The UK has been ranked first in Europe for tech investment, with over £186 billion in funding poured into the sector between 2000 and 2023. This investment surpasses the combined total of France, Germany, and Spain, highlighting the UK’s position as a dominant force in the European tech landscape.
The European Patent Office (EPO) unveiled its new report today, which details the state of tech investment across Europe and shines a light on key investors who are driving the sector’s growth. The UK leads in both total funding and the number of transactions, with 42,576 deals over the 23-year period, significantly outstripping other nations. France, Germany, and Spain together accounted for 44,752 transactions and £175 billion in funding.
The EPO’s report introduces a new metric, the Technology Investor Score (TIS), designed to measure the extent to which investors support companies that hold patents. According to the study, 88% of European investors have portfolios that include companies with patents, while 8% focus heavily on patent-backed startups, with over half of their portfolio companies holding patents.
Innovate UK Dominates as Leading Investor
Innovate UK stands out as the UK’s leading investor in tech, having contributed to 5,781 transactions between 2000 and 2023. The agency boasts a TIS of 0.337, making it a key player in the UK’s tech funding landscape. Following Innovate UK are Tech Nation and Crowdcube, which together have facilitated 8,326 investment transactions in the same period. These organisations are central to the growth and innovation of the UK’s tech sector, providing critical funding and support to tech startups across the nation.
The National Health Service (NHS) also plays a significant role in public sector tech investment, holding the highest TIS among public investors. Other key government players include The Defence and Security Accelerator, the Department for Business and Trade, and the Department for Business. Academic institutions, such as Oxford University, are also prominent tech investors, further reinforcing the UK’s leadership in this area.
A Gap in Europe’s Tech Investment Landscape
While the UK excels, the report highlights a broader funding gap across Europe, particularly when compared to the United States. In Europe, public programmes dominate early-stage tech investment, but private funding remains limited at the later stages of development. This leaves many promising startups struggling to scale, with only 22% of European private investors focusing on late-stage funding.
In contrast, the US has a much stronger private sector involvement, with 98 of the top 100 most central investors in the US being private entities, many of which specialise in scaling late-stage companies. The lack of late-stage private investment in Europe poses a significant challenge to the growth of high-tech companies, prompting many entrepreneurs to seek funding opportunities outside of Europe.
Supporting Startups with Better Access to Investors
To address these challenges, the EPO has updated its Deep Tech Finder, a tool designed to help startups find suitable investors based on specific criteria like country, technology field, and stage of development. The updated filter will enable startups to access a wider range of potential investors, further supporting the growth of Europe’s innovation-driven economy.
The EPO’s report calls for a more balanced investment landscape in Europe, where public and private sector funding work hand in hand to ensure that startups can scale successfully and bring their innovations to market.
