State of play at the start of the year
Going into 2021, the UK technology market was strong. The industry continued to grow at the rapid pace that had seen it expand by a factor of ten over the previous decade, largely unaffected by the pandemic. With over 96 ‘unicorns’ (private companies valued at over $1bn), by the end of 2020 London had cemented its status at the front of the European pack and as the fourth-biggest tech city in the world.
The signs in the first half of the year have been extremely positive.
UK startups have already attracted £14.85bn in investment this year, more than the £12.1bn across the entirety of 2020.
7 new unicorns were created, just 3 less than China.
A seed funded European company now has the same probability of reaching unicorn status (roughly 1 in 100) as in the US.
Worldwide, VC funding has reached £211bn, a 95% increase on the first half of 2020.
A post-Covid-19 tech sector
More than any other sector, tech thrived during the pandemic. Rapid market shifts meant that many companies saw an explosion in their sales and customer bases, which they are now capitalising on. Lyst, a platform for direct high fashion sales, grew their user base 1100% during 2020 and recently raised $85m in a ‘pre-IPO’ round of fundraising. Their success is hardly isolated; e-commerce as a whole has been one of the strongest areas of tech growth, as consumer shopping overwhelmingly shifted online. In June, US online marketplace Etsy announced a £1.2bn deal to acquire UK competitor Depop.
UK start-ups have also been contributing towards innovation to combat COVID-19, reflecting a robust expansion in the healthcare tech market. London-based Vatic have raised £4.6m for its ‘KnowNow’ software and testing kits, which require only a mouth swab and are claimed to be more accurate than a lateral flow test. A further start-up, Huma, is providing Remote Patient Monitoring technology to the NHS to deal more efficiently with the backlog of non-COVID cases that have accumulated.
There has also been a wave of socially conscious tech start-ups with commendable missions. Bower Collective recently raised £2.1m in seed funding for a direct-to-consumer digital platform for sustainable home and personal care products, with the aim of eliminating plastic waste.
Even in those areas of tech heavily affected by the pandemic, optimism is returning. Barcelona-based TravelPerk, a business trip booking platform, recently acquired British rival Click Travel for an undisclosed fee, and TravelPerk CEO and co-founder Avi Meir states that “we expect to grow by 200% in 2022”.
Otherwise, fintech remains one of the UK’s leading growth industries, as before the pandemic. UK fintech is second only in international investment to the US. Even before Revolut’s mammoth $800m funding round last week, UK fintech had attracted $5.7bn of VC investment this year, breaking 2019’s record of $4.6bn. Revolut is now valued at £23bn, with 11m customers and 11,000 new accounts being added daily. Other rising stars include Wise, listed on the LSE earlier this month at £9bn, and SaltPay, who amassed $500m of funding.
Finally, worth special mention is Hopin, the biggest success story of the UK tech sector in the past year. Founded in 2019 and launching in 2020, by the end of 2020 the virtual events platform had gone from 4 employees to £2bn ‘double unicorn’ valuation, making it the fastest growing company in Europe. Hopin's breakneck growth shows no sign of slowing down, closing a $400m Series C funding round in March at a $5.65bn valuation.
I lead Camino Search, who specialise in placing finance professionals into tech & technology enabled businesses. In a booming sector, competition for the best talent is fierce, particularly given how valuable financial expertise and strategic nous are to companies seeking to maximise their growth and position themselves for unicorn valuation. We consistently place the best candidates into the best roles with our unrivalled industry understanding and deep network of contacts. For an informal chat about the market, or if you are interested in what Camino Search can offer you, get in contact today: