China may be the world's second-largest economy, but the UK is punching above its weight when it comes to funding startups.
UK startups will raise $6.7 billion in funding in the first half of 2024, overtaking China to make the UK the world's second-highest funded country, according to a new report.
Key to the UK's success were 12 funding rounds totalling more than $100 million, including from digital bank Monzo ($620 million), lender Abound ($862 million) and self-driving startup Wavee ($1.05 billion).
While the UK's overall figure was down 2% year-on-year, it was still stronger than China, which saw fundraising reach $6.1 billion in the first half of 2024, helping the UK leapfrog into second place globally, according to data from global market intelligence platform Tracxn.
The win marks a milestone for the UK's technology industry, which continues to be under pressure from a series of challenges including Brexit, COVID-19 and the subsequent global economic slowdown.
The United States was the only country where startups raised more money in the first half of the year, with approximately 2,654 funding rounds totaling $54.8 billion in the first half of the year.
Of further concern for the UK going forward is the relatively low number of start-ups valued at over $1 billion, significantly fewer initial public offerings (IPOs), and a decline in both international and institutional investors backing UK start-ups.
The only new unicorn recorded in the first half of 2024 was Tracxn, the hospitality management software provider Mews, but it's not even a UK unicorn as it was founded in Amsterdam.
On the IPO front, the London Stock Exchange has been suffering from a dry spell of new listings, with many high-growth companies opting for other European markets or the US rather than the UK.
Tracxn is one of only three companies to have recorded a UK IPO: Marex, AWAKN and Perfect Moment.
There were just 546 active institutional investors operating in the UK in the first half of 2024, down from 729 in the first half of 2023. The number of international investors similarly fell, falling from 437 in the first half of 2023 to 326 in 2024.
With the UK's new Prime Minister, Keir Starmer, in office, many will be hoping that the first Labour government in 14 years will continue to uphold the UK's position as a major player in the global technology world.
