The UK tech industry is now valued at $1tn (£764bn), a landmark milestone that has previously only been reached by the US and China.

  • UK tech industry is now worth more than double that of Germany’s and almost 5x larger than France and Sweden. 
  • UK digital sector on track to add £190 billion in value to the UK economy and create nearly 700,000 jobs over the next three years.

The figures, which combine the valuations of the UK’s public and private technology companies, puts the value of the UK tech industry at more than double that of Germany and almost five times larger than France and Sweden.

That’s according to data from Dealroom analysed for the UK’s Digital Economy Council.

In 2018, the UK tech ecosystem was valued at $446 billion. But a growth surge between 2020 and 2021 – accelerated by rapid digital transformation during the pandemic – helped propel the UK tech ecosystem by 42% towards the $1 trillion milestone.

Record levels of venture capital investments have helped increase the valuations of UK tech companies, with the report showing the country is now home to 13 decacorns – companies valued at $10bn or more.

Among them are fintech company Revolut, data centre firm Global Switch and semiconductor company Arm, which is currently preparing for a likely US IPO following its abandoned merger with Nvidia.

Eight of the UK’s 13 decacorns are fintech companies, a sector that dominates the UK tech landscape and that brought in a record £8.56 billion in funding last year.

The majority of the UK’s unicorns are located in London, but 44 of them are now located outside of the capital.

Digital Minister Chris Philp said:

“Our tech industry has gone from strength to strength, overtaking the rest of Europe and entering the history books as the third country ever to reach this milestone.

“We’re working hard to make the UK the best place in the world to found, grow or float tech businesses – whether they’re early-stage startups or global innovators – ensuring they have the best talent, investment and regulation to thrive.

“Every corner of the country has contributed to the sector’s success including the West Midlands, whose digital ecosystem is set to keep growing by at least £2.7 billion by 2025 and create 52,000 additional jobs.”

Gerard Grech, chief executive at Tech Nation, commented:

“This is a watershed moment for UK tech. The industry has gone through difficult global challenges and come out stronger than ever.

“Ten years ago people said there weren’t enough startups in the UK. Five years ago people said there weren’t enough scale-ups. Every day, innovative and experimental tech companies are being launched across the UK that will grow into the next generation of unicorns and decacorns, and we at Tech Nation are committed to supporting and fuelling these high-potential businesses across the whole country.”

Yoram Wijngaarde, founder and CEO at Dealroom, added:

“The explosion in VC investment started by the pandemic amid the overwhelming demand for digital services for healthcare, education and food delivery has helped spur on this growth but the foundations were laid long before 2020.

“As companies and investors grapple with the global challenges of 2022, from the Russia-Ukraine war to the ongoing supply chain crisis and the cost of living rises, it’ll be interesting to see how tech ecosystems like the UK’s adapt and adjust.”

The report also found that there are 14 unicorns valued between $5bn and $10bn, suggesting there will be more decacorns arriving on the scene in the coming years.

The latest figures cement the UK’s position as one of the world’s leading tech hubs. It was revealed earlier this year that UK tech companies made up 38% of the combined valuation of European unicorns in 2021 – the highest percentage across the continent.

In the first three months of 2022, UK tech companies have already raised over £6 billion, with more than half (£3.3 billion) raised by fintech companies.

Last year, UK tech companies raised a record £29.4 billion.

Government research published last year found that the UK digital sector is on track to add £190 billion in value to the UK economy and create nearly 700,000 jobs over the next three years.

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