Scotland’s tech industry continues to go from strength to strength in 2022 as Digital Minister Chris Philp announced figures which showed the wider UK sector is now worth $1trn in value.
Scotland has two of the UK’s top five cities when it comes to tech investment so far in 2022, with companies from Edinburgh and Glasgow raising a combined £115m of investment, according to figures calculated by Dealroom and analysed for the UK’s Digital Economy Council.
Some of the notable names include audiobook app PocketFM, which recently raised £50m in a Series C round that placed the company as a 'futurecorn' - a high-growth tech company worth between $250m and $750m in value - and Glasgow-based regulatory technology provider Encompass Corporation, which raised £25m in March.
Scotland also has the highest regional salary at £49,288 - outside of London and the South East - with Edinburgh having the highest average advertised salary of £58,405.
The figures follow a bumper 2021 for Scotland, with companies across the country raising a collective £228m through more than 50 venture rounds, indicating a rising class of early-stage companies that could go on to become future tech giants. Among those include health technology firm Current Health, meal box service Parsley Box and tidal energy company Nova Innovation.
The Scottish capital has also produced two unicorns - high-growth tech companies worth more than $1bn - Skyscanner and FanDuel.
Skyrora, the space launch vehicles start-up, is predicted to reach this same valuation in the next few years.
The UK’s digital economy is now worth more than double that of Germany’s and almost five times larger than France and Sweden.
The pandemic has triggered a wave of tech adoption, from digital health apps, to education platforms, video conferencing and e-commerce.
In 2018, the UK tech ecosystem was valued at $446bn and was steadily growing until 2020, when it surged 42% to $942bn. This has helped to catapult the valuations of many companies from unicorns to the rarer 'decacorns' - companies worth $10bn or more.
The UK is now home to 13 decacorns, of which 10 have gone on to IPO, and are the most highly valued tech companies in the country. They include Markit, WorldPay, Checkout.com, Revolut, ARM, FNZ, Wise, Rapyd, Ocado, Admiral, eToro and Deliveroo.
Research by the Department for Digital, Culture, Media and Sport last year found that the UK digital sector is on track to add £190bn in value to the UK economy by 2025, while Scotland’s digital economy is predicted to grow by at least £2.2bn in annual Gross Value Added - and add a further 34,000 jobs over the next three years.
Wayne Johnson, co-founder at chief executive of Encompass Corporation, commented: “The Scottish tech industry has been punching above its weight on a regional level for some time, and it has been great to see, and be part of, its growth.
“We’re delighted to be at the heart of what is a thriving community and are grateful to have received wonderful support in Scotland, which has been vital to the continuing success of our business.
“One of the reasons we chose to have a base in Scotland was because of the vibrant and innovative tech ecosystem we found there, and these latest figures just go to show what a good decision that was.”
Digital Minister Chris Philp said: “The UK tech industry has gone from strength to strength in the past few years and all this hard work and dedication is paying off now that it's become the third ecosystem in the world to reach $1trn in value.
“It’s brilliant to see how every tech company in the UK, from early-stage startup to global leading decacorn, has a part to play in lifting up the ecosystem and making it thrive.”
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