Investment in UK tech firms has more than doubled since the Brexit vote, surging to a record £9bn this year and putting the country far ahead of rivals in Europe.
Data collected by venture capital firm Atomico shows Britain has retained its place at the head of the continent's league table, despite fears over an exodus of start-ups and established technology firms as the country leaves the European Union.
Technology companies have secured $11.1bn (£8.6bn) in venture capital investment so far in 2019, according to a report published this morning, more than the amount invested in runners-up France and Germany combined.
The report reveals Britain still attracts the most venture money in Europe, with investors backing high-risk, high-reward technology firms.
Since the 2016 vote to leave the EU, the amount of funding going into UK technology firms such as challenger bank Monzo or food delivery app Deliveroo has more than doubled from $5.2bn.
Tom Wehmeier, a partner at Atomico, said the findings are a “reflection that the UK is the strongest place for tech in Europe”.
This year's investment in Britain is up 48pc on 2018. Investment into Germany, meanwhile, grew 24pc to $5.8bn while French tech investment grew 41pc to $4.8bn.
While overall investment in the UK has remained strong, the total number of venture deals struck has fallen slightly since 2016.
However, the overall number of deals has risen from 2018. A total of 1,300 venture investments have been made so far, with more likely to be reported before the end of the year.
The increase in total deal value is partly down to a few high-profile investments in Britain’s start-ups, such as a £113m investment in Monzo in June and a $440m investment in OakNorth, the financial technology company, from Japanese company SoftBank.
Edward Knight, a former Goldman Sachs banker who is now a partner at venture investor Antler, said the figures suggest a thriving industry with access to talented staff and a growing number of so-called unicorn firms valued at $1bn or more. Mr Knight said: “Success begets success."
The findings challenge concerns that Brexit could cause long-term damage to Britain’s tech sector. Campaign groups such as Tech For UK, supported by Wikipedia co-founder Jimmy Wales and Last Minute creator Baroness Lane-Fox, have warned that leaving the EU represents a “dire threat to the UK tech industry”.
Mr Wehmeier said that while there has not been a flight of UK businesses to Germany or the Netherlands, start-up founders remain particularly concerned about competition, free movement and visa access for the most talented engineers and developers.
He said there is still a trend of founders “making the choice not to come to the UK in the first place” to start their business, reflecting a broader growth of start-up clusters in cities across Europe.
Eileen Burbidge, a partner at Passion Capital and chair of lobby group Tech UK, said the figures showed a “great validation” of the UK tech sector, but cautioned that political uncertainty over Brexit probably is having some impact on foreign investors.
Britain has seen some high profile losses in the technology space. US electric car maker Tesla last week said it had picked Germany over the UK to build its new “gigafactory” plant due to Brexit concerns.
In total, European technology firms have raised more than $34bn so far this year, an increase of 124pc since Atomico’s first report was launched five years ago.
Last year, US venture capital firms raised a total of $116bn, with the numbers falling slightly, while venture capital investment into Asian firms fell by almost half to $62bn.
Atomico launched its report at the annual Slush conference in Helsinki, a gathering of Europe’s start-ups. The venture firm, based in London, was set up by Skype co-founder Niklas Zennström and remains one of Europe’s most active venture investors.