A recent report in the Financial Times claimed that venture funding for London-based start-ups reached $1.4bn in 2014, double the amount in the previous year and twenty times that four years ago. This represents 65% of the UK’s $2.2 tech venture funding last year.
Clearly an impressive growth, though according to Deloitte, the UK still lags behind the US, Germany, Canada and Israel in terms of VC confidence.
The Financial Tech industry takes most of the headlines and is the poster boy for the London tech scene, but what sort of tech companies is London, and the wider UK entrepreneurial base producing? A quick sifting of numbers from Crunchbase, the database of start-up activity throws some interesting results:
Caveat Emptor applies here, as this chart is only as reliable as Crunchbase’s company classification system and some quick and dirty assumptions of my own. I was somewhat surprised that FinTech companies don’t represent a larger share of the pie, though these are a subset of over 200 companies in the financial services. It should however not be a surprise that “cloud computing” companies form the largest category, given that most tech companies now build on cloud-based infrastructure. A quick perusal through the Crunchbase list throws up companies as diverse such as QuickBlox, a provider of web-based communications services, ProofHQ, an online document review platform and Leaf.fm a social-music site. However, what stands out to me is the sheer diversity of tech areas represented, particularly the security field and the related predictive analytics, machine learning, natural language processing and Artificial Intelligence domains, many of which are spin-outs from university mathematics and computer science departments. A good representative of the growing band of cyber-security companies is Digital Shadows, a London-based company that scours the Internet to provide companies with intelligence relating to threats to reputation, brand and potential data loss. In this age of multi-billion IPOs and valuations, it is likely to be only a matter of time before one of these companies exceeds the $400m spent by Google in its acquisition of DeepMind a year ago.