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London retains European tech funding crown despite Brexit

London retained its title as the tech funding capital of Europe last year, despite fears that the looming threat of Brexit would stifle investment.

The capital’s startups raised a total £2.45bn in 2017, more than those in Paris, Berlin and Stockholm combined. The UK, meanwhile, raised a record-breaking £2.99bn, nearly double the previous national record of £1.63bn in 2016.

The dramatic spike in investment was driven by a series of mega-deals for a handful of London-based firms, such as Improbable (£391m), Deliveroo (£364m) and Truphone (£255m).

Firms specialising in fintech and AI also attracted major investments. Transferwise led the fintech pack, raising £211m, while Babylon Health raised more funding (£48m) than any other AI firm.

Eileen Burbidge, partner at Passion Capital, said she was not surprised that British startups attracted twice as much VC financing as any other European country.

“It’s a testament to our exceptional entrepreneurs that the UK tech sector continues to produce companies that are leading in the development of cutting edge technologies such as artificial intelligence and fintech,” she said.

“This environment and ecosystem of innovation presents tremendous opportunities for investors and will help to attract global investment into the UK’s digital economy for many years to come,” she added.

Russ Shaw, founder of Tech London Advocates, said that while Berlin and Paris are experiencing impressive growth, the UK remains “in a league of its own”.

But he cautioned against allowing for complacency to develop: “The government must now continue to work on overhauling our immigration system to make it fit for purpose, helping to support a record-setting funding year.”