EU investment in UK tech plunges post-Brexit

Funding from the European Investment Fund (EIF) into UK tech companies has decreased.

The European Union’s (EU) investment arm poured just €61m (£53m) into UK-focused funds last year, representing a 91% decrease on the year before.

According to The Telegraph, the decline comes despite taxpayers in the UK continuing to contribute to the EIF, which is largely owned by the European Investment Bank.

EIF is a partnership between the EIB and private investors, which backs investment funds rather than the company itself.

While the EIF has never confirmed that it halted investment into the UK, technology investors say it effectively stopped the funding when Article 50 was triggered a year ago.

A  spokesman for the EIF denied it had stopped backing UK companies: “We can confirm that there is no moratorium on investments into funds in the UK.

“It is the case that due diligence on them now needs to be more thorough, and take into account a wider range of factors.”

The fund published its annual report last week, and said it had invested in just three UK-focused investors in 2017, compared with 20 the year before.

According to the data, The EIF’s level of funding across Europe has remained stable at €9.3bn, but the amount committed to UK-focused investors decreased from €708.8m to €61.1m. These figures, however, do not include pan-European funds, some of which are based in the UK.

The news comes amid claims that UK tech startups received more funding than any other European country last year.

According to data released by London & Partners, VCs invested £3bn into UK tech companies last year – more than for times than their German counterparts.

UKTN’s own data also shows year-on-year increase in VC funding into UK tech firms. Our UK tech investment tracker shows that technology companies founded in the UK raised a combined total of £1.4bn in 2016. The same figure in 2017 rose to £4.1bn.