite Brexit)
London sailed past European rivals to retain its crown as the top destination for tech investment last year as nearly $20bn was pumped into the capital’s start-ups, new data has revealed.
Tech firms in London attracted $19.8bn of venture capital in 2022, some $10bn more than Paris and over $14bn more than tech firms in Berlin, data from Dealroom and London & Partners showed.
The chasm between the cities came despite London investment tumbling from $27.5bn raised in 2021, amid a wider global slump in investment brought on by sharp interest rate hikes and the shock of Russia’s invasion of Ukraine.
Global VC funding experienced a sharp 33 per cent fall from the record levels seen in 2021, when investors pumped $723bn into tech business in a post-pandemic fundraising frenzy.
Laura Citron, boss of London & Partners said the City’s tech sector was “looking resilient, despite the challenging context”.
“Innovation in London continues to be grounded in the city’s deep historic strengths – so we see sectors like Fintech, EdTech and gaming thrive,” she said.
“This data shows that London continues to be Europe’s tech capital and one of the best places in the world to scale a tech business,” she added.
The surge in funding was led by a $1bn series D round for London payments firm Checkout.com as well as bumper rounds for GoCardless and Paddle, who raised $312m and $200m, respectively.
Dealroom analysts said the venture landscape across Europe looked positive despite the tricky economic conditions, as VC investors sat on hefty piles of dry powder raised prior to the downturn.
Check Warner, a partner at Ada Ventures, said: “Even in a challenging macroeconomic climate London’s position as a leading hub globally for tech investment remains unchallenged.
“Not only that, but there are strong indicators that London will remain one of the leading cities in the world for technology for decades to come, with a record $6.6bn of VC raised by London-based VCs in 2022,” she added.
The predictions come despite a marked downturn in VC activity in the final quarter of the year as investors opted to sit out the turbulence in the market.
Global fourth-quarter fundraising came to $77bn – down six per cent on the previous quarter and 59 per cent year over year – the lowest since the first quarter of 2020, according to data from Crunchbase.