UK tech investment stagnates, ending period of hyper-growth
Investment in technology companies has stagnated in the UK, marking the end of a period of rapid expansion.
This is according to new research from Stripe and Tech.eu, which found that investment in growth-stage UK technology companies contracted by 3 per cent during 2018 - a dramatic reversal of fortunes following a 76 per cent expansion between 2016 and 2017.
While the UK remains the leader in these investments, attracting €8.82 billion during the period, France and Germany are gaining fast. Growth-stage tech investment in the countries grew by 27 per cent and 26 per cent respectively, to reach €5.44 billion and €4.85 billion.
The report will ring alarm bells for disciples of the London tech boom, which is now widely considered to be one of the UK's key economic strengths.
The growth of the capital's financial services startups such as Monzo, along with major deals such as the acquisition of payment processor WorldPay, have been dubbed London's 'fintech miracle'.
Today's report suggests that companies in fintech, along with medtech, remain the most attractive prospects for investors. Across Europe as a whole, over the last three years growth-stage companies in these sectors received €5.38 billion and €4.22 billion in investment respectively.
And, despite the UK's worsening position, investment throughout Europe in growth-stage firms across all technologies has nearly doubled since 2016, rising from €6.88 billion to €11.66 billion in 2018 - but 70 per cent of total investment is accounted for by British, German, French, and Swedish companies.
Commenting on the report, Stripe's head of continental Europe Guillaume Princen said: "The European startup ecosystem is on the right track to create technology giants in the years to come. Seed investment is strong and growth investment is getting stronger, year after year.
"But while the UK, France, Germany, and Sweden are frequently seeing the birth of globally competitive tech companies, the [other] European hubs lag behind."