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The Business Magazine July 2024
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UK tech sector is #No1 in Europe

Dr Harry Destecroix
Dr Harry Destecroix
13 June 2024
Dr Harry Destecroix

The UK is top in Europe for AI investment. It's home to more than 1,800 VC-backed AI start-ups and 20 AI unicorns. Sixteen per cent of total VC investment in UK start-ups goes to AI companies, and UK AI start-ups saw a 10 per cent increase increase in investment last year, bucking the trend of global venture capital.

The country is the number one tech ecosystem in Europe and the third most valuable in the world.

The combined market valuation of the UK tech sector in the first quarter of 2024 was $1.1 trillion.

So reveals the latest report from Tech Nation, a leading growth platform for tech insights, connections, collaboration and talent, which is led by the Founders Forum Group.

Its latest report "UK Tech in the Age of AI" reveals a comprehensive overview of the data and trends shaping the future of UK tech.

Carolyn Dawson, OBE, CEO of Founders Forum Group, said: "There are challenges ahead and work to be done, to diversity the talent pipeline, address gaps in funding for women and under-represented founders, and provide more support for growth-stage companies. We must also recognise that the obstacles start-ups face in Manchester of Glasgow are different to those faced by start-ups in London or the South East.

"Under Tech Nation, and together with our founding partner, HSBC Innovation Banking, we aim to facilitate £10 billion to start-ups within the next five years through the power of connections, knowledge-sharing, mentorship and talent opportunities."

The report reveals that in the first quarter of this year alone, more than $50 billion has been raised by UK-headquartered funds – the biggest quarterly fundraise to date.

Eighty four per cent of UK start-up and scale-up founders are positive about the future of UK tech and 69 per cent of tech professionals believe AI will have a transformative impact on the UK economy and country as a whole.

Last year, across the South East $2 billion of investments were made in the tech sector, with investment in AI companies making up $327 million of this total number. The region has 12 tech unicorns.

Across the West Midlands, $157 million of investments were made, with $29 million going to AI companies. The region has three unicorns.

And in the South West, $614 million of investments in tech companies were made, with $23 million being invested in AI companies and the the region has three unicorns.

AI unicorns across the regions include nano sequencing company Oxford Nanopore and drug discovery company Exscientia (also based in Oxford).

UK AI start-ups raised $3.4 billion in 2023, the second highest total on record.

The top tech sectors in the UK, based on total VC investment are energy ($5 billion was invested in energy start-ups last year), fintech ($3.9 billion last year), and transport ($3.7 billion).

Harry Destecroix, founder of Bristol's deep-tech incubator Science Creates, and Science Creates Venture Capital, said: "There's a huge opportunity for deep tech in the UK. We have some of the best research per capita in the world, but we have a relatively low number of patents being filed. At Science Creates, we're focused on supporting scientists and engineers to ensure the right things are spun out with the correct licenses in place."

Ilana Wisby has just stepped down as CEO of Oxford Quantum Circuits, a company she co-founded and spun out of the University of Oxford in 2017. She said: "Deep tech is the lifeblood of our economy, not just because of the employment opportunities it offers but also because of the new industries it can help to create. However, the funding opportunities in the UK are less attractive than in the US and parts of APAC, especially post Series A. The UK government sets ambitious targets for the deep tech sector, but it needs to do more with funding commercial R&D and building, and securing the infrastructure to meet those targets and enable companies to leverage deep tech and build global partnerships."

Oxford Quantum Circuits, which is now based in Reading, has 100 employees and has raised more than $150 million.


Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.

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