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Unicorn Update - London Tech Week 2019
The document presents an update on the UK tech landscape as of June 2019, highlighting the UK's strong position as the second-largest hub for unicorns after the US and China, particularly in the fintech sector. It notes a significant increase in venture capital investment, with the UK leading Europe and Israel in terms of unicorn exits and future potential. With a growing pool of experienced talent and favorable startup policies, the UK is positioned as a global leader in responsible technology.
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Unicorn Update - London Tech Week 2019
- 1. London Tech Week UPDATE June2019 Prepared for Tech Nation and the Government’s Digital Economy Council by Dealroom.co
- 2. 2 #3 3rd for Unicornsafter US & China Total number of unicorns by country Current Unicorns Realized Unicorns
- 3. London is 2ndfor FinTech Unicorns after Bay Area 3 Fintech Unicorns by city/area #2
- 4. Facts a yearon, show that UK Tech continues to dominate Europe & Israel 4 Investment Capital Invested Strongest Funds Unicorn Outcomes Past - Exits Present - Unicorns Future - Unicorns
- 5. In 2018, UKventure investment nearly matched Germany, France & Sweden combined (and was more than 2x Israel) 5Source:Dealroom.co. Rounds excluding top 10 mega-rounds.
- 6. 6 $800M $575M $440M $240M $230M$175M $100M $90M $75M $54M Notable investment rounds in 2019 All-time record VC investment in first half of 2019 in UK
- 7. VC rounds ata valuation of $1B+ topped at 13 in 2018 in the UK; as many as Germany, Israel and Sweden combined 7 Source:Dealroom.co. Note: 2019 rounds exclude Glovo, no valuation confirmation * Excludes The Access Group round, undisclosed amount UK Combined $2.3B raised (360% YoY growth 2018 Jan-May: $500M* ) $900M raised (-35% YoY) $230M raised (+15% YoY) $100M raised (+10% YoY) $90M (n/a) $1.5B (+380% YoY) Unicorn rounds in 2019 so far Germany Number of VC rounds at $1 billion+ valuation France Israel Sweden Rest
- 8. Source: Dealroom.co * Dilutionfactor is adjusting for the stage at which each investor typically invests, and is based on the idea that a Seed round is typically valued at around $10M, a series A round at $30M, and a late stage round at $100M. 8 The UK is home to 4 of Europe’s 5 leading unicorn hunter funds
- 9. Plenty of capitalavailable and steadily increasing, as new VC funds raised were at an all-time high in 2018 9 VC funds raised by investor country
- 10. 10 Note: Based on$1B or above Acquisition/Buyout or IPO at $1b or above in market cap. Does not include company branches Acquisitions e.g. TomTomTelematics 2012 2013 2014 2015 2016 2017 2018 2019 May United Kingdom Wood Mackenzie $1.3B Buyout Esure Group $1.8B Worldpay $2.6B Acq. King.com $7.0B IPO, Markit $4.5B IPO, AO.com $2.0B IPO, Just Eat $2.0B IPO, Travelport $1.9B IPO, CSR $2.4B, ACS $1.0B, Zoopla $1.3B IPO, Pokerstars $5B Skrill $1.3B, Sophos $1.6B IPO, Auto Trader UK $3.5B IPO, Worldpay $7.4 IPO, King.com $6.0B Acq, Adaptimmune $1.2B IPO, Wood Mackenzie $2.8B Acq. Skyscanner $1.9B Global Switch $7.5B ARM $31B Host Europe Group $1.9B Alfa $1.3B IPO MATCHESFASHION.COM $1.0B Worldpay $10.4B, Callcredit $1.4B, Farfetch $4.4B IPO, Sky Betting & Gaming $4.7B, Zoopla $3.0B, Orchard Therapeutics $1.2B IPO, FNZ $2.1B Acq, Funding Circle $1.8B IPO, Esure Group $1.4B, Endava $1.1B IPO, GlobalSwitch $2.6B, CRF Health $1.0 B Acq., Autolus $1.0B Acq, Yoox Net- a-porter $5.0B Worldpay $35B Acq Acuris $1.7B Acq Germany Trivago $1.0B Acq. Hybris $1.0B Scout24 Holding $1.6B Buyout Rocket $7.4B IPO Zalando $6.1B IPO TeamViewer $1.0B Scout24 $3.6B IPO Trivago $2.9B IPO Delivery Hero $4.9B IPO HelloFresh $1.9B IPO SUSE $2.5B Acq Dermapharm $1.7B IPO France CRITEO $1.7B IPO Exclusive Group $1.5B eFront $1.3B Acq. Israel Waze $1.1B Mobileye $5.3B IPO Playtika $4.4B Mobileye $15.3B NeuroDerm $1.1B Mazor Robotics $1.3B Acq. Sweden Mojang $2.0B Acq. Bambora $1.7B Acq. Spotify $26.5B IPO iZettle $2.2B Rest of Europe AVG $1.0B IPO VKontakte $3.2B Supercell $3.0B GlobalCollect $1.0B Acq. eDreams $1.5B IPO Avast Software $1.0B Jazztel $5.0B Acq. TeamSystem $1.4B AVITO $2.8B Flow Traders $2.0B IPO Heptagon $1.0B, Sitecore $1.0B, Acerta Pharma $7.0B, Mail.ru Group $1.2B, AVG $1.3B, FleetMatics $2.4B, Allegro $3.3B , Takeaway $1.0B IPO, Hotelbeds Group $1.3B, Actelion $30.0B Acq. Supercell $10.2B Allfunds Bank $2.0B Outfit7 $1.0B Acq. Rovio $1.0B IPO Ablynx $4.3B Prexton therapeutics $1.0B Adyen $7.7B IPO Elastic $5.0B IPO Opera $1.4B IPO Netcompany $1.5B IPO Avast $2.9B IPO Avito $1.2B Acq. Doc Generici $1.2B Luxoft $2.0B Acq. Number of $1B+ Exits UK consistently delivers many more $1B+ exits than Europe & Israel
- 11. 11 Source:Dealroom.co. Includes companiesfounded since 1990 and reached $1B valuation up to May 2019 1.Rumored valuation of $1B, not confirmed through a transaction 2.Exited at Unicorn valuation through IPO, Buyout or Acquisition Cumulative number of Unicorns per country Israel: 2 Rest of Europe: 11 2 1 Germany: 6 France: 5 1 2 Sweden: 1 1 2 2 2 UK: 13 New unicorns since last London Tech Week The UK has created 72 unicorns (34% of total in Europe and Israel) - lead has been increasing in last 5 years
- 12. 12 Note: Based on$1B or above Acquisition/Buyout or IPO at $1b or above market cap. Does not include company branches acquisitions e.g. TomTomTelematics. Rumored Unicorns are Unicorns whose valuation has not been confirmed through a transaction Since 2012, the UK has delivered as many unicorns as Israel, Germany, Netherlands and Sweden combined
- 13. 13Note: Private companies(not acquired or IPO’d), between $250M - $800M in estimated valuation. Full list available in Datacommons Looking ahead, the UK has 30% of Europe and Israel’s future unicorns - more than 2x France, Israel & Germany
- 14. The UK isglobal leader in responsible technology 14 Start Up Policy Enablers ● Industrial Strategy e.g. AI Sector deal & Space Catapult ● Open Data e.g. TfL & Citymapper ● Open Banking ● FCA Sandbox Practical Thought Leadership ● ODI ● Centre for Data Ethics ● Data Commons ● Online Harms white paper ● Alan Turing Institute Public Sector Stimuli ● UKRI ● BBB ● BGF
- 15. Deep pool of experienced unicorntalent Unicorns across Regions Ecosystems across the UK Unicorns across Sectors Jobs across the sector Skills across the regions UK Tech is inclusive and offers opportunities for everyone 15
- 16. UK now hasover 50,000 experienced unicorn talent Realised unicorns: 54 Unrealised unicorns: 18 Future unicorns: 75 16
- 17. Experienced unicorn talentis spread across the UK London: 45 unicorns Manchester: 5 Cambridge: 5 Berlin: 10 Paris: 9 Stockholm: 9 Amsterdam: 6 Oxford: 5 Munich: 6 Dublin: 2 Hamburg: 2 Edinburgh: 3Leeds: 2 Madrid: 3 Barcelona: 2 Copenhagen: 5 Bristol: 2 17
- 18. Aside from London,the UK counts five additional hubs with at least two unicorns, on par with major European tech cities London Oxbridge Berlin Paris Amsterdam Manchester Edinburgh Dublin Leeds Bristol Unicorns created 45 10 10 9 6 5 3 2 2 2 Population 8.2M 290K 3.6M 2.2M 820K 510K 480K 550K 780K 530K Investment per capita $570 $1,160 $660 $1,160 $490 $123 $170 $860 $176 $620 Highest ranked university 8 1 & 2 62 72 59 54 27 117 139 76 Number of accelerators 146 22 42 51 18 10 6 14 10 2 Unicorns: number of companies founded since 1990 that reached $1 billion valuation. Investment per capita based on investment in 2018 and city population. University rank as per Times Higher Education. 18
- 19. Unicorns by sector Source:Dealroom.co. DeepTech/Industrial UK Europe 9 12 Finance UK Europe 21 21 Health UK Europe 9 14 Retail UK Europe 10 8 Rest: 4 Rest: 7 Rest: 4 Germany: 3 Rest: 7 Sweden: 4 France: 3 Israel: 4 Germany: 2 Sweden: 1 France: 2 Israel: 6 Germany: 3 France: 1 Israel: 3 Germany: 3 France: 1 19
- 20. VC-funding from 2013-2018.Source:Dealroom.co. Finance Health Retail Deep Tech/Industrial Steady leadership across different industries 20
- 21. Markets ● Consumers: English+ 300 languages ● Enterprise ● Supportive Government policy ● International Track Record ● Experienced Talent ● Multi-Stage Capital ● Service Providers Massive Talent Pipeline ● Multi-Sector Experience ● Tech Talent ● World Class Universities ● Strong Regional Tech 21 UK has all the ingredients of a global tech power
- 22. 22 UK is hometo a huge pool of tech talent, creating benefits for all Source: Tech Nation 2019; Adzuna, ONS 1 2 3 4 5 6 7 8 9 10 11 UK Cluster Total Digital Economy Jobs (2017) Unicorns Total Digital Economy Job openings (2018) % City Jobs in Digital Tech Median Salary - all Tech roles in Digital Economy (2018) Digital Tech Salary vs City Average Tech Jobs in all companies (2017) Jobs in Digital Tech (2017) Total Non- Tech Jobs in Digital Tech companies (2017) Non-Tech Digital as % of Digital London 574,562 45 915,471 6% £53,296 26.90% 256,082 318,480 62,398 10.86% Manchester 100,520 5 164,043 4% £35,000 2.94% 38,414 9,704 39,154 38.95% Reading 100,507 48,742 33% £40,000 8.11% 25,416 10,258 15,711 15.63% Belfast 60,041 16,853 20% £40,000 17.65% 26,999 24,754 42,101 70.12% Birmingham 59,131 75,401 2% £37,500 7.14% 41,550 17,581 23,969 40.54% Cambridge 52,196 5 85,679 50% £39,000 2.63% 69,837 30,683 21,190 40.60% Bristol 51,753 2 86,247 5% £35,520 4.47% 51,071 8,970 2,245 4.34% Edinburgh 48,118 3 44,879 4% £42,500 14.86% 34,742 12,103 28,710 59.67% Leeds 46,845 2 88,042 6% £35,000 9.38% 36,693 15,503 22,639 48.33% Oxford 37,458 5 72,844 25% £36,000 5.88% 25,637 11,821 13,816 36.88% Newcastle 35,674 29,760 11% £35,000 6.06% 42,398 58,109 15,158 42.49% Sheffield 28,243 26,059 2% £32,500 8.33% 21,508 4,640 15,825 56.03% Cardiff 26,148 24,923 2% £35,000 6.06% 22,034 6,209 16,868 64.51% Notes: 2: Total digital economy jobs include both tech and non tech roles in tech companies, and tech roles outside tech companies, like a software developer at Jaguar Land Rover. 3: $1bn valued tech companies in the given cluster. 4: total number of advertised jobs through Adzuna’s platform, upweighted to be representative of the volume of jobs recorded for tech by the Office for National Statistics 5: % of jobs in city in Digital Tech 6: the middle value for salaries for tech roles both in tech companies, and other companies. 7: the difference between salaries for digital tech jobs and other roles in the cluster, where digital tech is on average 10% better paid. 8: tech roles in all companies, such as a software developer at Monzo, or a data scientist at Jaguar Land Rover. 9: all jobs in digital tech companies, including full stack developers as well as HR professionals, and legal for example. 10: just the non tech roles, such as HR, finance or customer services. 11:The proportion of non digital tech roles within tech companies by cluster
- 23. Tech is open,inclusive and growing across the UK 23 Role Digital job openings (2018) Median Salary Cost of living adjusted – best place to work Median salary (London) Software Developer 130,158 £39,430 Belfast £55,000 Front End Developer 32,431 £35,286 London £50,000 Project Manager 31,721 £47,500 Glasgow £56,000 Consultant 23,879 £55,000 Sheffield £60,000 Devops Engineer 23,690 £50,500 London £67,500 IT System Architect 17,340 £63,857 Cardiff £77,500 Full Stack Developer 16,753 £40,964 Belfast £55,000 Analyst 10,452 £33,929 Edinburgh £45,000 Python Developer 10,100 £43,893 Glasgow £60,000 Data Engineer 6,950 £35,553 London £60,000 Data Scientist 6,287 £45,714 Leeds £60,000 Source: Tech Nation 2019; Adzuna, Numbeo
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- 26. ▪ Investment numbersrefer to venture capital investment rounds such as seed, series A, B, C, …. late stage, and growth equity rounds. It excludes debt or other non-equity funding, lending capital, grants and ICOs ▪ Buyouts, M&A, secondary rounds, and IPOs are treated as exits: excluded from funding data, but included in exit data ▪ A unicorn is defined as an independent private company (i.e. not publicly listed) that has reached a $1 billion valuation, on the basis of a funding round or, retrospectively, on the basis of an acquisition or IPO ▪ There are some notable edge-cases: - Companies that IPO-ed at or above $1 billion but subsequently dipped below that valuation, are still included (examples: Alfa, Rovio, eDreams) - Some companies have at some stage reached a $1 billion but subsequently raised, IPO-ed or were acquired below that value. In this case the company is not counted as a unicorn (examples: Blippar, Home24, Fanduel, Ulmart, Conduit, Wonga, VE Interactive, Powa) - If a unicorn moved HQ, the company is counted in the country where it reached unicorn status. Occasionally companies received dual HQ status (1) ▪ This report focuses on companies that crossed the $1 billion mark in the post-internet age, i.e. after 2000. Most but not all unicorns are VC backed ▪ Companies included in the analysis are tech-driven. Industries include software, ecommerce, online marketplaces, hardware, ICT infrastructure. The full industry & business model taxonomy can be found online via https://datacommons.technation.io ▪ Increasingly, innovative models are scaling offline or via hybrid online-retail models. Examples are beer brand Brewdog which innovated distribution and marketing, by leveraging viral marketing and crowdfunding to build a brand and Metro Bank, a retail-first challenger bank ▪ Dealroom’s proprietary database and software aggregate data from multiple sources including processing of public news-flow, data feeds, web scraping, crowd-sourced contributions (verified by Dealroom) and manual research ▪ Data is verified and curated with an extensive manual process, augmented by data processing ▪ Most underlying data from the report is available online. For more info please visit dealroom.co or contact [email protected] 1. Examples include: Elastic (US/NL), King.com (UK/Sweden), Intercom (USA/Ireland), Sitecore (Denmark/USA), Cybereason (Israel/USA). 26 Methodology & definitions
- 27. 27 Access the underlyingdata on datacommons.technation.io
- 28. 28 77% more Europeandata than the #2 The most trusted source in Europe Dealroom is Europe’s most comprehensive source for data on innovative companies and venture capital investment