Bristol is one of the 15 top destinations in the world for venture capital investment in tech businesses, beating cities such as Oslo and Dublin and second only to London in the UK, according to new research.
A report prepared for the Digital Economy Council by Tech Nation and Dealroom.co reveals that Bristol firms received investment worth $500m last year – the same as Zurich and more than Copenhagen, Milan and Helsinki – bolstering its international reputation as an emerging and vibrant tech hub. 
Manchester, Oxford and Edinburgh, the three other UK cities in the table, each had investments totalling $200m.
Bristol leapfrogged Manchester during the second half of the year – a report last summer from Tech Nation tech firms in the northern city had by then raised more than those in Bristol.
The latest report, which takes the pulse of the UK tech sector and benchmarks its growth against global competitors, also reveals that the UK is the ‘unicorn’ capital of Europe – with Bristol again playing its part.
Since 2014, the country has produced more than twice the total number of $1bn-turnover tech companies than any other country in Europe and sits behind only the US and China when it comes to building fast-growing global firms.
One of the eight UK companies reaching unicorn status last year was Bristol-based OVO Energy, meaning the UK has now created 77 billion-dollar businesses, double the total number in Germany (34) and almost four times as many as Israel (20).
Fast-growing OVO earned its unicorn status following its £162m investment OVO by Japanese industrial giant Mitsubishi. The deal, which gave Mitsubishi a 20% stake in OVO, is being used to accelerate the development of the Bristol firm’s intelligent energy technologies unit.
OVO joins Bristol’s other unicorn Graphcore in the prestigious list. The Artificial Intelligence (AI) and machine learning tech company raised $200m from venture capital investors at the end of 218 to make it the city’s first unicorn.
Bristol mid-air touch technology firm Ultraleap – formerly Ultrahaptics – in which Mayfair Equity Partners took a 20% stake last year, is on its way to unicorn status, according to Tech Nation.
The UK’s success in attracting venture capital investment in 2019 was also fuelled, in part, by a surge in the UK’s best performing sectors – fintech, AI and deep tech, and clean energy – according to the report.
Again, when compared with Germany and France, UK fintech firms raised £4.1bn last year – an impressive 7.5 times the amount raised by French fintechs, and three times as much as fintech firms in Germany.
The report’s highlights include:
- Investment in UK digital tech reached a record high of £10.1bn ($13.2bn) in 2019, up £3.1bn ($4.1bn) from 2018, securing 33% of all European tech investment
- Venture capital investment leapt by 44% year-on-year – growth that outstrips US, China, Germany and France
- The UK produced twice as many unicorns as Germany and three times as many as France
- Number of early-stage investments grew by 20%, with £3.9bn ($5.1bn) going to UK start-ups
- At the higher end of the scale, £4.1bn ($5.4bn) was invested in rounds exceeding $100m in 2019 – more than twice the amount invested in such rounds during the same period last year
- Fintech, AI and deep tech and clean energy were the UK’s best performing sectors.
Top of the investment league was the Bay Area of California with $43.5bn. Beijing was second and London third.
The number of rapidly growing UK tech companies soared as venture capital investment increased by 44%. Growth in VC investment exceeded 40% for the third year in a row. To put this growth into perspective, investments in France grew by a little over a third compared to 2018, while Israel’s investments rose by a fifth.
Almost half of the UK investments (£4.6bn) in 2019 came via US and Asian investors.
In what was another record-breaking year, investments in the UK tech sector soared to £10.1bn ($13.2bn) in 2019, according to latest industry figures – a £3.1bn increase on 2018’s very strong figures and the highest level in UK history.
2019 saw the number of early-stage investment rounds grow by 20% year-on-year. While among more mature companies, a total of £4.1bn was invested in rounds exceeding $100m in 2019 – more than twice the amount invested in such rounds during the same period last year.
Of the highest-value UK rounds, five companies raised more than $250m each, and three of those exceeded $500m in a single round.
Digital Secretary Nicky Morgan said: “These brilliant new numbers demonstrate the strength of the UK tech industry and how it is a sweet spot of our economy.
“Our tech companies are not only commanding the confidence of global investors, but they are also creating new jobs and wealth across the country.
“It’s absolutely vital we maintain this impressive success and in Government we are working tirelessly to make sure the conditions are right.”
