Wales’s tech industry has made a fast start to 2022, as Digital Minister Chris Philp announced the latest figures which showed the wider UK sector is now worth $1 trillion in value, becoming only the third in the world to ever reach this landmark valuation.
Cardiff is in the top 10 cities in the UK when it comes to tech investment so far in 2022, with £7.4m of investment already raised according to the figures calculated by Dealroom and analysed for the UK’s Digital Economy Council. Wales’s traditional base for fintech and insurtech companies has continued to grow with the private markets technology company Delio recently raising £6.1m in growth funding.
Alongside the mammoth tech investment coming into the country, another driver of its success is the high demand in Wales for digital skills in non-digital sectors. This demand has seen average advertised salaries rise too – from £41,505 in 2020 to £49,612 in 2021, an increase of 19.5%.
Today’s figures follow a bumper 2021 for Wales, with startups in the country raising £39 million in one year, with 13 venture capital rounds taking place in Cardiff last year. Cardiff is also home to one futurecorn, a high-growth tech company predicted to be worth $1 billion in valuation in the next few years, in the form of fintech platform Sonovate, which provides finance and tech solutions to recruitment agencies and other businesses to engage contractors and freelancers.
Explosion in UK tech
In 2018, the UK tech ecosystem was valued at $446 billion and was steadily growing until 2020 when it surged 42% to $942 billion because of increased investment activity into digital tools during the start of the Covid 19 pandemic and an active stock market. This has helped to catapult the valuations of many companies from unicorns – companies valued at $1 billion or more – to the rarer decacorns spot, for companies worth over $10 billion or more.
The UK is now home to 13 decacorns, of which 10 have gone on to IPO, and are the most highly valued tech companies in the country. This is double that of Germany (6) and three times’ Sweden (4).
The 13 UK decacorns:
- Markit – big data
- WorldPay – fintech
- Checkout.com – fintech
- Revolut – fintech
- ARM – semiconductors
- FNZ – fintech
- Wise – fintech
- Rapyd – fintech
- Ocado Group – e-commerce
- Admiral Group – fintech
- Global Switch – data centres
- eToro – fintech
- Deliveroo – e-commerce
This coveted club is set to grow in size over the next few years with 14 UK companies, with valuations of between $5bn and $10bn that are expected to become the next decacorns.
These include cyber security company Synk, zero-emissions transport company Arrival and virtual events platform Hopin. This is more than Germany (5), France (3) and Sweden combined.
This growth is only set to continue. Research by DCMS published last year found that the Welsh digital sector has the potential to grow by at least £400 million in annual GVA by 2025 and created an additional 11,300 jobs.
Gareth Lewis, co-founder and chief executive at Delio, said:
“The Welsh tech scene has seen an exciting period of growth, and it is really encouraging to see more home-grown businesses thrive. Now it is time to take this progress to the next level and strengthen our reputation on the international stage. At Delio, we have the pleasure of working with over 90 financial institutions worldwide, and we're not alone in this. It is important to celebrate how many companies across Wales are beginning to operate on a global level.”
Digital minister Chris Philp said:
“Our tech industry has gone from strength to strength, overtaking the rest of Europe and entering the history books as the third country ever to reach this milestone. We’re working hard to make the UK the best place in the world to found, grow or float tech businesses – whether they’re early-stage startups or global innovators – ensuring they have the best talent, investment and regulation to thrive.”
Julia Hawkins, general partner at LocalGlobe, said:
“This is a brilliant milestone for the UK tech industry. Despite the overwhelming challenges of the past few years, UK tech has provided the means to keep us connected and moving forward and helped transform industries across the country, particularly in the healthcare sector. It’s exciting to be a part of this dynamic ecosystem and I look forward to seeing these startups and scaleups grow over the next few years.”
