UK is behind only China and the US in creating ‘tech unicorns’

The Quartermile development in Edinburgh is home to one of Scotland’s ‘unicorn’ companies, Skyscanner.

Britain is behind only China and the United States in creating $1bn-valued ‘tech unicorn’ companies, new data shows.

The rate at which unicorns are being created in the UK is continuing to increase and since 2012 the UK has produced as many unicorns as Israel, Germany, the Netherlands and Sweden combined, a new survey from Tech Nation has revealed.

The UK leads Europe emphatically when it comes to venture capital investment in technology – with $35bn invested between 2013 and 2018, the study found, and in the past year, 13 UK companies have reached valuations of more than $1bn – the equivalent to creating a tech unicorn every month; this takes the total number of UK billion-dollar firms to 72.

More than a third of Europe’s fastest-growing tech companies are now based in Britain and only the US and China – with vastly bigger populations and resources – have done better than the UK.

London remains the acknowledged centre of Europe’s tech sector, producing 1 in 5 (21 per cent) of the continent’s fast-growing unicorns. The capital has produced 45 unicorns worth $148bn.

The figures were prepared for the government-funded Tech Nation – the national network for tech entrepreneurs – and the Government’s Digital Economy Council by

Digital Secretary Jeremy Wright said: “As entrepreneurs and investors arrive in the capital for London Tech Week, we must celebrate the achievements of the UK’s booming tech industry which is attracting record levels of investment and employing millions of people up and down the country.

“These brilliant figures show we are currently punching high in the global pecking order and, thanks to our strong fundamentals of skills and talent, business environment and world-leading research, the future is extremely bright.

“The tech sector is playing a crucial role in helping us deliver an economy that works for everyone through a modern Industrial Strategy for jobs and growth.”

Edinburgh is among the UK’s six cities – the others are Cambridge, Oxford, Manchester, Leeds and Bristol – that are home to at least two unicorn companies.

Bryan Dove, CEO, Skyscanner, said: “It’s never been a more exciting time to be a technology company in the UK. We are seeing more and more great businesses and that’s a testament to the quality and diversity of talented people living and moving to the UK. While Skyscanner is a global company, our roots are in the UK with 60% of our team based between Edinburgh, Glasgow and London. We’re lucky to be part of a thriving tech community in each of these cities: communities which demonstrate the strength of the sector across the nation.”

Stuart Lunn, CEO and Founder of LendingCrowd, said: “At LendingCrowd we are proud to be part of a burgeoning digital tech and fintech scene in Scotland. With a rich heritage of inventors, entrepreneurs and innovators Scotland has become a key hub for the UK digital tech sector, with Edinburgh being the largest UK fintech city outside of London.”

Notable investment rounds in the first five months of 2019 included Greensill, and Starling Bank in the fintech sector and Deliveroo and Ovo Energy. The funding pipeline shows little sign of stopping, with new venture capital funds raised reaching $3.5bn during 2018. The UK is also home to four out of five of Europe’s leading unicorn hunter venture capital funds.