The UK technology sector has grown by 20% since 2023 and is now worth at least $1.2 trillion in enterprise value, a new report has found, cementing Britain’s status as the top tech ecosystem in Europe.
This makes it nine times larger than it was a decade ago and means the UK’s ecosystem is larger than France’s and Germany’s combined.
The report, produced in partnership by HSBC Innovation Banking and Dealroom, notes that nearly half of this value is from companies founded in the last 15 years.
It also highlights the potential for the sector to grow further as half of this figure lies in pre-exit companies that may bring in more industry value as they are acquired or listed.
The expansion of the tech sector has created over 1.8m jobs so far as startups headquartered in the UK have doubled their staffing at home and abroad since 2020.
Data has further revealed that 2024 was a strong year for AI investment in the UK as venture-backed AI firms raised $4.2bn in VC investment in 2024, a 31% increase from $3.2bn 2023.
This figure is just shy of the $4.3bn that VCs invested into AI companies in 2021 but represents the highest share to date at 27% of all funding.
Much of this came from five funding rounds of over $100mn as well as a $1.1bn round for Wayve, who develop AI-powered self-driving vehicles.
This comes as the UK government announced its AI Opportunities Action Plan on Monday which hopes to make the country a world leader in AI by loosening planning constraints to fast-track the creation of clusters of AI expertise.
Meanwhile, fintech has been revealed as the most funded segment in the UK’s tech sector as it attracted $3.9bn in VC investment last year.
This was driven by several significant rounds of funding including Monzo ($448m & $190m) and WorldRemit ($267m). Health and Enterprise software was close behind, raising $3.3bn.
Last year the UK also minted 9 new unicorns, privately held firms that are valued at over $1bn, bringing the total in the country to 181 and accounting for almost a third of all such companies in Europe.
The report also shows that Cambridgeshire and Oxfordshire are leading regions where startups raise the most venture capital. Firms in Cambridgeshire raised $1.2bn while those in Oxfordshire raised $675m in 2024.
Though significant, these figures are eclipsed by the $10.7bn that startups in London raised.
Commenting on the report, Simon Bumfrey, interim CEO of HSBC Innovation Banking, said: “The UK innovation economy remained resilient in 2024, achieving record enterprise value and driving significant job creation across the ecosystem.”
“As we look to 2025, we remain committed to partnering with firms across the ecosystem to support and accelerate growth”.
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