The UK houses 13 of 34 tech unicorns in Europe – private companies valued $1 billion (£745 million) or more. These institutions are referred to as ‘unicorns’ because they rarely emerge into the “ground-breaking” establishments they become.
The combined value of the unicorns in Europe is $62 billion, of which the UK-based companies make up $23 billion (£17.1 billion).
Some of the unicorns housed in the UK include Deliveroo, a start-up founded in 2013 by Will Shu and Greg Orlowski, which works with more than 10,000 restaurants across the UK to deliver food to customers in their homes; BenevolentAI, a research facility in Cambridge which uses artificial intelligence (AI) to tackle diseases by developing new medicines; OakNorth Bank, a challenger bank surfacing after the 2008 financial crisis aimed at business banking; and others including Just Eat, Zoopla, Darktrace and Blippar.
So what is making these companies so successful?
The current low-interest environment in the UK has benefitted these companies immensely through the provision of accessible debt markets alongside a flourishing venture capital sector. In effect, these advantages have enabled these new tech leaders to expand internationally under private ownership.
The UK is the digital dynamo of Europe … [it is] the best place in the world to start and grow a tech business
Seven out of Europe’s 10 venture capital funds are investing in the country’s growing start-ups, with the UK gaining £5 billion post-Brexit, three times more than any other European country. As an effect, investments into artificial intelligence – representing 10% of all tech raises in the city – grew by 50%.
Matt Hancock, Secretary of State for the Department of Culture, Media, and Sport said: “These new figures show the UK is the digital dynamo of Europe and we are achieving our goal to be the best place in the world to start and grow a tech business.”
He also added the government is making provisions for both public and private initiatives worth up to £14 billion. This includes £6 billion for research and innovation, and the provision of £2.5 billion to the Business and Growth Fund to aid early-stage start-ups.
There are 2.1 million people working in the digital tech economy, of which 21.5% are international movers coming to the UK
Wendy Tan White, board trustee of the Alan Turing Institute, and board member of Tech Nation, said: “As an entrepreneur and an investor I see that momentum in the UK technology sector is building relentlessly, helped by a world-class research and academic environment. Ambitious entrepreneurs no longer have to leave this island and head to the US to build the company of their dreams.”
But why are these tech unicorns so attractive to millennial graduates?
Research from Tech Nation shows that a digital tech job is created every 50 minutes, with the average salary for the job that requires digital tech skills being 25% higher than the salary for positions that do not.
Currently, there are 2.1 million people working in the digital tech economy, of which 21.5% are international movers coming to the UK, developing a potential juggernaut in the tech industry.
Whilst the progression of tech unicorns seems unstoppable, Tech London Advocates’ Russ Shaw has warned that the UK cannot get complacent, especially when the terms of Brexit are unknown.
Speaking to City A.M, he said: “London has a great reputation globally, but there’s a lot of momentum and dynamism everywhere […] We still have to focus on talent as the number one issue, due to the sector’s lack of diversity and homegrown talent, coupled with the challenges we face bringing in talent from overseas.”
So whilst you’re churning out graduate and internships applications this summer to the UK’s top commercial and investment banks, you may want to spare a thought for the tech unicorns, as they present more opportunities than you may think.