London has the most tech unicorns in Europe, but Brexit may change that

More billion-dollar tech companies call London home than any other European capital – but will leaving the EU frighten them off?
Written by Steve Ranger, Global News Director

London remains home to the largest number of billion-dollar tech companies in Europe, but maintaining that lead after Brexit may be tougher.

According to findings by technology and investment advisory firm GP Bullhound, London has produced 17 companies that surpass the $1bn valuation mark since 2010, more than Berlin (seven) and Paris (four) and Tel Aviv (five) combined.

According to the data, London is currently home to 13 unicorn businesses — about 20 percent of the European total, many of which are in the finance-tech and artificial-intelligence sectors. The UK is now home to 20 out of the 64 unicorns across Europe and over one third of the total if you include companies that have been acquired.

GP Bullhound's data includes tech companies working in areas including artificial intelligence and machine learning, big data, cybersecurity, digital marketing and media, ecommerce, cloud computing, fintech, and health tech, all of which have an equity valuation of $1bn+ in public or private markets.

It also predicts that the UK will be home to 25 percent of the new European billion-dollar companies created over the next few years. Considering that its own figures say that the UK has 30 percent of unicorns now, that would suggest the UK will lose its edge post-Brexit. ZDNet asked London & Partners, who published the research, whether this prediction took into account the various potential Brexit outcomes but the company, which promotes business in the capital, had not responded at the time of publication.

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As well as the data from GP Bullhound, London & Partners also published figures from fDi Markets showing that London has attracted more global tech companies and projects over the past 10 years than any other city, including the likes of Singapore. The data shows 822 companies classified as ICT and electronics businesses setup in London from 2008 to 2018, creating an estimated 27,000 jobs for the city's economy.

Few dispute that the UK, and London in particular, is the major European tech hub. The big question is whether it can hold onto that lead after Brexit, and the initial signs are not good. Tech investment in the UK and London dropped significantly in the past year compared to the year before, but investment in other European rivals grew rapidly.

Almost four out of ten tech companies have said they are considering moving or setting up operations outside of the UK as a result of Brexit. Fin-tech companies in particular have been scrambling to set up operations inside the EU, so that they can benefit from the so-called passporting rules that allow them to sell financial services across the trading bloc. And while London has a big headstart on other European hubs when it comes to software developers, other countries are closing the gap fast, with a number of tech companies complaining it is already harder to attract European staff to the UK.

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