Ten fast-growing scaleups drove UK tech boom in 2020, Tech Nations’ report shows
Ten scaleups, which between them secured 20 per cent of total UK tech VC investment at USD3.5 billion drove UK tech in 2020, according to Tech Nations’ latest report on the state of the UK tech sector.
Octopus Energy, Arrival, Cazoo, Gymshark, infobip, Gousto and Hopin were the seven unicorns to achieve unicorn status in 2020, bringing the UK’s total unicorn count in 2020 to 80. An additional six unicorns have already been created so far in 2021: Blockchain, Kymab, PPRO, Touchlight Genetics, Starling Bank and Zego. Online events platform Hopin, which raised USD150 million in 2020, has gone on to raise a further USD400 million Series C round from Andreessen Horowitz and General Catalyst with a valuation of USD5.65 billion.
Valued at USD585 billion, startups and scaleups more than doubled their collective value since 2017. Germany, which is the second most valuable European scaleup ecosystem, was valued at USD291 billion. London-based electric vehicle startup Arrival, together with green energy provider Octopus Energy secured the biggest rounds for UK impact startups in 2020 – at USD400 million and USD577 million respectively.
“Tech Nation’s report reveals the most attractive sectors for venture capital investors in 2020, including transport tech, deep tech and the future of work”, said Judith Hartley, CEO of British Patient Capital, whose portfolio includes Cazoo, Graphcore and Hopin, each of which has raised GBP100m plus during the past year.
The Tech Nation’s annual report showed that non-UK investment funded the majority of UK tech in 2020. “This creates a significant opportunity for British Patient Capital and for other UK institutional investors. There is an increasing pool of experienced UK venture and venture growth managers, who are backing some of the most exciting high-growth companies in the country. It is through these managers that UK institutional investors can capture the value that exceptional companies such as Cazoo, Graphcore and Hopin can create,” added Hartley.
According to Angelika Burawska, COO at SFC Capital, the report provides interesting and important insights, but also reveals some worrying trends. “At a time when record numbers of new companies are being created, we need to ensure that there is sufficient capital at this early stage to support their early growth, she commented.
“These are the companies that in 5-10 years will be the next Gousto or Octopus Energy. One straightforward way of encouraging more capital into this sector would be to raise the limit on SEIS investment to GBP250,000 - this would encourage businesses to raise capital, and incentivise private investors to put more money into this stage of investment," added Burawska.