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UK Tech startups raise over £12 billion in venture capital funding in 2022

The UK has surpassed most of the world in terms of startup investment, outpacing China, India, and France in spawning innovative new enterprises despite the city facing significant economic troubles. London is poised to take the lead in Europe in the changing IT landscape as the pace of digital transformation keeps accelerating in the wake of the Covid-19 outbreak. The UK has already raised more venture capital money in the first five months of 2022, which is $12.4 billion in comparison to $12 billion for the entirety of 2020. More than 950 UK tech startups and scale-ups have raised $12.4 billion so far in 2022. Due to the inflow of cash, the UK is now home to 122 unicorns—startups valued at over $1 billion—with at least one unicorn residing in more than 20 cities and towns, as well as 248 futurecorns—companies that are all predicted to become unicorns.

However, out of the $12.4 billion that was raised, £8.6 billion went to London-based startups. In contrast, Bristol and Oxford, the next two top digital investment hubs in the UK, raised $220 million and $248 million, respectively. According to data, the UK has long been seen as a pioneer in Europe when it comes to creating an atmosphere where unicorns can flourish. Three UK regional cities and towns—Cambridge, Oxford, and Abingdon—are among the top 20 European futurecorn hubs thanks to years of sustained investment. They house 18 futurecorns altogether, including Immunocore, Healx, and Oxbotica. Regional investors are also raising significant amounts of money alongside regional start-ups. Northern Gritstone, a Leeds-based company, has raised £215 million this year for university spinouts in Manchester, Leeds, and Sheffield, while Praetura Ventures, a Manchester-based company, has raised £100 million to support start-ups in the north of England. Additionally, Cambridge Innovation Capital has secured £225 million, its largest fund to date, for investments in fast-growing businesses in industries like enterprise software and HealthTech.

With £6.2 billion raised by FinTech start-ups and scale-ups so far this year, FinTech has emerged as the strongest area for UK IT investment this year. Notable rounds included those for payment provider Paddle, which raised £162.2 million to become a unicorn earlier on in the year, and checkout.com, which raised about £800 million in Series D fundraising in January to become the UK’s most valuable private FinTech.

The largest investment round outside of the fintech industry this year went to CityFibre. It is the leading independent full-fibre infrastructure platform in the UK, which raised £300 million in March from Mubadala Capital Ventures to bring full-fibre networks to households and companies across the UK. Healthtech and impact startups—those tackling one or more of the Sustainable Development Goals—were the next two industries after UK Tech Startups to attract investment, each receiving about £791 million. Tech companies with a focus on impact have raised more than £791 million in 2022, so far. Carbon Clean Solutions, a carbon capture firm with headquarters in London, raised more than £118 million in a Series C round in May, becoming the impact start-up with the highest investment this year.

Although unicorn growth is accelerating at an amazing rate across Europe, it’s important to note that about half of the investment seen across the continent has come from American investors. This shows that domestic and foreign investors continue to view UK tech as a solid investment despite an expected slowdown in the larger digital ecosystem.

Tech firms in the UK appear to be embarking on an intriguing journey with persuasive developments. In my opinion, this startup ecosystem will unquestionably keep growing in the upcoming years. Best wishes to everyone in the group. They will eventually achieve great success as a result of this.

Shishir Gupta, Founder and CEO, StartupLanes

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