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London ranks as Europe’s top destination to grow a startup business

Credits: Akshata Murty’s Instagram

London has been ranked as the second-largest tech hub in the world, alongside New York, and second only to Silicon Valley. Further, the UK capital is one of the fastest-growing ecosystems in Europe. It’s also known for its large concentration of capital, a vibrant community, and an increasingly international talent pool, due in part to being considered an exceptional location to found and develop a tech startup.

There’s no shortage of accelerators or tech events here either; it is home to some of the industry’s biggest companies and most successful entrepreneurs. Additionally, the UK government supports startups even more than ever before as part of their commitment to building a global hub for innovation

Startup Genome report

A new report from Startup Genome reveals that London continues to retain the first spot when it comes to setting up and grow a tech startup. 

Launched at London Tech Week (LTW), the 2022 Global Startup Ecosystem Report placed London as the world’s number two startup hub alongside New York and second only to Silicon Valley. 

For starters, London Tech Week is the UK’s flagship technology event that brings together 20,000+ global government and corporate leaders, inspirational startup founders, senior investors, and tech rising stars together to discuss the power of technology for societies. 

The report says that London’s startup ecosystem has demonstrated its resilience despite Brexit and the pandemic, securing the second spot for the third year consecutively. 

The findings also revealed London’s status as the undisputed tech capital of Europe at $314B, significantly higher than the likes of Berlin ($94B) and Paris ($89B).

Mayor of London Sadiq Khan says, “London is the undisputed tech and innovation capital of Europe, and this independent report demonstrates that our start-up ecosystem is also one of the most diverse and vibrant in the world. The record levels of investment we’ve seen so far this year offer further proof that London’s tech sector continues to go from strength to strength. I’m looking forward to welcoming the global tech community for this year’s London Tech Week, a great opportunity for us to strengthen partnerships across the world and build a better London for everyone.”

Ranks 140 startup ecosystems

The report ranks the 140 startup ecosystems globally based on seven success factors — talent, market reach, and connectedness. In this, Silicon Valley holds the top spot this year, while Boston and Beijing came in fourth and fifth, respectively. 

A number of other UK hubs are also featured in the reports ‘Top 100 Emerging Ecosystems,’ including Bristol, Manchester-Liverpool, Birmingham, Edinburgh-Glasgow, Belfast, and Durham.

The Global Startup Ecosystem report ranked London highly for access to funding. The UK city’s impressive start to 2022 has been boosted by major funding rounds for some of its fastest-growing tech companies, including a $312M Series G for London fintech, GoCardless; $200M Series D for software payments provider, Paddle; and $100M for online recipe kit firm, Gousto.  

Ranks third in total money raised

Further analysis of the investment data shows that London has so far attracted significantly more venture capital investment in 2022 than any other European city, receiving over double the amount of funding as Paris ($5B) and Berlin ($2.4B). 

The UK capital is also competitive on the global stage, ranking third for total money raised this year behind New York ($15.4B) and Silicon Valley ($44.5B).  

The Startup Genome report also highlighted London’s strengths in high-growth sectors such as Fintech, EdTech, and Climate Tech.

Home to 80 unicorns

Further, the report adds that London has produced more unicorn startups and billion-dollar exits than any other European hub. The UK capital is now home to 80 unicorns, more than the next three European unicorn hubs combined (Berlin, Paris, Stockholm – 78). 

So far this year, London has added six new unicorns to its total in 2022, including Paddle, Forterro, Payhawk, Tripledot Studios, Accelerant, and Learning Technologies Group.

JF Gauthier, Founder, and CEO, of Startup Genome says, “The performance of the London startup ecosystem, climbing from #7 in 2012 to #2 for the last 3 years, demonstrates its strength as a leading international startup hub. It is the community with the highest Global Connectedness after Silicon Valley and the best place in Europe to scale a tech business to global category leadership. We’re delighted to launch the GSER 2022 at London Tech Week because there is no better place to bring together our global startup community.”

Tania Boler, CEO, and Founder of London-based healthtech startup, Elvie says “London is a great place to scale a tech business. Last year we successfully raised £70m which has been vital in enabling our company to grow. In London, you have access to some of the best tech talent and investors. It’s also a very connected ecosystem with lots of networks and support programmes.”   

Russ Shaw CBE, Founder of Tech London Advocates & Global Tech Advocates says, “It’s particularly impressive to see how high London ranks with reference to early-stage investment – I hope that this sends a distinct message to aspiring tech entrepreneurs that the capital is the number one destination to start their business. London is a truly global city, and our digital economy is the beating heart of our recovery after a testing few years. London continues to demonstrate globally that it is a fantastic place to start, grow and scale a tech business as validated by the comprehensive Startup Genome research.”

Karen McCormick, Chief Investment Officer from London-based venture capital firm, Beringea says, “London is home to an abundance of exciting tech companies and is particularly strong in high growth sectors such as fintech, healthtech, and cleantech. This creates lots of opportunities for investors with the potential for high returns.”

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