A new study has shown that UK tech start-ups have accessed more funding in the last year than new businesses in France and Germany combined.
According to The State of European Tech report, from venture capital firm Atomico, tech firms in the UK attracted capital funding worth around £37.4 billion within the last five years – including more than £9.3 billion in finance in the last 12 months.
Despite the uncertainty regarding Brexit and the Coronavirus pandemic, the report shows that investment in tech start-ups in Britain in 2020 was double the amount raised by its European counterparts in places like Germany and France.
Although other parts of the UK are seeing increasing investment in tech, London remains the primary tech hub when it comes to the amount of capital invested, attracting £7 million in 2020.
Paris was Europe’s second-largest tech hub, attracting £2.5 billion of investment this year – around 35 per cent less than London.
Reflecting on the latest findings, Culture Secretary Oliver Dowden said: “The UK is the tech powerhouse of Europe. We want to make sure that UK tech comes out of the COVID-19 crisis stronger than ever – supporting the sector through the recovery just as tech supported all of us through the pandemic.
“Our forthcoming digital strategy will unleash the full potential of tech innovators and entrepreneurs across the country, driving a new era of growth. The UK has long been one of the best places to start and grow a tech business and we intend to keep it that way by taking an unashamedly pro-tech approach.”
A key factor in the success of many tech businesses launching in the UK is the generous R&D tax credit system, which provides around £5.1 billion in funding a year that supports £36 billion of R&D expenditure.
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