London well positioned to take advantage of global digital shopping boom — Retail Technology Innovation Hub
London saw record levels of venture capital investment in the digital shopping space in 2021, according to research sponsored by Klarna from London & Partners and Dealroom.co.
Venture capital investment in digital shopping more than doubled in 2021 following a major consumer shift to e-commerce platforms amid the Covid pandemic, with a total of $140 billion raised in 2021, compared to $68 billion in 2020.
UK companies pocketed $7 billion in 2021, more than double the total amount raised in 2020 ($3 billion).
The UK was the highest ranked European country for venture capital investment in digital procurement in 2021, and fourth globally behind China, India and the US.
London has been one of the drivers of investment growth in the UK, with a record $5 billion raised by digital shopping companies based in the capital.
It also ranked fourth on the world stage, behind San Francisco, New York and Bangalore.
Notable investment rounds in London-based digital shopping businesses in 2021 included: £300m raised by car retailer, Carzoo; $180 million Series H funding round for food delivery service, Deliveroo and $40 million secured by dog food delivery service, Butternut Box.
The research also revealed that London is a prime location for digital shopping companies looking to scale their business quickly, with the UK capital home to more digital shopping unicorns (21) than any other European city and the fourth largest globally. behind Beijing (36), New York (39) and San Francisco (51).
Known names in London’s Unicorn Club include online fashion retailer Asos, online leisure retailer Lastminute.com and fashion marketplace app Depop.
London’s digital shopping sector shows no signs of slowing down in 2022, with the overall enterprise value of London businesses rising from $89 billion in 2020 to $119 billion in just one year. According to Dealroom.co, the number of future digital shopping unicorns in London is expected to grow to 24 in 2022.
Laura Citron, CEO of London & Partners, said: “These data show that London is leading the way in the evolution of retail. London is a brilliant place to grow a digital shopping business – with some of the most savvy customers in the world and record levels of growth capital.
“It is also home to the next generation of physical retail, with traditional and digital first brands investing in experiences to delight shoppers. The West End is poised for a rapid recovery, with turnover hitting £10billion within two years.
Simon Leesley, Managing Director UK, Stitch Fix, an online styling service in the US, adds: “We chose London as our first international headquarters due to the dynamic and rapidly changing UK retail market. – home to high street icons, some of the most exciting and upcoming fashion brands and a host of industry leading talent.
“It is a privilege to play a part in this innovative retail landscape.”
“UK consumers are known to be quick adopters of new technologies and the level of e-commerce innovation in London and the rest of the UK clearly reflects this,” comments Alex Marsh, Director of Klarna UK.