UK possesses impressive regional diversity in unicorn generation ⁠— report

It may have been cut off from the EU's common market but the UK's tech ecosystem has a lot of positives to take away from 2022.

A new study from Dealroom, prepared for the UK government's Digital Economy Council (part of the digital, culture, media and sport department), suggests UK tech will this year retain its command as Europe's leading innovation ecosystem in terms of venture dollars.

The authors of the report believe £24 billion in venture funds was poured into UK tech companies, just shy of its biggest haul on record and more than fellow economic powers France (£11.4 billion) and Germany (£9.1 billion) combined. Over the last five years, UK growth companies raised almost £100 billion and the valuation of its startups soared above the $1 trillion mark earlier this year.

The UK's ability to get funds flowing into cities away from London is another highlight in the report.

A total of eight British cities are said to now possess at least two unicorn companies. Provinces away from London have fostered 42 unicorns since the turn of the century, versus four provincial $1bn+ startups in France and 30 in Germany. The UK's overall unicorn tally since 2000 (of 144) also surpassed that of France and Germany (36 and 63 respectively).

London still possesses more unicorns, but there's a strong showing also for cities with populations below 500,000, like Bristol, Cambridge, Nottingham and Oxford, together with London, Manchester, Leeds and the Scottish capital Edinburgh.

Cambridge was recently named by Dealroom as the world's best university for producing successful tech founders, stealing a march on US innovation factories like Harvard and MIT.  Dealroom's figures show Cambridge has produced over 500 alum founders who have raised at least $10 million in funds.

Oxford's university came third while universities in Bristol, Nottingham and London all made the top 20, on the back of deep tech and science-led programmes.

Yoram Wijngaarde, founder of Dealroom, said: "The UK's startup ecosystem is unignorable. UK startups are worth over a trillion dollars collectively, with over 130 unicorns, and many of the world's most important investors use London as a logical launchpad into the rest of Europe. 

"While the lofty rounds and valuations of 2021 are long gone, healthy startup ecosystems with strong fundamentals don't disappear overnight.

"We're now seeing a "return to normal" in startup markets, which for the UK's startup ecosystem means returning to its roots of ambitious, outward-focussed, open entrepreneurship.”