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UK Technology Sector Overview: Opportunities and Threats

If you’re looking for opportunity, the UK technology sector is overflowing with it.

Unsurprisingly, foreign direct investment (FDI) in the UK was at a 6-year low in June amidst ongoing uncertainty surrounding Brexit. However, FDI in UK technology companies soared to a record of £5.5 billion in the first 7 months of 2019. This flow of capital is mostly coming from American and Asian investors, which analysts deem to be motivated by the weaker pound and their desire to hedge against the US-China trade war. A notable example includes Softbank’s investment of $800 million into Greensill, a non-bank provider of supply chain capital.

Of the 69 unicorns (companies valued at over $1 billion) born in Europe, 26 of these are UK-based, with an average valuation at just over $2.2 billion. A key driver behind these high valuations is the £28 billion in capital poured into the sector between 2011 to 2016, which surpasses the total amount invested in technology companies within France, Germany and the Netherlands combined. Aside from capital sources, Brexit could harm other aspects of the technology sector. As it stands, 1 in 5 technology workers in the UK are from the EU; and without investing in domestic talent, business immigration policies will determine which non-UK Europeans can freely travel and migrate for work. The outcomes of these policies will play a large role in determining whether or not British companies succeed.

Furthermore, the UK technology sector is not limited to London alone, with 30 technology hubs nationwide spreading from Edinburgh to Exeter. According to TechNation, the top location for digital and technology businesses is not in London, but Reading, an hour by train from central London and generating 13% of the nation’s digital technology revenues. Towards Oxford is Thames Valley, where you find the highest density of technology companies nationwide, with the Thames Valley Science Park hosting 70 companies alone.

Now is the time to be building, growing and working within the UK technology space. At RLC we are partnering with ambitious founders who are looking to harness technology to disrupt and influence Enterprise, AI, Gaming and FinTech. If you are seeking investment or looking to build a world-changing company, then please get in touch through info@rlc.ventures or through a mutual contact.

 

Sources:

https://www.great.gov.uk/international/content/industries/technology/

https://www.bbc.co.uk/news/business-49413186

https://technation.io/insights/report-2018/reading/

 

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