Key takeaways - Dealroom.co...London startups also attract high levels of international investor...

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Key takeaways

● VC investment into London's tech sector remained resilient in 2020 despite the global pandemic with the capital’s tech companies raising a total of $10.5B in VC funding last year – close to the record levels ($10.7B) seen in 2019

● The future outlook for London’s tech scene looks promising – London VC firms raised record levels of fresh capital to deploy in 2021, Europe’s largest number of future unicorns and high levels of investment across some of the fastest growing global sectors for tech VC funding

● London is the driving force behind Europe’s tech ecosystem – with the UK capital accounting for more than a quarter of all European venture capital investment in 2020 and significantly higher levels of VC investment than any other European city over the past five years

● On the world stage, London is Europe’s truly global tech city, ranking as the second fastest growing tech ecosystem in the world since 2016 and consistently featuring as the only European city in the global top 10 for VC investment

● London’s tech sector is showing increasing levels of maturity, with growing levels of a later-stage funding and a more internationally diverse mix of investors entering its ecosystem

Source: Dealroom.co.

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Venture capital investment in London

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May 2020

Top rounds in London 2020

$500MSeries D

$500MGrowth Equity

$400MGrowth Equity

£300MLate VC

£252MSeries A

$310MSeries D

$200MSeries A

$200MSeries D

£150MGrowth Equity

$150MSeries B

$125MSeries B

$120MSeries B

London tech companies raised near record investment in 2020, accounting for more than a quarter of all European venture capital investment.

20202019201820172016


$3.5B

$6.4B

$5.7B

$10.7B $10.5B

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May 2020

London is the only European city in the global top 10 for VC investment since 2016.


Beijing

San Francisco

New York

Shanghai

London

Bengaluru

Boston

Singapore

Cambridge, US

Los Angeles

$131.0B

$108.0B

$76.5B

$59.8B

$36.7B

$23.5B

$19.8B

$19.7B

$18.0B

$15.6B

Total VC investment global hubs 2016-2020

VC investment global hubs: 2016 vs. 2020 2016 2020

Bengaluru $1.3B $7.2B

London $3.5B $10.5B

Munich $0.3B $0.7B

Berlin $1.2B $3.1B

Paris $1.3B $3.3B

Mumbai $0.7B $1.2B

San Francisco $14.3B $21.5B

New York $11.0B $15.2B

Toronto $0.7B $1.0B

Shanghai $7.9B $10.5B

Shenzhen $1.5B $1.5B

Beijing $22.2B $16.6B

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London has been the second fastest-growing mature tech ecosystem in the world since 2016, with investment growing 3.0x in five years.

Bengaluru

London

Munich

Berlin

Paris

San Francisco

Shanghai

Toronto

New York

Mumbai

Shenzhen

Beijing

5.4x

3.0x

2.7x

2.5x

2.5x

1.5x

1.4x

0.7x

1.0x

1.4x

1.3x

1.7x

Source: Dealroom.co. Note: Rounding to one decimal place in visualization, growth is computed on exact amount. Excludes smaller tech hub outliers where year-on-year fluctuation can be inconsistent.

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May 2020

2020 was a not only a strong year for London – global and European VC showed resilience despite the pandemic.


Global venture capital investment

London

Rest of Europe

Rest of World

Asia

United States

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VCs in London have record levels of dry powder ready to deploy in 2021 and beyond, having raised $12B in 2019 and 2020 alone.


New funds raised by VCs in London

0M-$50M

$50M-$100M

$100M-$250M

$250M+

Seed Series A+ Growth stage

$140MFeb 2019

$2BApr 2020

€700MDec 2020

$115MJun 2019

$820MFeb 2020

$375MMar 2018

$100MApr 2020

$735MFeb 2020

€300MMar 2019

£81MSep 2020

$500MNov 2019

Latitude: $180MDec 2018

£78MNov 2020

$400MSep 2020

£110MOct 2020

New funds raised by European VCs

$1.7B

London Paris Berlin Amsterdam

$2.7B

$5.8B

$4.0B

$7.8B

$1.0B

$2.3B$2.0B

$1.2B $1.3B

$0.4B

$1.5B

$0.3B

$1.7B $1.5B

$1.0B

$0.1B$0.3B $0.6B $0.7B


20202019201820172016 20202019201820172016 20202019201820172016 20202019201820172016

London is the preferred destination for VC investors – a third of new European funds have been raised in London in the last two years.

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London startups also attract high levels of international investor interest, particularly at later stages of growth.

Source: Dealroom.co.Note: The labels “Seed”, “Series A” are standardised labels per Dealroom.co method, not the reported labels as they are not consistently applied.

Domestic

Cross-border European

Rest of World

Asia

USA and Canada

% of investment in London (2019-2020) by source and round size

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London startups have a more internationally diverse mix of investors compared to other European tech ecosystems, with 57% of capital coming from outside Europe.

Source: Dealroom.co estimates.

% of foreign investment (2019-2020) by city and source

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Global VC funding in five fastest-growing sectors (2016-2020)

London’s biggest sectors for VC investment are also among the fastest-growing global startup sectors.


Venture capital investment in London by sector (2020)

Transportation

Food

Enterprise Software

Cybersecurity

Real Estate

Health

41%

17%

14%

7%

7%

6%

5%

6%

Fintech

Energy

Health

Transportation

Fintech

Enterprise Software

Food

$139.6B

$71.6B

$108.0B

$73.9B

$41.4B

$102.5B

$71.2B

$45.9B

█ Europe █ USA █ Asia

$210B

$189B

$178B

$165B

$88B

$28.7B

$14.7B

$33.4B

$26.4B

$9.9B $32.4B

$30.2B

Page / 12 Source: Dealroom.co. Note: Rounding to one decimal place in visualization, growth is computed on exact amount.

In 2020, London raised almost half of all Europe’s fintech capital.

Amount invested in fintech startups

Top London rounds in 2020

VC investment in fintech by city 2019 2020 % change

London $5.5B $4.3B -22%

Paris $0.6B $0.7B +5%

Berlin $1.3B $0.5B -60%

Stockholm $1.0B $1.1B +15%

Amsterdam $0.1B $0.2B +77%

Munich $0.1B $0.1B -17%

$500MSeries D

$500MGrowth Equity

$150MSeries B

London

Rest of Europe

$3.2B

$5.6B

$8.8B

$5.1B

$10.7B

$1.9B

$1.3B

$2.9B

$2.2B

$3.4B

$2.2B

$5.5B

$5.2B

2016 2017 2018 2019 2020

$4.3B

$4.5B

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Enterprise Software investment in London is double that of any other European city, and continued to grow in 2020.

Amount invested in enterprise software startups


VC investment in enterprise software by city

2019 2020 % change

London $1.0B $1.9B +82%

Paris $0.7B $1.0B +35%

Berlin $0.7B $0.6B -13%

Stockholm $0.1B $0.0B -71%


Munich $0.5B $0.2B -61%

$200MSeries A

$200MSeries D

$80MSeries E

$0.5B

London

Rest of Europe

$3.1B

$4.5B

$7.0B

$4.6B

$7.4B

2016 2017 2018 2019 2020

$2.6B

$3.4B

$1.2B

$3.5B

$1.0B $1.0B

$6.4B

$1.9B

$5.1B

Source: Dealroom.co. Note: Rounding to one decimal place in visualization, growth is computed on exact amount.

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Amount invested in transportation startups

Investment into London-based transportation startups has grown 7.5x in five years.


VC investment in transportation by city 2019 2020 % change

London $0.3B $1.5B +340%

Paris $0.2B $0.1B -51%

Berlin $0.8B $0.8B -5%



Munich $0.6B $0.1B -86%

$400MGrowth Equity

$310MSeries D

£150MGrowth Equity

2016 2017 2018 2019 2020

$1.1B

$3.0B

$x.xB

$4.8B

London

Rest of Europe

$1.5B

$3.3B

$1.9B

$4.0B

$0.3B

$3.7B

$2.9B

$1.8B

$0.9B

$0.1B$0.1B$0.2B


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London healthtech startups collectively raised more than any other European hub.

Amount invested in healthtech startups


VC investment in healthtech by city 2019 2020 % change

London $1.0B $0.7B -29%

Paris $0.7B $0.5B -31%

Berlin $0.4B $0.4B -5%

Stockholm $0.1B $0.3B 287%

Amsterdam $0.0B $0.1B 270%

Munich $0.1B $0.2B +68%

$80MSeries B

$70MSeries B

$30MSeries A

London

Rest of Europe$3.7B

$5.7B

$8.3B

$3.9B

$7.2B

2016 2017 2018 2019 2020

$3.4B

$0.3B

$3.2B

$0.7B

$5.3B

$0.4B$1.0B

$6.2B

$0.7B

$7.6B


$100MConvertible

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Growth does not make sense to show in percentage

London-based Karma Kitchen raised Europe’s biggest foodtech round in 2020.

Amount invested in food startups


$333MSeries A

$70MSeries C

$41MLate VCLondon

Rest of Europe

$0.9B

$1.5B

$2.6B

$1.9B

$3.0B

2016 2017 2018 2019 2020

$0.6B

$0.3B

$1.5B

$0.4B

$1.4B

$0.1B

$0.8B

$2.2B

$0.6B

$2.0B


VC investment in foodtech by city 2019 2020 % change

London $0.8B $0.6B -21%

Paris $0.1B $0.2B +63%

Berlin $0.2B $0.2B -11%


Amsterdam $0.2B $0.0B -94%

Munich $0.0B $0.0B +34%

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Unicorns

Future Unicorns

Fintech ranks #1 in Europe and London for unicorns and future unicorns.

1) A unicorn is defined as a rapidly scaling company (and tech-enabled) that has reached a $1 billion valuation, on the basis of a funding round (unrealised), acquisition or IPO (realised). Potential future unicorns are companies valued xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Unicorns and future unicorns by industry in LondonEuropean unicorns and future unicorns by industry

Fintech

Health

Enterprise Software

Transportation

Energy

Cybersecurity

8347

8741

7053

3018

26

157

Food 17

Marketing 2515

4

Energy 1 5

Travel 1 2

36

20

3

4

3

Fintech

Enterprise Software

Marketing

Health

Fashion

Transportation

9

5

7

18

3

4

1

Cybersecurity

Energy


12

3

1 5

51

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Number of future unicorns by city

London

Berlin

Paris

Amsterdam

Stockholm

Munich

Hamburg

Manchester

Cambridge, UK

Madrid

Copenhagen

43

11

11

9

9

5

4

3

3

2

2

London

Paris

Berlin

Munich

Cambridge, UK

Dublin

Amsterdam

Barcelona

Stockholm

Madrid

Zurich

81

42

32

11

9

9

7

7

6

5

5

Number of unicorns by city

London is the unicorn capital of Europe.


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Methodology and definitions

• Investment numbers refer to venture capital investment rounds such as seed, series A, B, C, …. late stage, and growth equity rounds. It excludes debt or other non-equity funding, lending capital, grants and ICOs.

• Buyouts, M&A, secondary rounds, and IPOs are treated as exits: excluded from funding data, but included in exit data.

• A unicorn is defined as a rapidly scaling company (and tech enabled) that has reached a $1 billion valuation, on the basis of a funding round (unrealised), acquisition or IPO (realised).

• There are some notable edge-cases:

○ Companies that IPO-ed at or above $1 billion but subsequently dipped below that valuation, are still included as a $1B+ exit (examples: Alfa, Rovio, eDreams).

○ Some companies have at some stage reached a $1 billion but subsequently raised, IPO-ed or were acquired below that value. In this case the company is not counted as a unicorn (examples: Blippar, Home24).

○ If a unicorn moved HQ, the company is counted in the country where it reached unicorn status. Occasionally companies received dual HQ status.

• A future unicorn is defined as a tech driven company valued at over $250 million but less than $1 billion, excluding acquired and/or public companies.

• This report focuses on companies in the information age, i.e. after 1990. Most (but not all) unicorns are VC backed.


Key takeaways - Dealroom.co...London startups also attract high levels of international investor...

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