UK tech health check – megarounds driving massive record funding

The UK’s tech sector is on course for a record year of investment after a flurry of megarounds have sent venture capital investment soaring to $18B in the first six months of the year. UK investment figures surpassed the full year 2020 total in the first week on June, and grew 2.8x year on year in H1. Our new report, in partnership with Tech Nation and the UK’s Digital Economy Council ahead of London Tech Week, demonstrates the UK’s continued strong growth in venture capital and startup value, even as a mature tech ecosystem.

Report - 2021 mid-year update of UK tech

  • The UK tech industry has raised $18B in the first half of the year, almost three times what was invested in first six months of 2020
  • More than half of all investment in the UK now comes from megarounds of over $100M
  • 20 new unicorns were created in 2021, compared with the 24 years it took to create the first 20

UK investment

Megaround domination

The UK has seen 25 rounds of over $100M in 2021, vs. 11 in full year 2020. More than half of all investment raised this year has come from these megarounds. The rounds which would once have been big news in UK tech have become normalized, with almost one announced every week.

More than half of all VC investment in the UK in 2021 has come from megaroundsInvestment distribution

Notable megarounds have included: 

  • Revolut, the neobank, which raised $800M at Series E at a $33B valuation
  • Cinch, the car sales platform, which raised £1bn
  • Cybersecurity platform Snyk raised $300M Series E in March followed by $530M in September
  • Hockey-sticking Hopin, the online events company, raised over $850M across rounds in March, June and August 2021 

100+ unicorns 

This influx in cash to UK startups has helped mint a swathe of new unicorns – companies valued at $1B+. The UK is now home to 105 unicorns, with 20 created in 2021 alone, including Tractable, Zego and Depop. In comparison, it took 24 years (from 1990 to 2014) to create the UK’s first 20 unicorns.

Unicorns chart builder

The number of potential future unicorns – valued at $250-$1B – is also growing, with 153 possible candidates in the UK. 

Not just London

While London is Europe’s leading tech hub but venture capital, value creation, unicorns, and number of startups, the UK is also home to a number of significant tech hubs that can compete with other leading European tech hubs in their own right, cities like Oxford, Bristol, Manchester and Cambridge.

A $0.6 trillion industry

The combined value of UK tech companies founded since 2000 is now $592 billion. The UK’s single largest tech company is currently banking app Revolut, at $33B. 2021 has also been a year in which large numbers of home-grown tech companies have listed on the London markets, including Deliveroo, Darktrace and Wise, London’s largest-ever tech listing.

Report - 2021 mid-year update of UK tech

Digital Secretary Oliver Dowden said: “It’s fantastic news that UK tech firms are enjoying a record-breaking year, with new startups launching to tackle challenges posed by the pandemic and established scaleups cementing their world-class status in cities across the country. I will continue to push a pro-tech agenda and work tirelessly to help these businesses grow and thrive as we build back better.”

Gerard Grech, founding Chief Executive, Tech Nation, said: “The UK tech industry is on course for another record high in terms of investment in 2021. The success of established companies like Wise, Darktrace and Depop show there is a clear pathway for UK tech companies to make an impact on a global scale, and at Tech Nation we will continue to support entrepreneurs and startup founders as they grow their businesses from first investment cheque all the way to IPO.”

Nicola Mendelsohn, Vice President EMEA, Facebook and member of Digital Economy Council, said: “The UK tech sector is fast maturing and the country now has leadership status alongside Silicon Valley and China. This is an exciting time to be part of this industry and we should be encouraging talented young people to understand that the best careers of the future can be found in those companies that are creating innovative products and services that help businesses and individuals.”

Julia Hawkins, general partner at LocalGlobe, said: “The UK’s strengths in biotech and healthtech are starting to be recognised and investment is flowing into this sector where we already have world-leading intellectual property. The challenge now is to bring these companies to scale.”

Rana Yared, general partner at Balderton Capital, said: “The UK is home to one of the most diverse and vibrant tech industries in the world. Entrepreneurs launching new companies today have some great models to learn from, including companies like The Hut Group, Zego, and Depop. Uniquely to the UK, multiple tech hubs have thrived outside of London, such as Cambridge. Manchester, and Oxford, demonstrating the transformative power of technology.”