Data Suggests Brexit Failed to Knock Tech Investment in U.K.

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(Bloomberg) — U.K. tech companies raised more capital than any other European country in 2016, while SoftBank Group Corp.’s acquisition of ARM helped Britain achieve a record year for tech deals, according to a survey conducted by the U.K. capital’s promotional company, London & Partners.

The report, which was based on data compiled by research firm PitchBook Data, showed that private equity and venture capital firms invested more than 6.7 billion pounds ($8.1 billion) in U.K.-based companies, up from 5.6 billion pounds in 2015.

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The closest rival was the Netherlands, which pulled in 1.3 billion pounds over 2016.

The depreciation of the pound played a significant part in the investment into the U.K., said Russ Shaw, the founder of Tech London Advocates, an industry body. Sterling collapsed an unprecedented 8.1 percent on June 24, when the result of the U.K. to leave the European Union was announced.

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He added that the future of European nationals working in London remains a major issue for the continued growth of the U.K. tech sector.

However, Shaw said that he’d been “blown away by what we have seen over the past six months,” citing the recent hiring plans of Google, Facebook Inc. and Snap Inc., who have all announced plans to expand in London.

The two quarters following the U.K.’s vote to leave the European Union were also the strongest of the year for deal-making, driven by SoftBank’s $32 billion acquisition of ARM in July.

The year was also a record for tech M&A, with more than 71 billion pounds worth of deals completed in the U.K., according to London & Partners. Data compiled by Bloomberg showed $61.5 billion of technology deals inked in the U.K., still a record and up 67 percent from the previous high in 2006.

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A third of venture capital and private equity investment was directed at the U.K. capital. Sadiq Khan, the Mayor of London, said in a statement Thursday that it was “not surprising that London continues to go from strength to strength as the undisputed tech capital of Europe.”

Concerns, Embarassment

However, the U.K. has recently been under fire for failing to do enough to promote its tech sector.

Gary Shapiro, president of the Consumer Technology Association, said last week that the U.K.’s lack of support for the startups attending the CES event was “a source of embarrassment.”

A group of prominent U.K. tech investors and entrepreneurs in December also published a public letter to British Prime Minister Theresa May, laying out their concerns for the local technology industry after the country’s eventual exit from the European Union.

The U.K. is not the only place enjoying a rise in venture capital. The U.S. venture industry raised $41.6 billion last year, the highest since 2001, according to a report from PitchBook Data and the National Venture Capital Association, a U.S. trade group.

Tech investment in the U.K. has also started strongly this year. Funding Circle Ltd., the biggest online lender for small businesses in the U.K., has raised $100 million in equity funding, it said in a statement Thursday.

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