The tech investment in London and the UK fell by over £600 million ($766 million) between 2017 and 2018, according to new figures released by London & Partners and Pitchbook.
Despite this, London and the UK still raised significantly more than other European cities and countries, with London raising almost double what Berlin raised over the year, and the UK more than £1 billion ahead of closest competitor Germany.
In addition, London's tech companies raised £1.8 billion, or 72%, of the overall investment into the UK, at £2.49 billion. In a good illustration to show how much the figures have dropped year-on-year, the UK as a whole raised less in 2018 than London did -- £2.53 billion -- in 2017.
Worries over Brexit likely affected investment levels, especially from investors based in Europe, who may be worried about Europe's relationship with the European Union over the next few years, as well as the uncertainty over how exactly the UK will leave the EU.
However, investment in companies harnessing the power of AI -- not necessarily "AI companies" -- and cryptocurrency hit record levels, with investment into AI, at £736 million, rising by 48% compared to 2017's figure. Cryptocurrency saw an even larger gain, up from £19.11 million in 2017 to over £200 million in 2018, despite the value of Bitcoin, cryptocurrency's main usage right now, dropping sharply as the year went on. With these technologies seen as the drivers of a whole host of new services and platforms in the next few years, this rise was, for the most part, an expected one -- and it's likely the numbers will rise again 2019.
In Europe, Germany appears to have cemented its place as the primary continental tech hub, with the country raising £350 million more than nearest competitor France, and the capital Berlin raising the majority of that money. After the UK has (probably!) left the European Union in March this means Germany -- and specifically Berlin -- will be the EU's first and foremost tech hub, so this will likely be seen as an even bigger win than usual by Germany tech industry investors and entrepreneurs.
Finally, London and the UK saw more exits than any other European country or city, at 17, with high-profile IPOs for fashion-tech scale-up Farfetch and peer-to-peer lending platform Funding Circle. This is almost double the number of exits for second-placed Sweden, which had ten, who were followed by France on eight and Germany on six.
London's Deputy Mayor for Business, Rajesh Agrawal, said: "These figures demonstrate that London is going from strength to strength as a global hub for technology, innovation and creativity. The fantastic success of our tech sector is rooted in our city's openness and our diverse, international talent pool. Regardless of the outcome of Brexit, London will remain open to innovation, talent and investment from all over the world."
Eileen Burbidge, Partner at Passion Capital added: "London is a hotspot for innovation and recognized as a leading center in Europe for cutting edge technology development. London and the UK are creating world-class companies of scale, especially in high growth areas such as Fintech and Artificial Intelligence. This presents enormous opportunity for international investors, and today's data suggests that London's tech sector has a very bright future."
Phil Oakley, Site Editor, TechX365