Rising above the rest of Europe, UK tech businesses raised £24bn in 2022.
However, the second half of the year brought with it significant financial and economic uncertainty causing the total rise to fall short of the £29.4bn secured by UK tech businesses in 2021.
Despite the drop though, the £24bn adds a significant amount to the UK tech sector’s total funding over the last 5 years. Since 2017 UK tech sector has raised £97bn.
2022 in numbers.
This year, the UK was home to 85,000 tech startups and scaleups. Of the 144 UK-made unicorn businesses, 28 companies reached a $1bn private valuation in 2022.
A year of two halves.
The main portion of the funding came in the first 6 months, making this a year of 2 halves for tech businesses. In the first 3 months of the year, these tech organisations raised a record figure of £9bn.
During this time, the UK overtook India and China for tech investment. It was only the US who fronted them
Following this, in the first 5 months of 2022, UK tech companies raised a combined figure of £12.4bn.
Not quite as abundant, the latter 6 months saw slowing growth in global public markets. Financial uncertainty and rising interest rates created hesitancy among investors who were more cautious and less willing to part with their cash.
KPMG cites that Venture Capitalists invested £4bn in UK businesses during Q3, down from the £8bn invested in Q2. It was also the lowest level of investment since Q3 in 2020.
2023.
The UK digital minister Paul Scully is optimistic for the year ahead. He says, “UK tech has remained resilient in the face of global challenges” and that the UK is “one of the world’s leading destinations for digital businesses.”
Indeed, the UK tech industry was valued at £1trn earlier this year. In good company, the UK sits alongside China and the US as one of the only three regions to have earned such a valuation.
His optimism isn’t unfounded and 2023 looks promising. A recent survey of investors that provide capital to VC firms has shown that they plan to increase their allocations for UK tech in the next year. There will still be plenty of money for startups despite the difficult and uncertain economic landscape.
Are you looking to build out your tech teams in 2023?
We can help.
Reach out today. We’d love to tell you about how we work.