London has strengthened its already dominant position as Europe’s leading tech hub this year by attracting double the level of investment of its nearest rival, Paris, fresh data reveals today.
The capital drew in $6.8billion (£5.2billion) of venture capital tech investment in the first half of 2024 as scores of firms, from legal tech firm Luminance to fintech giant Monzo, secured fresh funding.
“London is one of the best places in the world to launch and scale a business and the numbers speak for themselves.”
That was up 31 per cent from the $5.2billion seen in the same period in 2023, according to figures compiled by Dealroom for The London Standard. That puts it far ahead of the French capital, which has pulled in $4.2billion in the first six months. No other European city comes close, with third-placed Munich on $1.6billion, then Berlin on $1.4billion and Stockholm next with $1.35billion.
In fact, the figures show that London, with its innovation clusters in hotspots such as Shoreditch, Stratford and White City, attracts more venture capital tech investment than any metropolis outside America. By far the world’s biggest is California’s Bay Area centred around San Francisco and Silicon Valley, with $38.8billion of investment, well ahead of New York on $14.2billion and Boston with $8.8billion so far this year.
These figures show that London tightened its grip on the number one spot in Europe as the year has progressed. In the second quarter of the year there was $4.4billion of investment, up 47 per cent on 2023. The top five sectors attracting investment were fintech, transportation, enterprise software, energy and health tech. The data also reveals that We’re flying far ahead of anywhere outside US for tech investment.
London is currently home to 111 unicorns — defined as tech start-up companies with a value of more than $1billion — with five new unicorns (Wayve, EyeBio, Preqin, Intra Bio and Minute Media) in 2024 so far. London is the fifth largest globally for the number of unicorns — behind the Bay Area, New York, Beijing and Boston — and tied third with the Big Apple for new unicorns.
Janet Coyle, managing director of Grow London at the Mayor’s inward investment agency London & Partners, said: “London is one of the best places in the world to launch and scale a business and the numbers speak for themselves. “Sectors like fintech, energy and health tech are the most attractive to investors because of their growth potential. That’s exactly what venture capitalists are looking for — growth. And London is fully committed to supporting it, with our teams working flat out to help businesses grow globally.
“Companies in our Grow London Global accelerator, for example, grew 12.5 per cent to 15 per cent faster in the first two years after the programme than those who weren’t on the programme. It’s proof that Londonwe help them grow and succeed.” There also signs London is establishing itself as a major global hub for the cutting-edge “deep tech” sector, which includes areas like advanced computing, artificial intelligence, cyber security and biotechnology. Scores of new AI start-ups have been set up since the start of last year while several major tech firms have established London bases.
Last year, ChatGPT maker Open AI established its first overseas office in Westminster, while US firm C3 AI relocated its European headquarters from Paris to London’s South Bank, and billion-dollar American drug discovery business Recursion set up an AI unit in King’s Cross. A London Standard analysis found that the UK’s top AI entrepreneurs had amassed personal fortunes worth more than £3billion by the end of last year. “What we’re seeing is the benefit from deep-tech ecosystems which take years to form because you need multiple parts of the equation: not just the research but the capital and top talent,” said Max Bautin, managing partner of IQ Capital. “It takes time to get the ecosystem to a level where it can produce great companies systematically that can achieve a market share in the long term. Thirty years in we are starting to really reap the benefits.”
“It’s testament to the resilience of London that it has performed so well over the past 15 years — it is still a vibrant, dynamic international city,” said Neil Lee, professor of Economic Geography at the London School of Economics and author of Innovation for the Masses: How to Share the Benefits of the High-Tech Economy. “Much of that success has been down to luck rather than careful economic strategy — but providing stability is not enough.
London has been good at producing leading-edge innovation but we need more policies that will help diffuse that technology across to other parts of the UK. “It’s great to have a new AI firm in London but you also need to be able to convince a factory in Stoke or Stockport to incorporate that technology into its own production lines.”
