The tech scene in London recently saw its best-ever quarter, with a record-breaking $682m (£466.7m) funding raised in the first three months of the year, with one company alone bringing in $100m in February.
Financial tech, or fin-tech, as it is more commonly called, is particularly popular with investors, as is the virtual reality sector, such as Improbable, which received $20m in funding from the US. This platform enables developers to create virtual reality experience for clients.
The e-commerce sector has also been successful this year as far as investment activity goes, particularly in the areas of fashion and retail technology. One new start-up called Farfetch specialises in aggregating offerings online for small independent boutiques and this firm alone brought in $86m (58.8m) in funding this year.
Start-ups in the UK are able to leverage many advantages that enable them to grow their business rapidly, as entrepreneurs no longer have to spend a lot of money to get started and can take advantage of cloud-based services that allow them to project a professional image at affordable prices while working from home.
The Government is also behind tech start-ups, as evidenced by a commitment of £500m in the 2015 Budget that will be allocated to the next generation of tech initiatives and will boost tech clusters all over the country. In fact, tech is on target to compete with the financial sector in terms of the relative size of the contributions each makes to gross domestic profit (GDP).
However, the UK is still no threat to California’s Silicon Valley and this is because Americans are more prepared to take risks and dream big, according to start-up experts. As one of them said, the British too often respond with scepticism to new things and find reasons why something won’t work rather than why it will.
That said, British entrepreneurs are becoming more savvy when it comes to finding investors and then looking after their employees when they are up and running, which could make the difference between a flash in the pan and sustainability.