UK tech firms break venture capital record in 2015
The UK’s technology sector received a record $3.6 billion (£2.54 billion) in venture capital funding in 2015. This represents a 70% increase over the $2.1 billion raised in 2014, a figure that was itself record breaking at the time.
UK tech firms have collectively raised $9.7 billion in VC funding since 2010. The majority of this amount headed to companies in London, with tech businesses based in the capital receiving $5.2 billion of the total. This ratio has also increased and in 2015 London tech firms accounted for 63% of the total VC raised in the UK.
The figures were compiled by the Mayor of London’s promotional company London & Partners and current mayor Boris Johnson hailed the capital’s flourishing tech scene, with its “world-class talent pool and our culture of innovation and entrepreneurial spirit”. He added that the city could expect to see the sector boost its economy and to generate jobs for many years to come.
A lack of access to funding is seen as one of the biggest problems faced by many SMEs in the UK. External funding is often essential for growth and can sometimes help struggling businesses to survive through challenging periods, especially during the start-up phase. New businesses who fail to secure funding could find themselves requiring the assistance of an insolvency practitioneralmost before they’ve had a chance to get going, especially if they lack a clear plan relating to their financial situation.
A number of alternative funding platforms have risen to plug the gaps in the market left by the banks and other traditional lenders. These include crowdfunding, peer-to-peer lending and invoice financing. Tech-based firms, however, are often well placed to pitch for VC funding.
The financial technology field, often known as ‘FinTech’, broke records in 2015 and accounted for a quarter of all investment raised by the London-based tech companies. The UK’s e-commerce sector also received a large amount of funding, with many of the top 10 funding deals of the year occurring in the sector.
By Phil Smith