London's tech sector has shrugged off Brexit concerns to remain the principal destination in Europe for technology investment in 2018, according to data published on Wednesday.The report from funding database PitchBook found that nearly double the amount of capital was ploughed into London tech ventures during 2018 than the amount attracted by Berlin, the continent's second most popular venue.

London companies attract the most tech inward investment

London companies attracted £1.8 billion pounds in venture capital funding during the year, almost three-quarters of the £2.5 billion total raised by all UK tech businesses. This compared to £936 million secured by Berlin and the £797 million that went to third-placed Paris.Eileen Burbidge, a partner at venture capital firm Passion Capital, said London had retained its preeminent position as Europe's leading hub for financial technology thanks to its position as one of the world’s biggest financial centres and the fact its universities helped to create companies offering artificial intelligence.“We get a lot of calls and inquiries from investors in the US and Asia looking for fintech opportunities,” she told Reuters. “In fintech, AI and a few other sectors such as life sciences and robotics, London genuinely leads the world.”

'Fintech' Financial technologies secure the most funding

City AM reported that fintech remained London’s most attractive sector of the tech industry, securing more than £1 billion in funding. The capital hosted more than 90 per cent of the UK’s financial start-ups that raised funds during the course of 2018."Digital banking unicorns, which are companies with valuations of over $1 billion (£784.9m), led the way with several mega rounds in 2018. Revolut took the crown in April with a £179m round, while rival Monzo raised £105m in November and savings challenger Oaknorth closed a £77.5m round in September," said City AM."All three are planning to expand internationally this year, while Revolut and Oaknorth are both said to be courting new funding from Japanese mega-investor Softbank. The tech giant’s Saudi-backed Vision Fund has previously backed the likes of Wework, Uber and London developer Improbable."

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Long term success will depend on access to talent and digital skills

Russ Shaw, founder of industry body Tech London Advocates, warned that despite the city’s continued appeal to investors, access to talent would remain the UK’s greatest challenge.“This year is the time to put in place long-term strategies that look at digital skills and lifelong learning, in anticipation of the job displacement that is coming,” he said.

High investment into tech and AI is expected to outweight any negative Brexit impacts

But Rajesh Agrawal, the capital's deputy mayor for business, said he was confident London would continue to attract talent and innovation from across the globe, regardless of the outcome of Brexit.The UK’s fastest growing sector was artificial intelligence, with investment hitting a record £736 million last year, a 47 per cent increase on 2017. Other growth sectors included big data, blockchain and cryptocurrencies, which also saw all-time high investment numbers.Across Europe as a whole, however, funding decreased slightly last year, raising a total of £10.44 billion, compared to 2017’s record high of £10.47 billion.Alliott Cole, chief executive of London investment firm Octopus Ventures, said London must "play to its strengths" if it is to continue enjoying its leading position. He cited close proximity to the City as an advantage for fintech firms over their European counterparts, as well as several high ranking universities that provided a solid talent and research base for the AI sector.

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