UK startups see record investment for 2021

The UK's tech sector has seen record levels of investment during the first three months of 2021 as potential stakeholders have poured a little under £6 billion (€6.96 billion) into some of the most promising UK startups, according to the latest annual report by government entrepreneur scheme Tech Nation.

This comes early a month after UK chancellor Rishi Sunak introduced the "future fund" - a measure to allow the taxpayer to take further steps to invest in potential tech businesses, which saw the potential investment of up to £375 million (€434.7 million) into these companies.

Read more: Why UK manufacturers are underprepared to deal with the pandemic's cybersecurity fallout

Investments made in fast-growing companies more than doubled the Q4 2020 figures, according to the government watchdog. The programme has already seen its fair share of Unicorns as five companies involved have already seen a valuation of more than $1 billion.

Tech Nation also claims 2020 saw increased levels of investment when compared with previous years.

2020 as a whole saw roughly $15 billion (£12.5 billion), managing to pull ahead of its rival hubs in Germany and France despite the complications from Brexit, according to Tech Nation's annual report.

This successful year has prompted the continued investment in tech companies going into the new year, and if trends continue, 2021 is looking likely to shatter new records.

The UK was also the third-largest hub for investment in the global scene, behind China and the US. The British high-growth company sector is currently valued at roughly $585 billion, having more than doubled since 2017.

Gerard Grech, chief executive of Tech Nation, told the FT: "In the face of a global crisis, the tech sector has not only survived; in many areas, it has boomed."

The UK government are still eager to "level up" areas of the UK, with some seeing significantly more investment than others.

However, the report shows London still remains king in terms of UK investment, with Cambridge, Bristol, Edinburgh and Oxford also making the list. All five cities rank within Europe's top 20 destinations for business investment for 2020.

The report also shows the UK will still face major challenges, mainly coming in as part of its post-Covid recovery schemes.

Britain is still coasting when it comes to R&D development, the report said, with some private companies investing more than the government combined on their own.

Read more: EU sets 2030 target for semiconductors and quantum technology

The report also highlights concerns regarding national security.

63% of the venture capital gains for UK companies has come from sources outside the country. The signals a potential shortfall for late-stage domestic investors.

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