Over the last six months, VC investment in London has been driven by the FinTech sector, with firms like Funding Circle, Azimo, WorldRemit and Currency Cloud raising $472m (£302.56m) – equivalent to 40 per cent of the total amount raised in London.

In April, Funding Circle raised $150m (£96.17m). Samir Desai, CEO and co-founder of Funding Circle said: “London continues to be a fantastic place to grow a financial technology company. In just five years, the Funding Circle marketplace has become the fifth largest net lender to small businesses. The money we raised in April will allow us to go on to create a sustainable, category-defining business in a multi-billion dollar global market.”

The figures, which had been compiled by London & Partners at the beginning of July, showed that VC investment into UK tech firms during the first six months of 2015 eclipsed the same period in 2014. The data comes after research from GP Bullhound, which was released at London Technology Week 2015, revealed that Britain had 17 tech unicorns – 13 of which were in the capital.

Eileen Burbidge, partner at Passion Capital and the Mayor of London’s tech ambassador for the city, said: “Last year it took London tech firms nine months to reach the billion dollar mark, this year they’ve done it in six months. The city has become such a tech powerhouse because it excels over other tech hubs around the world. London combines the technology and digital innovation of Silicon Valley with the Wall Street financing heritage of New York and the policy making of Washington DC – all in one phenomenal city.”

Read more on venture capital:

• The European VC investment trends that took place in Q1 2015
• A look at the most active UK equity investors in the seed, venture and growth space during 2014
• North East holds its own in number of private equity and venture capital-backed businesses

London’s tech startups are continuing to secure record levels of funding. DoPay, a FinTech company that graduated from the Barclay’s Tech Stars accelerator programme in 2014, raised $2.4m (£1.54m) in two separate deals. Frans van Eersel, CEO of DoPay said: “Access to this kind of early-stage funding is crucial for companies like us. The money will allow us to push ahead with our growth across Egypt and expand into new markets across West Africa.”

The digital tech sector in London is forecast to boost the capital’s economy by £18bn in 2015, according to research from Oxford Economics. The report also showed the number of companies in London’s digital technology sector has grown by 46 per cent since the launch of the Tech City programme. 

The latest “Venture Pulse Q2 ’15” report from KPMG International and CB Insights has also revealed that tech deals accounted for 63 per cent of all investments to European VC-backed companies in Q2 2015. 

Barry Carter, head of technology for KPMG Deal Advisory, said: “In the wake of high-profile listings such as that of Sophos and other mega funding deals, there’s no doubt that the UK tech sector is the place to be right now, with disruptive technologies and applications in particular spurring sharp interest and investment from the VC community. Indeed, the growth of new on-demand platforms continues to be particularly robust. This trend, which escalated with Uber and Airbnb, is now expanding into new verticals and new geographies.”

He claimed that an important factor underpinning the appeal of the sector for investors is the drive across Europe to foster ecosystems that create the perfect conditions for technology companies to thrive. For example, as London has continued to capitalise on its strong startup community and culture, this has rippled across the rest of the country – “making it no surprise that the tech hubs of Brighton and Cambridge ranked alongside London as the top three destinations for VC investment in the UK.”

Image: Shutterstock

By Shané Schutte