Boris Johnson’s promotional agency, London & Partners, may have overhyped the growth of the UK’s tech sector this week in order to give the impression that the nation, and London, is doing better than it actually is when it comes to tech.
London & Partners released a report saying investment into the UK tech sector grew 70% between 2014 and 2015, citing data from US-focused VC data aggregator, CB Insights. The Financial Times, Bloomberg, Reuters, Business Insider UK, and many others ran this story.
But Dealroom, a VC data aggregator with a focus on Europe, published a blog post on its website claiming the London & Partners figures are wrong, adding that its own data on UK tech investment shows “a very different picture”.
London & Partners said venture capitalists invested $3.6 billion (£2.5 billion) into UK technology companies last year and $2.1 billion (£1.4 billion) in 2014 — an increase of 70%.
Dealroom, on the other hand, saw a 10% decrease in the amount of money being invested in UK technology companies between 2014 to 2015. It says €4.5 billion ($4.8 billion) was invested into UK tech last year, compared to €5 billion ($5.4 billion) in 2014.
Dealroom founder and CEO Yoram Wijngaarde, a former associate at Lehman Brothers investment bank, told Business Insider that the 70% growth figure seems wrong, adding that it could lead to mistaken policy decisions.
“A 70% growth figure is something you wouldn’t see in the UK,” Wijngaarde said via email. “We’re not talking about an emerging market here. The UK has had a well established tech ecosystem for many years. Yes the UK market is hot, but it has been for a few years now.”
To make matters worse for London & Partners, the press release it sent out to journalists this week stated that peer-to-peer money lending service Zopa had raised $106 million (£73 million) in 2015, when in actual fact, Zopa didn’t raise anything last year.
London & Partners has since removed the Zopa reference from the release that has been posted on its website.
The news that investment into the UK tech sector increased by 70% was shared by a number of key figures in the UK tech industry, as well as government-funded agency Tech City UK.
A number of technology journalists, including The Wall Street Journal’s Amir Mizroch and Tech.eu’s Robin Wauters, questioned the 70% figure on Twitter.
Here’s what Wijngaarde wrote in his blog post:
“What isn’t important here, is the absolute difference between $3.6 and $4.9 billion. That may be attributable to definitions (e.g. how “tech” or “VC” are defined). What is important is the questionable 70% growth figure. That figure just seems at odds with the dealflow we have been tracking since 2014, and also not the type of % change you would normally expect in a fully developed VC market that is the UK (70% is is an “emerging market” type growth figure).
“At Dealroom we don’t claim to have perfect data either, far from it. In fact, I would say that the 11% decline is insignificant and therefore our conclusion is that 2014 and 2015 are roughly equal (2014 was already a strong year). Our data sources don’t differ very much from CB Insights, but at dealroom.co we focus on Europe (and beyond) and we have an open-data model that allows us to benefits from thousands of contributors, to augment the data we aggregate. This probably led to us having more comprehensive data set over both 2014 and 2015. Our London data also looks rather different.”
Anand Sanwal, CEO and cofounder of CB Insights, told Business Insider: “A lot of clients generate reports using our platform. We’re not involved in the creation of those reports so don’t know what they included or did not include.”
London & Partners declined to comment.