United Kingdom
London
"London is more than just a city ecosystem — it’s a world-leading tech investment hub that flies the flag for the whole of U.K. tech. Although other U.K. cities are charting their own courses to ecosystem maturity, London will always be an important center of excellence."
Highlights
Despite the ongoing impact of Brexit, the repercussions of the war in Ukraine, and a difficult economic climate, London remains Europe’s leading tech ecosystem hub. The value of U.K. tech companies reached over $1 trillion in 2022. The U.S. and China are the only other countries to reach this milestone. London tech firms attracted $19.8 billion in VC funding in 2022. This is double the amount of investment raised in any other European city and the fourth largest amount of any city worldwide. According to the Startups 100 Index, London startups receive an average of £15 million in early-stage investment, around eight times the U.K. average.
London is home to nearly 70% of the U.K.’s private equity and VC investors. Recently launched London-based funds include a $1 billion fund from Northzone, a $650 million fund from Atomico, and a $500 million fund from Phoenix Court. Sequoia Capital, Lightspeed Ventures, and General Catalyst all recently expanded their presence in London. The Dell Technologies Women Entrepreneur Cities Index 2023 declared London the best city in the world for female entrepreneurs.
In May 2022, social enterprise builder Zinc announced the first close of its £33 million fund to support diverse entrepreneurs. Launched in January 2023, 100x Impact Accelerator nurtures high-potential social enterprises. The UK-India Startup Launchpad fosters deeper collaboration between the two nations’ startup scenes. A Smarter London Together is an ongoing roadmap from the Mayor of London to make the capital the smartest city in the world. London Tech Week is a must-attend annual event on the global tech calendar.
Ecosystem by the Numbers
Sub-Sector Strengths
Cleantech
London has Europe’s highest concentration of Cleantech startups, with 353 calling the capital home. In January 2022, London set a goal to become a zero-carbon city by 2030 and a zero-waste city by 2050. Cleantech London links companies with investors. Launched in June 2022, Kiko Ventures is a $450 million platform to invest in the next generation of Cleantech innovators. Announced in February 2023, Cleantech for the UK is a collaboration of Cleantech investors and entrepreneurs supported by Bill Gates’ Breakthrough Energy.
Fintech
London’s Fintech firms raised a total of $9.7 billion in 2022, more than any other city globally. In December 2022 EY announced the launch of its first Fintech lab in London. EY is also launching a Fintech growth program aimed at early-stage and growing businesses. Fintech Week London 2023 took place in June. Digital payment services provider Checkout.com raised a $1 billion Series D in January 2022, more than doubling its valuation to ~$40 billion. In June 2022 card reader company SumUp raised €590 million. In March 2023, consumer loans startup Abound raised over £500 million.
AI, Big Data & Analytics
As of 2022, London is home to 1,300 AI companies. The sub-sector has grown on average 48% year-on-year since 2016. U.K. GDP will be up to 10.3% higher in 2030 than 2022 as a result of AI, according to estimates by London & Partners. The U.K.’s Spring Budget 2023 allocated £900 million for the establishment of an AI Research Resource and the creation of an “exascale” supercomputer. The budget also calls for a new AI sandbox.
Reasons to Move Your Startup to London
Leading Tech Talent
Over 58% of the workforce is educated to at least degree level. London is home to three universities in the global top 40: Imperial College, the London School of Economics and Political Science, and King’s College. LSE was named Outstanding Entrepreneurial University at the Times Higher Education Awards. The U.K. government offers a scaleup visa for businesses to sponsor highly skilled tech workers for two years.
Business-Friendly Environment
London has a lively funding scene with startups here raising £26 billion in VC funding between 2010 to 2022. A Designated Enterprise Zone, the availability of startup-related assistance and tax incentives make London particularly friendly for tech startups. The Royal Docks Enterprise Zone offers benefits including tax relief for companies investing in manufacturing plants and machinery. The Startup Loans Program offers personal loans of up to £25,000 and free mentoring to those that have a viable business idea but no access to finance.
Dedicated Support
London & Partners provides free advice on starting a business in London, including support for scaleups. Its Business Growth Program is open to SMEs with a turnover of less than £40 million. London Business Hub runs a range of programs to support local businesses. LSE Generate supports students and alumni, and provides mentoring for secondary school pupils. Generate also runs GAO, an accelerator for startups founded by staff members, students, or alumni.
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