According to a study by Dealroom.co and London & Partners, London maintained its position as the top technical venture capital destination in Europe in 2020 and was close to the previous year’s record despite the impact of COVID-19.
Startups and growth companies received funding worth $ 10.5 billion, which is more than a quarter of all investments in Europe and three times the level in Paris, Berlin and Stockholm.
Major deals with London companies included a $ 500 million round of funding for London-based fintech company Revolut, a $ 400 million deal for electric vehicle maker Arrival, and two rounds of funding totaling $ 527 million – Dollars for Octopus Energy, a renewable energy company.
The UK capital also has more unicorns – startups valued at over $ 1 billion – than anywhere else in Europe. According to the study, at 43 there are more than Paris, Berlin and Amsterdam combined.
Dealroom said it identified 81 potential future unicorns headquartered in the city.
Eileen Burbidge, a partner at London-based VC firm Passion Capital, said activity had recovered quickly from the shock of the pandemic in the first half.
“In the second quarter, capital flows and investments were as good as stopped … along the entire value chain,” she said in an interview.
“Towards the end of the third quarter, whether people had adjusted to a new normal or had confidence in the possible outcomes at the time, things started picking up again, and activity in London picked up very quickly.”
The pandemic has underscored the value of fast-growing sectors like fintech – a strength for London – health technology and business such as collaboration tools, she said.
Passion Capital, an early-stage investor in Monzo and GoCardless, has seen a surge to pre-COVID levels or higher, she said.
“Entrepreneurs keep throwing up, I think there is still a lot of investment capital available,” she said.