To walk around Primrose Hill every day is to be animated, every single time, by the same childlike wonder. To go on a walk through the Victorian terraces and pastel-coloured Regency townhouses is to walk down a dream, to wander and sometimes stop by the quaint cafes and bakeries spread around this idea, is to dive into an in ideal representation of London, a place stuck in time where happiness thrives.
But it is only by wandering its streets during a clement summer evening and deciding to climb the hill overhanging the main park, that one can realise the greatness of London. There stands a silent concert of monuments and skyscrapers, like dancing a slow waltz, creating the harmony and uniqueness of the city. Far away, the bustling city fills the viewer with serenity and curiosity.
Curiosity indeed, for one can't help but notice the ballet of cranes above the city. Like the handles of a puppeteer, these cranes expanding and growing this city are the best sign of a wealthy economy.
This only shows that despite the challenges and turmoil of the past few years, London has been able to bounce back, stronger than ever before, as shown by the new data from London & Partners and Dealroom.
European Figurehead
The data shows that London startups collectively raised over £10.14B in VC investment in 2023, marking a return to pre-pandemic levels of investment following a global pullback in VC after a spike in 2021 and 2022, with the Climate Tech sector showing a clear lead.
London continues to lead as Europe’s number one tech hub with London’s startups having raised almost as much investment in 2023 as the next three European cities combined; Paris, Stockholm, and Berlin.
London ranks as the fourth city by VC raised, after the Bay Area, New York, and Boston. The report also shows that the UK remains the third country globally by venture capital raised in 2023, after the US and China.
Unicorns and High-performance sectors for Climate Tech and AI
Among London’s most promising tech sectors, Climate Tech is blazing a trail having raised £2.75B in 2023, up from £1.73B in 2022. London is also number two globally for climate tech investment behind Stockholm. The top London climate tech startups that have raised the biggest rounds in 2023 included electric vehicle battery company Zenobe Energy (£870M), Octopus Electric Vehicles (£150M), and modular housing company TopHat (£70M).
In addition, in 2023, climate tech made up 23% of Foreign Direct Investment (FDI) into London. This includes the world's largest electric vehicle maker, BYD, which selected London as its UK headquarters, as well as award-winning Cloverly from Atlanta, renowned for its climate action tech, as well as Allume Energy from Australia, specialists in providing shared solar solutions to flats.
Investment in Generative AI companies in London has also exploded in the last two years. In 2023, London-based GenAI startups raised £182.43M in 2023, which is 20x the total of 2020.
Companies include Synthesia, a Gen AI video company which also achieved unicorn status with a £786.3M (USD $1B) valuation. 2023 was a strong year for unicorns, with three additional startups achieving valuations over $1B, including Quantexa in Decision Intelligence, Reward Gateway offering HR tools, and Zyber 365 in Web3 Cybersecurity.
Venture capital strength in London
"London has established itself as one of the global leaders for climate tech. We have fantastic London-based climate innovation, green tech businesses flocking to London from all over the world, and big VC funding for the sector. As VC levels begin to return to pre-pandemic levels, our job is clear: keep building on this momentum to make London an even better ecosystem for startups and small businesses to succeed.” says Laura Citron, CEO of London & Partners
VC strength in London remains remarkably resilient, London-based VC investors have raised over £18.87B of dry powder in the last three years. London-headquartered VC funds account for over 30% of all VC raised in Europe in the last three years.
In addition, London continues to attract a series of large international VCs and funds including A16z, Antler, and BDA Partners, as well as several impact funds including Sustainable Ventures, Octopus Ventures, and 2150.
