Fintech continues to dominate the London tech fundraising scene, accounting for 39% of VC investment in the UK capital's technology companies so far this year, according to a report which claims that the sector is showing resilience during the Covid-19 crisis.
London-based tech firms have pulled in $4 billion from VCs so far in 2020, more than Paris, Stockholm, Berlin and Tel Aviv combined. Of this $4 billion, 39% went to fintech firms, says the report from Tech Nation and Dealroom for the Digital Economy Council.
Overall, the report argues that the UK’s tech sector went into the coronavirus crisis in February in a strong position. From January to the end of May, tech companies raised $5.3 billion, compared to a total raised in the rest of Europe of $4.1 billion.
However, there are concerns that many of these deals were agreed in principle before the onset of the virus, which has reset expectations. Capital inflows in the second half of the year are unlikely to be as strong as those in 2019, warn the authors.
About two thirds of startups expect revenues to drop by more than a quarter, while two-fifths believe they have less than 12 months of funds and almost a half have frozen hiring.
Advertised vacancies were continuing to climb at the start of 2020 before the coronavirus and lockdown took its toll. Even so, more than 90,000 tech sector jobs were being advertised at the end of April - twice the number of openings in accounting and finance, the next sector with the most vacancies.
The Mayor of London, Sadiq Khan, says: “The tech community in London and across the UK has risen to the challenges posed by coronavirus, demonstrating the sector’s resilience and innovation. This new data shows the strength of the industry and I remain confident that London’s position as a global tech hub will continue as we move towards recovery.”