Flying in the face of Brexit uncertainty and despite many companies looking outside of London to set-up shop, the English capital remains the most investable place for tech firms in Europe. During 2017 more tech funding was ploughed into London than any other city on the continent.
During the past 12 months London attracted £2.45 billion in venture capital funding, claiming about 80 per cent of the £2.99 billion invested in Britain as a whole, according to data compiled by PitchBook. In fact London claimed more investment than Paris, Berlin and the next seven most-invested cities combined. Artificial intelligence was a particularly big area of growth, with UK-based AI firms doubling the amount raised during 2016 by raising £488 million throughout 2017.
Eileen Burbidge, partner at Passion Capital, said it was no surprise to see London – and Britain – leading the pack because it has both the talent and investor capital needed. "It’s a testament to our exceptional entrepreneurs that the UK tech sector continues to produce companies that are leading in the development of cutting edge technologies such as artificial intelligence and fintech," she said.
In October, it was revealed that London’s technology centre was the world’s most expensive tech hub to be located in. This led many to predict an exodus from the capital, with a number of tech hubs already emerging outside of London, such as the south of Wales and Cambridge.
According to Knight Frank London’s Silicon Roundabout is in fact the most expensive tech hub across the globe, with rent reaching the dizzying heights of £70 per square foot. That is some £11 per square foot more than it is to rent in San Francisco’s Mid-Market areas and Dublin’s Docklands area which is home to Google, Facebook and Twitter.
Meanwhile renting an office by the Shoreditch roundabout is almost twice as expensive as it is in New York’s Brooklyn tech hub. In fact, locating a business in east London is now almost as expensive as renting office space in the Square Mile, the capital’s main financial district.
At the other end of the scale, Berlin’s Potzdamer Platz office rents are just £31 per square foot, while the city centre in Amsterdam, which is home to the city’s burgeoning tech sector, offers office space at £26.50 per square foot.
But perhaps the sky-high rent prices are not such a bad thing. James Nicholson, partner at Knight Frank, said that the high rents represent the demand to be positioned in London’s tech centre. “Whilst Shoreditch is just one submarket favoured by tech and creative firms, this submarket is the poster child for the growth of London’s tech driven evolution – the high rents reflect how greatly tech and creative firms value having an office in the capital,” he said.