A recent report from the City of London Corporation – Tech SME Landscape – has found that technology small and medium-sized enterprises (SMEs) in the City of London have attracted £7.2 billion in private investment over the last five years. So, let’s have a look at some of the sectors attracting and driving this flourishing investment.
Investment Focussed On Emerging Technologies
Today, technology simply makes the world go round. Technology helps us to wake up, speak to our friends, and even entertains us. Due to emerging technologies over the years, new entertainment, functions, and devices have been able to provide people with virtual alternatives to traditional in-person experiences.
For example, the boom in augmented reality (AR) has not only impacted entertainment but has also influenced art exhibitions, online shopping, educational content, and tourism, to name a few. Similarly, online casino games utilise emerging graphic design technologies, random number generation, live streaming, and AR to provide immersive virtual experiences. Today, players can find a wide range of different slots online through a variety of platforms, which can be accessed via any internet-connected device due to cloud hosting and high definition graphics streaming. Thanks to technological innovations and their relative algorithms, these games are continually evolving and growing in complexity of graphics, themes, and mechanics, encouraging burgeoning franchises such as Big Bass, Eye of Horus, and Age of the Gods to continually adapt their gameplay with updated technologies.
Of course, this is just one snapshot of how technological innovation has made an impact – the wider influence is infinite. However, if there’s something that the City of London knows about, it’s innovation. Known as a global innovation hub, the area is home to more than a third of the country’s tech SMEs, with more than 2,830 active tech SMEs in the City. In addition, 32.2% of these are in the seed stage of evolution. The City is also home to almost three-quarters of the country’s tech unicorns, which highlights it as a desirable location for those who are looking into emerging technologies – be it a large or small company.
Key Subsectors for Investment
To provide context, the Tech SME Landscape Report comes after the City’s first SME Strategy, which aims to ensure that the area is accessible for businesses of all sizes. With this in mind, the report looked into the subsectors, demography, and clustering of tech SMEs in the City, the results of which can then be used to inform the development of support for SMEs, particularly for those in the stages of early growth or where there is an under-representation.
Perhaps unsurprisingly, the leading subsector in the City is Fintech. Why unsurprising? This is because London is the top global financial centre, or hub, thanks to its convenient time zone, amenable regulations, and many other benefits. Reaping the benefits from the established financial sector, Fintech SME investment reached record highs last year with £810 million. This was more than double of the previous year, which totalled £354 million.
Other subsectors seeing a boom in investment are data and artificial intelligence (AI). In the first three quarters of 2024, these subsectors generated £383 million in investment, which put them on an upward trajectory that could surpass the record investment from 2022 of £514 million. As these subsectors are seeing such rapid growth, this highlights areas that can be supported to ensure that the tech sector continues to be relevant and forward-thinking with emerging tech trends.
Overall, the City of London remains a global innovation hub, attracting start-ups and SMEs, as well as unparalleled investment.
