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What Brexit? London Remains ‘undisputed tech capital of Europe’

Despite fears of Brexit, the UK is continuing to attract investors and big name talent

In a year which saw the UK vote to leave the EU, many in the tech industry warned of the departure of talent, money and status in the UK tech sector. However, data from London & Partners, the Mayor of London’s promotional company, found that the UK tech sector drew more investment than that of any other European country in 2016.

Measuring activity across private equity and venture capital deals, more than £6.7 billion ($9.5bn) was invested into UK tech firms in 2016, with the good news extending regionally to London too.

The capital city retained its status as the tech capital of Europe, accounting for more than a third of the total invested into UK tech firms and attracting more money than any other European city.

Despite Brexit, investors were found to be keen on investing in the UK, with UK tech firms receiving more venture capital investment than any European country post-referendum.

London received a lion’s share of investment, with firms securing around £1.4 billion ($1.9bn) of the total £1.9 billion ($2.6bn) raised by UK tech firms in 2016. VC investors continued to pump money into London tech companies following the EU referendum, with London companies raising over £668 million ($862m) during the second half of the year.

2016 was also a record year for M&A activity, with British companies seeing more investment than any other European country after the 23rdJune.

In total, over £71 billion ($98bn) of M&A deals were completed in the UK in 2016, over five times the total amount of completed deals in 2015 and 2014. Leading deals in 2016 included SoftBank’s takeover of UK chip maker ARM £24.3 billion ($32bn) and telecommunications services firm, EE’s £12.5 billion ($16bn) acquisition by BT.

“With our unbeatable blend of talent, creativity and access to finance, it is not surprising that London continues to go from strength to strength as the undisputed tech capital of Europe,” said the Mayor of London, Sadiq Khan.

“Despite the Brexit vote, the capital continues to attract record levels of investment and remains the best place in the world to grow a business. I have no doubt that this important sector of our economy will continue to generate jobs, investment and world-leading technology for decades to come.”

tech capital of Europe’

The Brexit vote also raised fears over an exodus of big name tech firms from the UK, a fear which seems to have failed to materialise in 2016. A number of tech giants have invested in the UK, with Google putting forward a £1 billion investment plan for a new headquarters in King’s Cross. Facebook pledged an additional 500 jobs for London and Apple revealed its plans for new headquarters in Battersea. This trend seems to have continued into 2017 with Snap Inc, the company behind messaging app Snapchat, recently announcing an international hub in London.

READ: What Brexit means for fintech

The London & Partners research also highlighted London’s key strengths, with adtech, e-commerce and big data firms attracting increasing amounts of investment in 2016. Artificial Intelligence companies also benefitted from a sharp rise in venture capital investment in 2016, with London based AI companies receiving a record £100 million last year, more than three times the £27 million raised in 2014 and almost double the £52 million raised in 2015.

“The UK is undeniably a leading destination for investors, entrepreneurs and businesses alike. With a diverse talent pool, global financial centre and a strong culture of innovation, it is no surprise to see that the London has attracted more investment than any other major European city in 2016,” said Eileen Burbidge, Partner at London venture capital firm, Passion Capital.

“The UK continues to lead the way in the development of cutting edge technologies and areas such as big data, cybersecurity and ecommerce, are creating exciting opportunities for investors from all over the world. Recent investments announced by the likes of Facebook and Google further demonstrates the strength of London’s tech sector and shows that London is still very much open for business and investment.”