The GDP figures weren’t the one encouraging piece of stories to cross the desk of Rachel Reeves, the brand new chancellor, on Thursday.
There was additionally information that the UK has retained its crown because the primary vacation spot in Europe for funding by enterprise capital within the tech sector.
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Knowledge printed by Dealroom, the worldwide supplier of information and intelligence on start-ups and tech ecosystems, revealed that UK start-ups and scale-ups raised £7.4bn through the first six months of the yr.
That was up 16% on the identical interval final yr and accounted for practically one-third of all enterprise capital funding in Europe through the six months.
UK tech corporations raised greater than their friends in France and Germany mixed and greater than 5 occasions their friends in Switzerland.
That was helped by numerous massive funding rounds accomplished by particular person companies, led by Wayve, the autonomous automobiles know-how agency. It raised £861m from traders in Might and welcomed Rishi Sunak, the previous prime minister, to its headquarters on the day the fund-raise was introduced.
That month additionally noticed the credit score know-how firm Abound elevate £400m whereas Highview Energy, the long-duration vitality storage agency whose backers embody the UK Infrastructure Financial institution and Centrica, raised £300m final month – most of which is to be invested in what it hopes would be the UK’s first commercial-scale liquid air vitality storage plant.
Different main fundraisings by UK tech corporations through the first half of the yr included ones by the web financial institution Monzo, which raised £150m in Might and the electrical automobile charging group Char.gy, which final month raised £100m.
Extra to come back
The second half of the yr seems to be set to be simply as robust.
The figures from Dealroom come a day after Index Ventures, the worldwide enterprise capital agency well-known for backing the most important variety of UK unicorns (start-ups to have achieved a valuation of $1bn or extra), introduced it had raised $2.3bn in two new funds to put money into start-ups – a bit of which is anticipated to be deployed within the UK.
Dealroom’s figures recommend that tech corporations specialising in vitality attracted the lion’s share of funding through the first six months of the yr, attracting some £4.3bn throughout Europe, with corporations energetic within the generative AI house attracting some £2bn of cash.
London is Europe’s centre for tech
The figures additionally reveal that London has maintained its place as Europe’s main centre for tech funding through the first half of 2024.
Begin-ups and scale-ups primarily based within the UK capital attracted some £5.3bn in funding through the interval – greater than twice as a lot as second-placed Paris, whose start-ups attracted £2.4bn in funding and greater than 5 occasions as a lot as third-placed Stockholm, whose start-ups raised £940m.
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Cambridge, residence to celebrated chip designer Arm Holdings, was additionally amongst Europe’s prime 10 funding locations, with its corporations attracting some £517m, up 83% on the identical interval in 2023. Cambridge-based corporations that raised cash through the interval included Luminance, the legal-focused generative AI enterprise, which raised £321m in Might.
Jeannette zu Furstenberg, managing director and head of Europe on the international VC agency Basic Catalyst, stated: “These figures are very encouraging and show how Europe generally is a key participant within the immense financial alternative unleashed by AI, which I wish to name a European RenAIssance.
“Leveraging the ability of AI to bolster European productiveness and progress we imagine will probably be key when constructing globally profitable know-how corporations on this continent.
“The uptick in late-stage funding in the first half of this year we think demonstrates the appetite for Europe’s most ambitious companies.”
Hopes for the long run
The figures will elevate hopes for enterprise capital funding, which fell sharply from mid-2022 as rate of interest rises all over the world started to chew.
Individually, the British Enterprise Financial institution – the UK’s state-backed financial growth company, has printed figures suggesting that the UK has leapfrogged India to turn out to be the world’s third-biggest enterprise capital market to path solely the US and China.
The figures come only a week after Mr Sunak, who was seen as an enthusiastic backer of UK tech, was ejected from workplace by voters.
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Nonetheless, regardless of Mr Sunak’s vocal help for UK tech, the sector was continuously disillusioned by his authorities’s curbs on visas – making it tougher to draw abroad expertise.
The sector is, accordingly, eager to listen to what Labour has to supply it.
The social gathering’s manifesto had little to say about funding in tech start-ups and the tech sector has modified past all recognition because the final Labour authorities left workplace in 2010.
However it’s hopeful {that a} extra supportive strategy to expert migrants may additional entrench the lead of UK tech start-ups over their friends in continental Europe – significantly in areas corresponding to serving to to commercialise the mental property and analysis coming in a foreign country’s universities.
