This article constitutes the final part of our three part series on venture funding in the UK’s golden triangle. This series was inspired a report we co-produced with the technology law firm Pennington Manches, which revealed that levels of investment reaching the UK from the Silicon Valley has increased massively this decade, and that the majority of this has gone to companies based in the Golden Triangle (London, Cambridge, and Oxford). So far we’ve looked at the technology scenes of the Silicon Fen (Cambridge) and the Silicon Spires (Oxford). In this final piece, we look at venture funding in the Silicon Roundabout – London.
Note: since our last post on the Golden Triangle, we have acquired Spinouts UK, greatly increasing our depth of data on British university spinouts. As such, our investment figures have been revised somewhat.
Silicon Roundabout London
As we have established, on a per capita basis Oxford and Cambridge tech companies have raised more equity finance than either Greater or Inner London. This shows how, considering their size, these smaller cities are technology powerhouses.
However, as with the rest of the economy, one cannot ignore London’s status as the technology heart of the UK. Out of the city’s 7,500 active high-growth businesses, around 3,500 operate in the technology sector. (For more information on how we classify high-growth, click here). Cambridge boasts 214 high-growth tech companies; Oxford just 117.
Of these technology companies, nearly 3,000 develop some form of software as part of their product offering. Just 125 operate in the life science sector. If software is eating the world, it has already eaten London.
As these figures show, Central and East Central London postcodes remain the leading destination for equity finance in the UK’s technology sector. There is a clear leap between London’s leading five boroughs (City of London, Westminster, Hackney, Camden and Islington) and the next best. However, Lambeth, Southwark and Tower Hamlets have also seen a significant amount of tech equity deals in this time period. As such, they form a sort of middle-tier between the more central tech hubs and the less tech-y outer boroughs. It would seem that software startups are starting to permeate south of the Thames.
London’s top funds* by software equity finance deals, 2017 – 2018**
*this graphic displays the top funds, not fund managers. This distinction is important. For example, Parkwalk Advisors manage a range of funds, like their University of Oxford Innovation Fund, or their University of Bristol Innovation Fund. However, our ranking would count these funds separately, rather than tallying them together.
**Excluding crowdfunding platforms.
Since the start of 2017, LocalGlobe has been the most prolific funder in London’s software sectors. Interestingly, a government fund, the London Co-Investment Fund (an LEP), has also been one of the most active funders, showing these organisations are playing prominent funding roles even in London, a global financial centre.
Spinouts of the Silicon Roundabout
There are currently 130 currently active or exited technology spinouts from London universities which still reside in the city. However, spinouts from universities outside London have since moved to London, and vice versa. 184 of the spinouts from London that have left the city are still active, or have managed to complete an exit.
