Investors are continuing to back promising technology firms during Covid-19, new research has found.
Figures from Tech Nation and Dealroom for the Digital Economy Council showed that digital tech companies are continuing to attract investment, are still advertising vacancies and are optimistic that they can navigate the crisis.
Furthermore, on measures including investment raised by companies and capital raised by investors, which will help sustain the sector for the long-term, the UK outperforms all of its European neighbours.
The capital is now established as a global tech leader with London-based companies raising $4bn (£3.14bn) since the start of January – more than Paris, Stockholm, Berlin and Tel Aviv combined.
“The UK’s tech sector has shown resilience in these challenging times and the levels of investment in the year to date have consolidated our Europe-leading position,” said Oliver Dowden, secretary of state for digital, culture, media and sport.
“We have a vast pool of talent in the country’s digital and tech firms who have played a big part in supporting communities across the UK and beyond throughout the pandemic and I applaud them for their ongoing efforts.
“The government will continue to champion and support the sector as it navigates the months to come as we step up our coronavirus recovery plans.
“We will back entrepreneurs, encourage innovators and help businesses make the most out of the opportunities the digital and tech world provides.”
The UK’s tech sector entered the coronavirus crisis in February in a strong position. From January to the end of May, tech companies raised $5.3bn, compared to a total raised in the rest of Europe of $4.1bn.
However, there are concerns that many of these deals were agreed in principle before the onset of the virus, which has reset expectations. Capital inflows in the second half of the year are unlikely to be as strong as those in 2019, which was a record year.
At the beginning of the pandemic, start-ups were in a difficult position, missing out on much of the coronavirus business interruption loan scheme due to issues around eligibility.
The Save Our-Start-ups campaign, backed by many peer-to-peer lending platforms such as Simple Crowdfunding, was launched to address this issue.
Then in April the government announced its £500m future fund for innovative companies, which has already proved popular, with nearly 900 applications in the first two weeks since it went live for applications in May.
Since its launch the campaign has welcomed the government’s delivery of the scheme and P2P lending platform Assetz Capital announced plans to raise £1m via the fund matching £500,000 raised privately as part of a funding round on Seedrs.