Tech sector suffering?

London tech firms receive £1bn in funding since EU ref


There's still investment in tech in London - despite the spectre of Brexit

Investors haven't stopped putting money into London startups, despite the looming threat of Brexit. Since the turn of the year, venture capitalists have invested £395 million in firms based in the capital, up from £245 million in the preceding three months.

Since the referendum to leave the European Union, London tech firms have received more than £1 billion in funding, over 70 per cent of the total £1.59 billion invested into UK tech during that period.

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London: the capital city of capital in tech firms

Despite the uncertainty of Brexit, the UK's tech sector is still thriving and London is at the heart of it.

The tech sector is growing faster than the entire UK economy, with the digital economy growing at around £97 billion a year - an increase of 30 per cent in five years. The sector is not London-centric, either, with 72 per cent of venture capital and private equity investment going to regional businesses last year, the Telegraph reports.

Investment in the tech industry has been driven by AI, robotics and big data, according to Tech City News. London's AI and machine learning firms have become especially attractive, drawing in 20 times more investment last year (£85.75 million) than the amount raised in 2011 (£3 million).

The UK still leads in Europe when it comes to technology investment, attracted £28 billion in investment since 2011, over double of France's amount (£11 billion) and well ahead of Germany (£9.3 billion).

However, over half of workers (58.2 per cent) in the tech sector believe that Brexit will hamper the UK's high position within the global tech industry. The impact of Britain leaving the European Union has already been felt, with one in 10 tech companies experiencing investors withdrawing or holding back funding since the outcome of the vote.

The Business Insider warns that London is in danger of becoming the "tech capital for dumb money", arguing that the capital is facing a reputation problem. While tech startups, by their nature, are likely to fail, with venture capitalists expecting nine out of 10 investments to disappear, there is a lack of discipline from investors in London.

They argue that investors should have known to stay away with failures such as Powa, photo-sharing app Fling and music social media, Crowdmix. Although they were flawed ideas from the very start, with Business Insider calling them outdated, the startups were still given tens of millions of pounds before going bankrupt.

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London tech sector under threat from lack of investment in talent, technology and innovation

London's position at the forefront of global finance is being threatened by a lack of investment in talent, technology and innovation, according to a new report from Level39.

The survey of Level39's 900-strong community found that most think a shortage of talent is the biggest threat to banks and financial institutions in the UK (19%), followed by a lack of investment in research and development (17%) and digital disruption (15%). International competition (15%) was also highlighted as a major risk to the capital's financial sector.

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