- One hundred UK tech firms are valued above $1 billion, mostly thanks to its fintech sector.
- Watch the following sub sectors for more unicorns to appear worldwide in the coming year.
The UK now has 100 tech firms valued above $1 billion and is only the third country to cross this milestone, following the US and China, per a Tech Nation report.
For context, the UK has more tech unicorns than Germany (42), France (22), and the Netherlands (18) combined. The number of tech unicorns in the UK grew exponentially: In 2017, there were just 44 unicorns; this year, 13 unicorns have already been formed, more than the seven for all of 2020.
How did the UK reach this milestone? A nurturing regulatory environment created fertile pastures that encouraged large fintech raises, leading unicorns to multiply.
The UK ranks No. 1 in open banking adoption in Europe, giving fintechs standardized access to a wealth of user bank account data, which helps develop their services and attract investors. In addition, the Financial Conduct Authority is known to be accommodative of industry changes; for example, it recently extended the anti-money laundering requirements deadline for crypto trading.
As a result,
constituted the largest share of the 100 tech unicorns, at 34%, leading other subsectors, including healthtech, travel and transport tech, foodtech, and gaming.
In 2021 alone, in the UK:
- Neobank Starling raised £272 million ($375.8 million), bringing its new valuation to £1.37 billion ($1.89 billion);
- Insurtech Zego reached a $1.1 billion valuation after a $150 million raise; and
- Insurtech Tractable’s $60 million raise last week brought the UK to the triple-digit milestone.
Fintechs tied with internet software and services for the biggest share of unicorns globally, at 15%. Payments startups have done especially well, with Stripe and Checkout.com being the highest-valued unicorns of any sector in the US and UK, respectively, while BNPL Klarna is, in fact, the highest-valued private company in all of Europe, per CB Insights Complete List of Unicorn Companies.
Future unicorns-to-be extend beyond payments to include open banking providers and
. For example:
- Sweden-based Tink hit a €680 million ($867.9 million) valuation last December and will likely follow in the footsteps of Plaid’s recent $13.4 billion valuation; and
- Zopa and Atom Bank, Starling’s neobank peers in the UK, are favorites to reach $1 billion, per Dealroom.
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