Tech Nation’s 2021 report ‘The Future UK Tech Built’ has revealed that UK Tech VC investment is the third highest globally, surpassed only by China and the US. And despite a challenging 2020, the future looks bright for UK Tech after hitting a record high of £15bn investment last year.
These figures are proof that the UK has established itself as a world-leading tech centre; a claim that is backed up by the fact that 63% of investment into UK tech is now coming from overseas. The UK startup and scaleup ecosystem is currently valued at £585bn which is more than double that of Germany’s, the next most valuable ecosystem and is growing at a rate that is six times faster than the rest of the UK economy combined.
But what exactly has been driving that growth across the UK? And where can we expect to see UK tech moving in the future? Well, let’s take a closer look.
North West dominates HealthTech
It may come as little surprise that in 2020 healthtech dominated the global tech investment landscape with $65bn raised. In the UK, healthtech was the second highest sector for VC investment but it was the North West that saw the greatest increase. The region saw a rise of 224% from 2019 - 2020, increasing from £25m to £82m.
Based at Alderley Park, the UK’s largest single-site life sciences campus in Cheshire, Gendius typifies the innovative work being carried out across the North West. Their new app, Intellin, utilises AI to allow patients to better manage diabetes. Gendius’ recent milestone of raising over 600% of their funding target on Crowdcube demonstrates the public clamour and backing for their innovation. The number and rate of technological advancements that enable at-home, remote monitoring of patients have dramatically increased over the last 12 months, and don’t look likely to reduce in the post-pandemic world.
This new dynamic in patient-doctor relationships looks to be something that is here to stay. The pandemic dramatically increased rates at which people, and older generations in particular, adopted various forms of healthtech and telemedicine. And GP Bullhound recently predicted that as 5G coverage and access increases even more doctor appointments will be able to be undertaken online which will in-turn enable improved medical access for all.
The Midlands a centre for EdTech
EdTech was named as one of the emerging UK tech trends with clusters of innovation forming in the East of England and the Midlands. As learning has been increasingly taken online in the last 12 months, we can only expect this trend to develop further. In fact, in 2020 over $16bn was invested into EdTech as 90% of countries implemented remote learning.
Two companies based at our Innovation Birmingham campus are already firmly ahead of the trend, Learning Labs and Round Midnight have been leading the way in innovations in the edtech and e-learning sector. Round Midnight uses immersive VR experiences to educate children on the challenging topics of knife crime and gangs. Whilst Learning Labs have changed the way we learn languages using their online platform to accelerate progress.
The rise of ClimateTech
ClimateTech is set to be one of the UK’s emerging tech trends for 2021 with technology highlighted as one of the key ways we will battle climate change. The sector is rapidly developing, growing in investment by 81% from 2018-19, and a further 63% 2019-20.
Whilst the majority of Climatetech VC investment was concentrated in the South of England, the Midlands has also proved itself to be a growing cluster of such climate-tackling companies. Energym, Petalite and CloudCycle are all Birmingham based businesses providing innovative green solutions. Energym, a precision-engineering tech-focused start-up is using human energy to create green, electrical power whilst Petalite and CloudCycle are leaders in EV charging and environmentally friendly concrete mixing respectively.
Fintech stays strong
In 2020 FinTech continued to show a strong performance with $4.5bn VC investment raised. Based on the number of employees and total investment into the sector, the UK is now Europe’s biggest fintech hub.
For Leeds in particular, fintech has played a leading role in their digital tech sector’s £6.6bn contribution to the local economy. The number of fintech businesses in the city has doubled since 2018 and the city as a whole boasts two unicorns, with another two on the horizon.
Zoot Enterprises, based at the home of tech in Leeds, Platform, are one such fintech company contributing to and seeking to capitalise on the city’s thriving fintech community. As a recently named thought leader of their industry and a global fintech provider, Zoot’s choice to base themselves in Leeds is testament to the city’s ability to provide the right conditions for fintech companies to thrive.
The success of FinTech looks only set to continue as digital payments increasingly become the norm. This is particularly true amongst Gen-Z, over 75% of whom opt for digital payments over cash every time. And what Gen-Z do, the rest of us seem to follow.