The UK has attracted the most VC Investment over any European country in the last year! Find out why we think this has made such a positive impact on the economy, especially during the pandemic.
What are VC Investments?
For those of you who may be unfamiliar about what Venture Capital investments is, it’s simply a form of private equity financing that’s provided by VC firms or funds to help start-ups, early-stage and emerging companies that are predicted to have high growth and potential.
Over the last 12 months, Venture Capital firms have massively helped drive the growth of innovative start-ups in the UK by identifying companies with huge potential and have given them a cash injection to help these businesses achieve their goals and develop as a company.
Venture Capital investments in the UK are currently walking hand in hand with so many start-up companies, tech ‘unicorns’ and emerging business ideas, so no wonder the VC marketing is the highest it has ever been despite being in a global pandemic.
Last year alone, UK tech firms raised a record £11.2 billion in VC funding – including seven emerging ‘unicorns’ (start-up with a value of over $1 billion). The money raised through VC in the UK was at a higher total than the rest of Europe for 2020, including investment cycles for companies like Octopus Energy, GymShark, Gousto and Arrival.
Since the UK now has more ‘unicorns’ compared to any other country in Europe, it makes sense why we’re now breaking records with a current total of $15 billion in comparison to the previous year with $14.8 billion.
The Importance of the VC Uprise
Some of the biggest companies in the world today have benefitted from the cash injection a VC firm brings, including the likes of Facebook, WhatsApp, Google and Twitter. After the market crash in 2007, companies like Uber and Airbnb were born out of the recession; and only survived due to the investment from Venture Capital firms.
With the rise of the VC investments, especially during Covid-19, it has already had an extremely positive impact on the economy and has been able to generate thousands of jobs especially within the tech industry.
“London is the global tech capital of Europe. Despite the challenges brought about by Brexit and the coronavirus pandemic, London’s tech sector continued to thrive in 2020 and has an important role to play in the city’s economic recovery.”- Mayor of London Sadiq Khan.
Whilst the outbreak of the pandemic hit the world extremely hard, job vacancies in the UK dropped drastically at the height of the crisis in July 2020. However, jobs in the tech industry climbed back up 50% and are still rising all because of the increase in VC investment in the country.
Remote working has become the new way of life with the dramatic increase of working from home roles in 2020, which has enabled cost cutbacks for businesses that have this opportunity. Not only this, but companies also have the advantage of gaining more access to all kinds of talent in the industry, than being restricted to the main cities.
“It’s fantastic to see the UK’s tech companies flourishing, despite all the challenges of 2020. The thousands of high skilled jobs they are creating will be a crucial part of our economic recovery.” – Oliver Dowden – The Digital Secretary.
Although the last year has been extremely difficult for many companies and employees, there is also a great deal to be hopeful about – and in terms of the future of businesses in the UK we should expect to see a ‘boom’ in both employment rates and revenue; with investments from VC firms at the very heart of that.