A tip-top year for UK tech

Darren Sinden

UK technology companies attracted $15.0 billion or £11.20 billion in new funding during 2020 eclipsing the previous record of $14.80 billion set in 2019

UK technology businesses have cause for optimism it seems as 2020 draws to a close.

The number of job vacancies at technology firms based in the UK has rallied by 50% since hitting a low point in the summer and vacancies are growing at a rate of 2.60% each month according to data compiled by Tech Nation, the UK technology-focused think tank and networking organisation.

Jobs in technology now account for around 10% of all UK jobs and the rebound of employment in the sector could be seen as a good omen for the wider economy.

The growth in job numbers and recruitment in the tech sector has moved hand in hand with the resurgence in funding for UK tech businesses, which has itself bounced back after shuttering during lockdown earlier in the year.

UK technology companies attracted $15.0 billion or £11.20 billion in new funding during 2020.

Eclipsing the previous record of $14.80 billion set in 2019. That level of funding has helped to create a total of seven tech Unicorns in the UK, that is start-ups with a valuation of $1.0 billion or more.

Those seven are Arrival, which is an electric vehicle business, Gousto, a recipe box delivery service, Octopus Energy which is  a green- energy focused utilities provider, Gymshark which is an online gym clothing and accessories business, and Cazoo, which offers car sales online and cloud communications and monitoring business Infobip.

The UK now has more Unicorn businesses than any other European country and as many, as can be found in Germany, France and the Netherlands combined according to Tech Nation’s research. That’s positive news that will be welcomed by the UK government after what has been a very difficult year.

UK Tech Secretary Oliver Dowden was quoted as saying that: “It’s fantastic to see the UK’s tech companies flourishing, despite all the challenges of 2020. The thousands of high-skilled jobs they are creating will be a crucial part of our economic recovery and the government is committed to supporting the tech sector through an unashamedly pro-tech approach.”

Ahead of the Christmas holidays, UK PM Boris Johnson hosted a round table with executives from some of Britain’s leading start-ups to explore how the UK could entice tech companies into listing on London’s stock market.

That has often been the missing piece of the pie as far as the UK tech sector is concerned. Although the debut of e-commerce business Hut Group in September showed that a UK listed IPO could perform. Hut groups shares rallied 30% above the £5.00 IPO price and could finish the year around the £8.00, after a run-up in the shares today.

Hut Group’s market cap stands at just under £7.75 billion or $5.72 billion and the flotation turned founder and CEO Matthew Moulding into the UK’s newest billionaire and made millionaires of many Hut Group employees. That’s just the kind of success story that London’s financiers, advisors and the UK government would like to celebrate more often.

Not all of the UK’s tech businesses are based in London however and both Oxford and Cambridge compete to be in the number two spot behind the UK capital. In 2020 Oxford piped Cambridge to the post with the cities startup raising $532 million of investment often into health-tech related business such as Nanopore a biotech Unicorn that raised $84.40 back in October.

There was also increased funding for business in cities including Leeds Newcastle and Glasgow and pushing funding out into the UK regions is something else that central government would like to encourage. Overall I think UK tech could describe their experience in 2020 as one that snatched victory from out of the jaws of defeat.

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