UK tech sector leads Europe with record levels of exits and surging investment.
Tech Nation and Dealroom, a data analytics company, published figures at the end of 2018 that point to the UK tech sector leading Europe with record levels of exits and surging investment.
What are Exit strategies?
Venture capital (VC) investors may decide to sell their investment and exit a company. Alternatively, the company’s management can buy the investor out (known as a ‘repurchase’).
The new figures have shown that the tech sector in Britain continued to out-perform the rest of Europe this year by attracting $7.9bn (£6.3bn) in venture capital investment.
Start-ups in the UK accounted for more than a third of sales, initial public offerings and mergers across Europe, with $40bn worth of exits being made this year alone.
The report says the success follows the flotation of UK-based, venture-backed “unicorns” such as online luxury retailer Farfetch and fintech company Funding Circle. Also, sales of significant companies such as property site Zoopla to US venture capital firm Silver Lake for $3bn.
The UK is appealing for investors.
The UK also proved to be more appealing to investors searching for the next big tech company, attracting £6.3bn ($7.9bn) in venture capital investment in 2018. Germany and France came second and third, drawing in $4.6bn and $4.4bn of investment respectively.
The UK has tallied up more exits than all other European countries for five successive years, making $119bn worth of sales since 2013, indicating growing confidence in the UK’s tech sector.
the tech industry as a whole showed 75pc higher productivity than the rest of the UK economy.
Gerard Grech, Tech Nation’s chief executive, said: –
“This has been another great year for the UK digital tech sector which continues to show that this nation is a digital tech powerhouse, attracting more money from venture capital than any other country in Europe.”
“Businesses that were started here are scaling to become global success stories, as the level of large funding rounds and successful IPOs demonstrates.”
The UK’s lead and significant activity in countries like Sweden, where music streaming business Spotify pulled off a $29bn initial public offering (IPO), meant signs started to emerge of Europe closing the gap on the US in terms of exits.
According to the research, The US made $136bn worth of exits in 2018, while European sales and IPOs added up to $107bn.
Tom Blomfield, co-founder and chief executive of UK fintech company Monzo, said the UK has an abundance of “talent, ambition and tech-knowledge” that can help build “truly global businesses”.
According to digital secretary Jeremy Wright, the statistics identify the UK as “Europe’s undisputed tech hub”.
“The success is thanks to our unique combination of talent, location and language, alongside our business friendly environment, unrivalled access to capital and world-leading universities,” he said.
“We want to see the power of technology change people’s lives for the better.”