UK tech continues to attract foreign investment
As a specialist M&A boutique, TheNonExec is pleased to see in Penningtons Manches‘s recent report that foreign investment into technology and IT remains buoyant, despite the current uncertainty created by Brexit.
Following a strong 2017, the UK’s thriving tech industries have continued to be a magnet for global investment throughout 2018 with record numbers of deals in 2018. Non-UK investment into emerging sectors was buoyant: Software was by far the most popular destination for both UK and foreign-backed deals, netting 222 of the 343 deals. This was followed by life sciences with 32 deals.
In terms of emerging sectors, fintech attracted the most amount of attention from non-UK investors – pulling in 31% of deals, then second was artificial intelligence at 21%, Blockchain at 8% and digital security 7%. Another hot topic for our manufacturing and technology clients, IoT, was in 6th place at 6%.
It is apparent that the leading companies for the UK’s thriving tech industry are still attractive to overseas investors with the Golden Triangle (London / Cambridge / Oxford) attracting the majority of investment due to its world-class universities, sought-after talent pool and creativity. The UK and in particular the Golden Triangle has worked tirelessly over the past two decades to create the burgeoning start-up economy that is giving global leaders in Silicon Valley a run for their money. Adding to this hotbed of academia and talent a robust legal system, business experience, a surge of talented entrepreneurs, mentors and the backing of a powerful financial industry has created the essential conditions for brilliant tech businesses to thrive.
US investors are still the biggest backers of UK tech, last year at 10%. The devaluation of the pound and competitively priced investment rounds have created ideal investment conditions for US companies to invest in UK tech.
UK companies have also received an unprecedented amount of investment from European funds in 2018. While deal numbers have remained relatively stable – 150 up from 149 in 2017, the value of these deals has increased by 14%. We continue to see optimistic activity from Europe, proving that while the political backdrop continues to evolve, the attraction of the UK’s ground-breaking technology scene remains strong. It will be an interesting situation to watch, hopefully our relationship with EU and European investors will remain as strong as the situation progresses.
If you are a tech or IT business owner thinking of an exit in the next three years the time is right to book a confidential exploratory session with TheNonExec Managing Director, Justin Levine, please click here or call 01202 828266.