Source: Pitchbook, Tech City UK, 2016

Over the past five years, the UK digital tech economy has attracted more venture capital (VC) and private equity (PE) than any other European country, standing at £28 billion.

This is testament to the UK being Europe’s digital epicentre. With impressive access to capital and skills, some of the world’s leading universities and a highly evolved digital tech ecosystem, the UK is a magnet for international investment.

In 2016, the overall number of VC and PE backed startup deals fell across the 10 largest European digital tech hubs , and digital tech investment was 34% lower than in 2015.

This is perhaps reflective of a broader global correction, following record inflows during 2015. It might also reflect a mood of increased caution amongst investors, in the face of heightened economic and political uncertainty across Europe and the US. Nevertheless, London remains a major centre for investment, attracting £2.2 billion in 2016, around £1 billion more than its two closest competitors, Amsterdam and Paris.

Source: Pitchbook, Tech City UK, 2016

The shape of digital tech investment in the UK is changing. Last year, two-thirds (over £4.6 billion) of such investment was recorded outside of the capital.

That is more than 50% higher than investment outside of London in 2015. Six clusters alone attracted nearly £700 million investment between them in 2016:

• Edinburgh – £159 million
• Cambridge – £153 million
• Bristol & Bath – £109 million
• Oxford – £106 million
• Manchester – £78 million
• Sheffield – £61 million

Source: Pitchbook, Tech City UK, 2016

Source: Pitchbook, Tech City UK, 2016

These figures testify to a diversifying investment landscape which, we believe, will provide a boost to regional economies and drive higher productivity across the nation.