London was once the tech capital of Europe. Where did it all go wrong?

Telegraph

2 days ago

Baroness Helena Morrissey DBE is a City 'superwoman' who, among other senior roles, ran Newton Investment Management for 15 years while supporting a family of 11. She also founded the 30 Percent Club, which seeks to bring more women on to company boards.
London is no longer Europe's tech capital. Paris has taken that title, coming in fourth in the league table of the world's top technology centres, while London has slipped to sixth, according to Dealroom's 2025 report. Both are flanked by American cities.
This shift signals a troubling loss of momentum, and is underscored by KPMG data showing UK fintech investment at a four-year low in 2024 – $9.9bn (£7.3bn) compared with 2021's spike of $48.1bn.
For years, London led Europe's fintech boom. Fuelled by world-class developers, creative talent and a deep venture capital market that consistently funded innovative start-ups, the City fostered a vibrant tech ecosystem.
Shoreditch, London's start-up destination of choice, became synonymous with fintech and new agile ways of working. The proof of success? London's tally of 125 tech unicorns – companies valued at $1bn or more – far outpacing Paris (53) and Munich (17).
Yet past success guarantees nothing. Dealroom's data reveals a stark contrast: 'total funding growth' for technology companies based in Paris is up nearly 24pc over the past four years and a whopping 60pc for Austin, Texas – but London has seen a 7pc decline.
Where has it all gone wrong?
As a country we have taken our eye off the ball when it comes to creating an attractive environment for start-ups and scale-ups – just as others have raised their game.
In 2015, I was a member of the UK's Financial Services and Trade Investment Board (FSTIB), a partnership between government and industry formed by George Osborne, the then chancellor, to help propel high-growth areas. Fintech was a top priority, with five key ingredients identified to maintain the UK's attractiveness: supportive regulation, plentiful investment, global connections, top talent and integration with other financial and professional services.
However, FSTIB was disbanded in 2019 and, while trade bodies have been doing what they can, no one has been pulling it all together – a challenge exacerbated by the frequent change of leaders in government. As a result, our early advantage has slipped away.
Revolut, a fintech star, offers a perfect – if depressing – case study. Founded in 2015, the digital bank was valued at $45bn last August, making it Europe's most valuable private technology company, but it took three years for Revolut to secure a UK banking licence.