London retains crown as Europe’s leading hub for tech investment

Global tech investors continue to put their faith in London, with latest end of year VC investment figures from Dealroom and London & Partners showing that the UK capital’s tech firms raised an impressive £16.21bn last year.

Despite a challenging economic climate, London’s tech firms raised double the amount of investment than any European city in 2022 and ranked fourth on the global stage.

London helped boost the total amount of VC funding secured by UK tech firms in 2022 to £24.48bn, making it the third largest country for tech investment behind the US and China. Some of the biggest funding rounds into London companies last year included: a £0.82bn Series D round for Checkout.com; a £255.47m Series G round for Go Cardless and a £163.77m Series D for Paddle.

The future investment landscape for London and UK companies remains optimistic with further analysis from Dealroom revealing an increasing volume of growth capital being added by VCs to new funds in London.

The total amount of fresh capital raised by London-based VCs in 2022 was £5.40bn, more than any previous year. This takes the overall total raised in the past years (2021 and 2022) to $9.3bn.

Some of the world’s largest investment firms have established new funds or a presence in London in the past year. Significant new funds based out of London include a $1bn early-stage fund from Northzone, a £532.24m European investment fund from Atomico and a £409.41m fund from Phoenix Court, whose funds include LocalGlobe and Latitude.

A number of London’s fastest growing tech sectors managed to buck the overall downward funding trends in 2022, with over 10 different sub sectors raising over £409.41m.

Laura Citron, CEO of London & Partners said: “London’s tech sector is looking resilient, despite the challenging context. Investors have raised more capital to deploy into high-growth companies than ever before.

“Innovation in London continues to be grounded in the city’s deep historic strengths so we see sectors like Fintech, EdTech and gaming thrive. 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.”

Chris Bischoff, managing director, General Catalyst added: “When General Catalyst decided to open a European office after investing in the region for over a decade, London was our first choice.

“Long a centre for innovation in financial services, the capital has developed a broad-based ecosystem with leadership across sectors including enterprise, healthcare and life sciences, as well as pioneering work in AI. Beyond that, it remains a hub for European talent.”

By Mark Adair – Correspondent, Bdaily

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