Klarna research: London well placed to tap global boom in digital shopping
London saw record levels of venture capital investment in the digital shopping space during 2021, according to Klarna sponsored research from London & Partners and Dealroom.co.
Global VC investment into digital shopping more than doubled in 2021 following a significant consumer shift to e-commerce platforms amid the Covid pandemic, with a total of $140 billion raised in 2021, up from $68 billion in 2020.
British firms bagged $7 billion in 2021, over double the total amount raised in 2020 ($3 billion).
The UK was the top ranked European country for venture capital investment into digital shopping in 2021, and fourth globally behind China, India and the United States.
London was a driving force behind UK investment growth, with a record $5 billion raised by digital shopping companies based in the capital.
It also ranked fourth on the global stage, behind San Francisco, New York and Bengaluru.
Notable investment rounds into London-based digital shopping companies in 2021 included: £300 million raised by car retailer, Carzoo; $180 million series H funding round for food delivery service, Deliveroo and $40 million secured by dog food delivery service, Butternut Box.
The research also revealed that London is a prime location for digital shopping companies looking to rapidly scale their business, with the UK capital housing more digital shopping unicorns (21) than any other European city and fourth globally behind Beijing (36), New York (39) and San Francisco (51).
Household names in London’s unicorn club include online fashion retailer Asos, online travel leisure retailer, Lastminute.com and fashion marketplace app Depop.
London’s digital shopping sector is showing no signs of slowing in 2022, with the overall enterprise value of London firms increasing from $89 billion in 2020 to $119 billion in just a year. According to Dealroom.co, the number of future digital shopping unicorns in London is set to expand to 24 in 2022.
Laura Citron, CEO at London & Partners, says: “This data shows that London is leading the way on the evolution of retail. London is a brilliant place to grow a digital shopping business – with some of the world’s most digitally savvy customers and record levels of growth capital.”
“It is also home to the next generation of physical retail, with both traditional and digital first brands investing in experiences to delight shoppers. The West End is set for a speedy recovery, with turnover hitting £10 billion within two years.”
Simon Leesley, Managing Director UK, Stitch Fix, a US online styling service, adds: “We chose London as our first international HQ because of the UK's dynamic, fast moving retail market - home to high street icons, some of the most exciting up and coming fashion brands and a wealth of industry leading talent.”
“It's a privilege to play a part in this innovative retail landscape."
“UK consumers are known for being quick to embrace new technology and the level of e-commerce innovation in London and the wider UK clearly reflects that,” comments Alex Marsh, Head of Klarna UK.
