Venture Capital to London Tech Companies Hits $1.2 Billion In Last Year

London continues to be Europe’s tech hub. In the last 4 quarters, the Silicon Roundabout has seen accelerating deal and funding momentum.

Over the past several years, London has asserted itself as a global capital for Fin Tech investments. But Fin Tech isn’t the only area London tech investors are excited about. Over the past four quarters, London-based tech companies saw a total of $1.23B in funding across 231 deals. Notably, the figure represents a 206% growth in funding and 178% growth in deals from the $400M and 83 deals in the same time period a year before (Q2’12-Q1’13).

 

London Total Tech Last

Early Stage Accounts for 44% of Total Funding

London-based early-stage tech companies raised more money than any other stage with $385M in the last four quarters, across 165 deals, up 336% from $124M on a funding basis and up 170% from 61 on a deal basis year-over-year. Q1’14 saw 7 of the 8 largest early-stage deals in the past year.  Interestingly, the top 4 largest deals were all in the Payments space giving more credence to London as a Fin Tech hub. Powa Technologies accounted for 2 of the deals with their mega Series A financing which closed in two tranches (August 2013 and January 2014). The other payments firms deals rounding out the top 4 include WorldRemit and Azimo.

Mid-Stage tech companies saw solid growth on a deal basis with 21 over the past four quarters versus 11 a year earlier, a 91% increase year-over-year, however funding was down 4% year-over-year with $290M over the past four quarters versus $303M. Q1’14 was a big quarter for mid-stage deals with 13 of the year’s 21 occurring then.  This included eCommera’s $41M Series C, SiteMinder’s $30M Series B, and Hailo’s $29M Series C.

Internet Sector Leads London Investments

Internet Software & Services companies saw the most funding of any tech area over the past four quarters with $537M across 124 deals. eCommerce companies were second with $461M over 46 deals largely buoyed by a $299M debt round raised by Trainline in September 2013.

London Industry Analysis

 

Local Investors Participated in 59% of Deals

Over 60 investors made more than one investment into London-based technology startups in the past four quarters. Of the top 5 active investors, three were UK-based.  Index Ventures led all investors in terms of number of deals. Octopus Investments, Oxygen Accelerator, US-based Accel Partners (who have a UK outpost), and Passion Capital rounded out the top 5.

UK-based investors participated in the majority of deals over the last four quarters. Unlike up and coming Berlin, which received only 13% participation from United States-based investors, incumbent tech hub London received plenty of interest from US-based investors which participated in 28% of city’s technology investments.  Outside of US, no other country accounted for more than 2%.

London Investor Analysis