UK technology ecosystem hits landmark $1 trillion valuation

The UK tech industry is now worth $1 trillion in value, as the country’s tech sector becomes the third in the world to ever reach this landmark valuation. 

The UK’s digital economy is worth more than double that of Germany’s and almost five times larger than France and Sweden, according to data by Dealroom analysed for the UK’s Digital Economy Council.

This rapid rise in value follows sustained investment in the digital tech sector over the past few years.

The Covid-19 pandemic, in particular, triggered a wave of tech adoption from digital health apps, to education platforms, video conferencing and e-commerce.

The products and services that kept us connected at home have become key parts of our daily lives now, helping propel company valuations higher and the UK tech ecosystem into a new league. 

In 2018, the UK tech ecosystem was valued at $446 billion and was steadily growing until 2020 when it doubled in value to $942 billion as investments into software and digital companies surged at the start of the Covid-19 pandemic, both in private and public markets.

This has helped to catapult the valuations of many companies from unicorns - companies valued at $1 billion or more - to the even rarer decacorn status (those worth over $10 billion). 

The UK is now home to 13 decacorns, including Ocado Group and Deliveroo, of which 10 have gone on to IPO, and are the most highly valued tech companies in the country. This is double that of Germany (six) and three times’ Sweden (four). 

This group of companies is on track to get larger over the next few years with 14 UK companies, with valuations of between $5 billion and $10 billion that are expected to join its ranks and achieve decacorn status. 

In the first three months of 2022, UK tech companies have raised over £6 billion with more than half (£3.3 billion) raised by FinTech companies including FNZ, Checkout.com and GoCardless. 

Julia Hawkins, General Partner at LocalGlobe, says: “This is a brilliant milestone for the UK tech industry.”

“Despite the overwhelming challenges of the past few years, UK tech has provided the means to keep us connected and moving forward and helped transform industries across the country, particularly in the healthcare sector.”

“It’s exciting to be a part of this dynamic ecosystem and I look forward to seeing these startups and scaleups grow over the next few years.”  

Rana Yared, Partner at Balderton Capital, comments: “Reaching $1 trillion in value is an important landmark for the UK.”

“There have often been criticisms that you can’t build world leading companies outside of the US, but we’re proving that you don’t need to be based in Silicon Valley to have an impact.”

Retail technologyStaff WriterUK retail, Dealroom, UK’s Digital Economy Council, Retail technology, FinTech, Unicorns, Decacoms, Coronavirus, Ocado Group, Deliveroo, Checkout.comComment