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Ever since the UK voted to leave the European Union, there has been an expectation that London’s position as the leading tech hub in Europe would come under threat.
The country might be 18 months from the formal exit date, but at the moment, investors are showing no sign of losing their appetite for spending money in the capital.
Data pulled by London & Partners, the Mayor of London’s promotional agency, from Pitchbook shows that more than $1.5 billion (£1.1 billion) of venture capital funding has been ploughed in to London’s tech sector over the last six months. The figure is the highest ever recorded and is almost double the amount recorded in the same period last year.
Surprisingly, given the number of negative headlines, London is also outperforming its peers across Europe. Since the Brexit vote last June, London has secured $2.4 billion (£1.8 billion) in VC funding across 544 deals.
Paris, though, outshone London when private equity deals were included — potentially a worrying sign of things to come for the UK capital.
Table showing venture capital, private equity and M&A investment into London tech companies versus other major European cities since Brexit (23rd June 2016)
Pitchbook analysis conducted on behalf of London & Partners. Sourced May 31 2017
London is also home to plenty of financial technology startups, some of which are proving popular with travelers. The likes of Monzo and Revolut, which have both raised millions over the past year, offer pre-paid currency cards with near-perfect exchange rates.
Laura Citron, Chief Executive of London & Partners, said: “London remains Europe’s leading hub for global investors. The Brexit vote has understandably created some uncertainty, but it is no surprise to see that London continues to attract more than double the amount of investment than any other European city.”
Upping their game
While London is currently in a healthy position, Brexit has the potential to derail any progress. The UK looks set to leave the single market, which allows businesses to seamlessly access a market with 500 million people. New agreements will also need to be made governing industries such as aviation. The terms of the UK’s deal are still yet to be decided and Prime Minister Theresa May’s poor election performance has put her in a weaker spot.
The rhetoric around Brexit appears to have softened of late, and this could result in a longer period of transition than had previously been expected.
Rival cities, though, are keen to talk up their credentials as tech hubs. Station F, a huge start-up campus based in Paris’s 13th arrondissement, opened at the end of June, and Factory Berlin generates buzz with its strategy of connecting startups and established companies in the German capital.
While London remains Europe’s biggest start-up center, the question is: How long will that last?