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UK Tech overview �UPDATE

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Oliver Christian, Business Relations, No.10

23 July 2019

Prepared for Tech Nation and the Government’s Digital Economy Council by Dealroom.co

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3rd for Unicorns after US & China

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#3

Total number of unicorns by country

Current Unicorns

Realized Unicorns

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London is 2nd for FinTech Unicorns after Bay Area

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Fintech Unicorns by city/area

#2

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Facts a year on, show that UK Tech continues to dominate Europe & Israel

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Investment

Capital Invested

Strongest Funds

Unicorn Outcomes

Past - Exits

Present - Unicorns

Future - Unicorns

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In 2018, UK venture investment nearly matched Germany, France & Sweden combined (and was more than 2x Israel)

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Source:Dealroom.co. Rounds excluding top 10 mega-rounds.

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All-time record VC investment in first half of 2019 in UK

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$800M

$575M

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�$440M

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$240M

$230M

$175M

$100M

$90M

$75M

$54M

Notable investment rounds in 2019

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VC rounds at a valuation of $1B+ topped at 13 in 2018 in the UK; as many as Germany, Israel and Sweden combined

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Source:Dealroom.co. Note: 2019 rounds exclude Glovo, no valuation confirmation

* Excludes The Access Group round, undisclosed amount

UK

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Combined $2.3B raised

(360% YoY growth

2018 Jan-May: $500M* )

$900M raised

(-35% YoY)

$230M raised

(+15% YoY)

$100M raised

(+10% YoY)

$90M

(n/a)

$1.5B

(+380% YoY)

Unicorn rounds in 2019 so far

Germany

Number of VC rounds at $1 billion+ valuation

France

Israel

Sweden

Rest

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The UK is home to 4 of Europe’s 5 leading unicorn hunter funds

Source: Dealroom.co

* Dilution factor is adjusting for the stage at which each investor typically invests, and is based on the idea that a Seed round is typically valued at around $10M, a series A round at $30M, and a late stage round at $100M.

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Plenty of capital available and steadily increasing, as new VC funds raised were at an all-time high in 2018

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VC funds raised by investor country

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UK consistently delivers many more $1B+ exits than Europe & Israel

Note: Based on $1B or above Acquisition/Buyout or IPO at $1b or above in market cap. Does not include company branches Acquisitions e.g. TomTomTelematics

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2012

2013

2014

2015

2016

2017

2018

2019 May

United Kingdom

Wood Mackenzie $1.3B Buyout

Esure Group $1.8B

Worldpay $2.6B Acq.

King.com $7.0B IPO, Markit $4.5B IPO, AO.com $2.0B IPO, Just Eat $2.0B IPO, Travelport $1.9B IPO, CSR $2.4B, ACS $1.0B, Zoopla $1.3B IPO, Pokerstars $5B

Skrill $1.3B, Sophos $1.6B IPO, Auto Trader UK $3.5B IPO, Worldpay $7.4 IPO, King.com $6.0B Acq, Adaptimmune $1.2B IPO, Wood Mackenzie $2.8B Acq.

Skyscanner $1.9B

Global Switch $7.5B

ARM $31B

Host Europe Group $1.9B

Alfa $1.3B IPO

MATCHESFASHION.COM $1.0B

Worldpay $10.4B, Callcredit $1.4B, Farfetch $4.4B IPO, Sky Betting & Gaming $4.7B, Zoopla $3.0B, Orchard Therapeutics $1.2B IPO, FNZ $2.1B Acq, Funding Circle $1.8B IPO, Esure Group $1.4B, Endava $1.1B IPO, GlobalSwitch $2.6B, CRF Health $1.0 B Acq., Autolus $1.0B Acq, Yoox Net-a-porter $5.0B

Worldpay $35B Acq

Acuris $1.7B Acq

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Germany

Trivago $1.0B Acq.

Hybris $1.0B

Scout24 Holding $1.6B Buyout

Rocket $7.4B IPO

Zalando $6.1B IPO

TeamViewer $1.0B

Scout24 $3.6B IPO

Trivago $2.9B IPO

Delivery Hero $4.9B IPO

HelloFresh $1.9B IPO

SUSE $2.5B Acq

Dermapharm $1.7B IPO

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France

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CRITEO $1.7B IPO

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Exclusive Group $1.5B

eFront $1.3B Acq.

Israel

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Waze $1.1B

Mobileye $5.3B IPO

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Playtika $4.4B

Mobileye $15.3B

NeuroDerm $1.1B

Mazor Robotics $1.3B Acq.

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Sweden

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Mojang $2.0B Acq.

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Bambora $1.7B Acq.

Spotify $26.5B IPO

iZettle $2.2B

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Rest of Europe

AVG $1.0B IPO

VKontakte $3.2B

Supercell $3.0B

GlobalCollect $1.0B Acq.

eDreams $1.5B IPO

Avast Software $1.0B

Jazztel $5.0B Acq.

TeamSystem $1.4B

AVITO $2.8B

Flow Traders $2.0B IPO

Heptagon $1.0B, Sitecore $1.0B, Acerta Pharma $7.0B, Mail.ru Group $1.2B, AVG $1.3B, FleetMatics $2.4B, Allegro $3.3B , Takeaway $1.0B IPO, Hotelbeds Group $1.3B, Actelion $30.0B Acq.

Supercell $10.2B

Allfunds Bank $2.0B

Outfit7 $1.0B Acq.

Rovio $1.0B IPO

Ablynx $4.3B

Prexton therapeutics $1.0B

Adyen $7.7B IPO

Elastic $5.0B IPO

Opera $1.4B IPO

Netcompany $1.5B IPO

Avast $2.9B IPO

Avito $1.2B Acq.

Doc Generici $1.2B

Luxoft $2.0B Acq.

Number of �$1B+ Exits

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The UK has created 72 unicorns (34% of total in Europe and Israel) - lead has been increasing in last 5 years

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Source:Dealroom.co. Includes companies founded since 1990 and reached $1B valuation up to May 2019

1.Rumored valuation of $1B, not confirmed through a transaction

2.Exited at Unicorn valuation through IPO, Buyout or Acquisition

Cumulative number of Unicorns per country

Israel: 2

Rest of Europe: 11

2

1

Germany: 6

France: 5

1

2

Sweden: 1

1

2

2

2

UK: 13

New unicorns since last London Tech Week

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Since 2012, the UK has delivered as many unicorns as Israel, Germany, Netherlands and Sweden combined

Note: Based on $1B or above Acquisition/Buyout or IPO at $1b or above market cap. Does not include company branches acquisitions e.g. TomTomTelematics. Rumored Unicorns are Unicorns whose valuation has not been confirmed through a transaction

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Looking ahead, the UK has 30% of Europe and Israel’s future unicorns - more than 2x France, Israel & Germany

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Note: Private companies (not acquired or IPO’d), between $250M - $800M in estimated valuation. Full list available in Datacommons

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The UK is global leader in responsible technology

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Start Up Policy Enablers

  • Industrial Strategy �e.g. AI Sector deal & Space Catapult
  • Open Data �e.g. TfL & Citymapper
  • Open Banking
  • FCA Sandbox

Practical Thought Leadership

  • ODI
  • Centre for Data Ethics
  • Data Commons
  • Online Harms white paper
  • Alan Turing Institute

Public Sector Stimuli

  • UKRI
  • BBB
  • BGF

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UK Tech is inclusive and offers opportunities for everyone

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Deep pool �of experienced unicorn talent

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Unicorns across Regions

Ecosystems across the UK

Unicorns across Sectors

Jobs �across the sector

Skills �across the regions

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UK now has over 50,000 experienced unicorn talent

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Realised unicorns: 54

Unrealised unicorns: 18

Future unicorns: 75

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Experienced unicorn talent is spread across the UK

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London: 45 unicorns

Manchester: 5

Cambridge: 5

Berlin: 10

Paris: 9

Stockholm: 9

Amsterdam: 6

Oxford: 5

Munich: 6

Dublin: 2

Hamburg: 2

Edinburgh: 3

Leeds: 2

Madrid: 3

Barcelona: 2

Copenhagen: 5

Bristol: 2

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Aside from London, the UK counts five additional hubs with at least two unicorns, on par with major European tech cities

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London

Oxbridge

Berlin

Paris

Amsterdam

Manchester

Edinburgh

Dublin

Leeds

Bristol

Unicorns created

45

10

10

9

6

5

3

2

2

2

Population

8.2M

290K

3.6M

2.2M

820K

510K

480K

550K

780K

530K

Investment per capita

$570

$1,160

$660

$1,160

$490

$123

$170

$860

$176

$620

Highest ranked university

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62

72

59

54

27

117

139

76

Number of accelerators

146

22

42

51

18

10

6

14

10

2

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Unicorns: number of companies founded since 1990 that reached $1 billion valuation.

Investment per capita based on investment in 2018 and city population.

University rank as per Times Higher Education.

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Unicorns by sector

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Source:Dealroom.co.

Deep Tech/Industrial

UK

Europe

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9

12

Finance

UK

Europe

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21

21

Health

UK

Europe

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9

14

Retail

UK

Europe

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10

8

Rest: 4

Rest: 7

Rest: 4

Germany: 3

Rest: 7

Sweden: 4

France: 3

Israel: 4

Germany: 2

Sweden: 1

France: 2

Israel: 6

Germany: 3

France: 1

Israel: 3

Germany: 3

France: 1

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Steady leadership across different industries

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VC-funding from 2013-2018. Source:Dealroom.co.

Finance

Health

Retail

Deep Tech/Industrial

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UK has all the ingredients of a global tech power

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Markets

  • Consumers: English + 300 languages
  • Enterprise
  • Supportive Government policy
  • International

Track Record

  • Experienced Talent
  • Multi-Stage Capital
  • Service Providers

Massive Talent Pipeline

  • Multi-Sector Experience
  • Tech Talent
  • World Class Universities
  • Strong Regional Tech

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UK is home to a huge pool of tech talent, creating benefits for all

Source: Tech Nation 2019; Adzuna, ONS

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5

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9

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UK Cluster

Total Digital Economy Jobs (2017)

Unicorns

% Digital Economy jobs

Total Digital Economy Job openings (2018)

% City Jobs in Digital Tech

Median Salary - all Tech roles in Digital Economy (2018)

Digital Tech Salary vs City Average

Tech Jobs in all companies (2017)

Jobs in Digital Tech (2017)

Total Non-Tech Jobs in Digital Tech companies (2017)

Non-Tech Digital as % of Digital

London

574,562

45

27.36%

915,471

6%

£53,296

26.90%

256,082

318,480

62,398

10.86%

Manchester

100,520

5

4.79%

164,043

4%

£35,000

2.94%

38,414

9,704

39,154

38.95%

Reading

100,507

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4.79%

48,742

33%

£40,000

8.11%

25,416

10,258

15,711

15.63%

Belfast

60,041

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2.86%

16,853

20%

£40,000

17.65%

26,999

24,754

42,101

70.12%

Birmingham

59,131

1

2.82%

75,401

2%

£37,500

7.14%

41,550

17,581

23,969

40.54%

Cambridge

52,196

5

2.49%

85,679

50%

£39,000

2.63%

69,837

30,683

21,190

40.60%

Bristol

51,753

2

2.46%

86,247

5%

£35,520

4.47%

51,071

8,970

2,245

4.34%

Edinburgh

48,118

3

2.29%

44,879

4%

£42,500

14.86%

34,742

12,103

28,710

59.67%

Leeds

46,845

2

2.23%

88,042

6%

£35,000

9.38%

36,693

15,503

22,639

48.33%

Oxford

37,458

5

1.78%

72,844

25%

£36,000

5.88%

25,637

11,821

13,816

36.88%

Newcastle

35,674

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1.70%

29,760

11%

£35,000

6.06%

42,398

58,109

15,158

42.49%

Sheffield

28,243

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1.34%

26,059

2%

£32,500

8.33%

21,508

4,640

15,825

56.03%

Cardiff

26,148

1

1.25%

24,923

2%

£35,000

6.06%

22,034

6,209

16,868

64.51%

Notes: 2: Total digital economy jobs include both tech and non tech roles in tech companies, and tech roles outside tech companies, like a software developer at Jaguar Land Rover. 3: $1bn valued tech companies in the given cluster. 4: proportion of digital tech jobs that this city comprises of the UK total 5: total number of advertised jobs through Adzuna’s platform, upweighted to be representative of the volume of jobs recorded for tech by the Office for National Statistics 6: % of jobs in city in Digital Tech 7: the middle value for salaries for tech roles both in tech companies, and other companies. 8: the difference between salaries for digital tech jobs and other roles in the cluster, where digital tech is on average 10% better paid. 9: tech roles in all companies, such as a software developer at Monzo, or a data scientist at Jaguar Land Rover. 10: all jobs in digital tech companies, including full stack developers as well as HR professionals, and legal for example. 11: just the non tech roles, such as HR, finance or customer services. 12:The proportion of non digital tech roles within tech companies by cluster

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Tech is open, inclusive and growing across the UK

Source: Tech Nation 2019; Adzuna, Numbeo

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Role

Digital �job openings �(2018)

Median Salary

Cost of living �adjusted – �best place to work

Median salary �(London)

Software Developer

130,158

£39,430

Belfast

£55,000

Front End Developer

32,431

£35,286

London

£50,000

Project Manager

31,721

£47,500

Glasgow

£56,000

Consultant

23,879

£55,000

Sheffield

£60,000

Devops Engineer

23,690

£50,500

London

£67,500

IT System Architect

17,340

£63,857

Cardiff

£77,500

Full Stack Developer

16,753

£40,964

Belfast

£55,000

Analyst

10,452

£33,929

Edinburgh

£45,000

Python Developer

10,100

£43,893

Glasgow

£60,000

Data Engineer

6,950

£35,553

London

£60,000

Data Scientist

6,287

£45,714

Leeds

£60,000

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Methodology & definitions

1. Examples include: Elastic (US/NL), King.com (UK/Sweden), Intercom (USA/Ireland), Sitecore (Denmark/USA), Cybereason (Israel/USA).

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  • Investment numbers refer to venture capital investment rounds such as seed, series A, B, C, …. late stage, and growth equity rounds. It excludes debt or other non-equity funding, lending capital, grants and ICOs
  • Buyouts, M&A, secondary rounds, and IPOs are treated as exits: excluded from funding data, but included in exit data

​

  • A unicorn is defined as an independent private company (i.e. not publicly listed) that has reached a $1 billion valuation, on the basis of a funding round or, retrospectively, on the basis of an acquisition or IPO
  • There are some notable edge-cases:

- Companies that IPO-ed at or above $1 billion but subsequently dipped below that valuation, are still included (examples: Alfa, Rovio, eDreams)

- Some companies have at some stage reached a $1 billion but subsequently raised, IPO-ed or were acquired below that value. In this case the company is not counted as a unicorn (examples: Blippar, Home24, Fanduel, Ulmart, Conduit, Wonga, VE Interactive, Powa)

- If a unicorn moved HQ, the company is counted in the country where it reached unicorn status. Occasionally companies received dual HQ status (1)

​

  • This report focuses on companies that crossed the $1 billion mark in the post-internet age, i.e. after 2000. Most but not all unicorns are VC backed
  • Companies included in the analysis are tech-driven. Industries include software, ecommerce, online marketplaces, hardware, ICT infrastructure. The full industry & business model taxonomy can be found online via https://datacommons.technation.io
  • Increasingly, innovative models are scaling offline or via hybrid online-retail models. Examples are beer brand Brewdog which innovated distribution and marketing, by leveraging viral marketing and crowdfunding to build a brand and Metro Bank, a retail-first challenger bank

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  • Dealroom’s proprietary database and software aggregate data from multiple sources including processing of public news-flow, data feeds, web scraping, crowd-sourced contributions (verified by Dealroom) and manual research
  • Data is verified and curated with an extensive manual process, augmented by data processing
  • Most underlying data from the report is available online. For more info please visit dealroom.co or contact support@dealroom.co

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Access the underlying data on datacommons.technation.io

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Dealroom is Europe’s most comprehensive source for data on innovative companies and venture capital investment

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