Silicon Roundabout vs. Silicon Valley: London and the Bay Area

One and two for fintech globally, and just five years apart in terms of VC investment – in collaboration with London & Partners, we have explored the interconnected journeys of two of the world’s most important startup hubs.

London and the Bay Area are two of the most important startup hubs in the world, ranking first and fourth globally by VC investment in 2021 (and first and third so far in 2022).

Despite being at very different points in their journeys, the Bay Area and London share many similarities. Both are the most important hubs on their respective continents, both attract talent and investment from all over the world, and they also share affinities in sector specialism, excelling in a diverse range of sectors, from Fintech to Climate tech.

Remarkably, in 2021 London hit the same level of VC investment as the Bay Area reached five years ago; albeit in a bumper year for venture, but startup investment is also growing faster in London than in the Bay Area either then or now.

Last year London startup VC investment reached an all-time high in 2021 of $28.1B, growing 2.3x year on year, faster than Bay Area.

London: a big draw for US investors

As a global tech hub, London now attracts investment from all over the world.

London-based startups raised 36% of total capital from US investors in 2021, more than any other geography, including domestic funds. And many top tier US investors have begun setting up shop in London. Funds like Sequoia, Accel and Sapphire Ventures are using the city as a launchpad for investing across all of Europe.

London also attracts more funding from US funds than any other European city.

First and second for Fintech

So far in 2022, London has raised more fintech investment than any other hub, with the Bay Area in second.

In the last five years the Bay Area and London have comfortably been the number one and two hubs for fintech investment, having raised $52.7B and $31.5B respectively since 2017.

Despite the Bay Area still having a huge lead, these two thriving tech hubs are increasingly interconnected, and globally important. While Silicon Valley had a ~40 year head start, London is now just 5-8 years behind. As startup ecosystems propagate everywhere into the next decade, these two powerhouses will be looking to lead from the front.