Mar 14, 2022
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London well placed to maximise digital boom - Klarna research

Mar 14, 2022

The UK, and London in particular, was a major success in attracting funding for digital shopping projects last year, according to a new report. The global pandemic-inspired boom in online shopping saw the country benefit particularly in drawing record levels of financing in 2021, Klarna-sponsored research claims.

Photo: Pexels/Andrea Piacquadio

Global venture capital investment in digital shopping more than doubled in 2021 with a total of $140 billion raised, up from $68 billion in 2020, according to London & Partners and Dealroom.

And British firms raised an unprecedented $7 billion of that total in 2021, more than double the $3 billion raised in 2020. That made the UK the top-ranked European country for venture capital investment into digital shopping last year and was fourth globally, behind China, India and the US. 

But London was a driving force behind UK investment growth, with a record $5 billion raised by digital shopping companies based in the capital. London also ranked fourth on the global stage, behind San Francisco, New York and Bengaluru. 

The UK capital also housed more digital shopping unicorns (21) than any other European city and was fourth globally behind Beijing (36), New York (39) and San Francisco (51). Household names in London’s unicorn club include online fashion retailer ASOS and fashion marketplace app Depop. 

And the good news is that financing for London’s digital shopping sector is showing no signs of slowing in 2022, with the overall enterprise value of the capital’s firms soaring from $89 billion in 2020 to $119 billion in just a year. 

According to predictions from Dealroom, the number of future digital shopping unicorns in London is set to expand to 24 in 2022. 

Laura Citron, CEO at London & Partners said: “This data shows that London is leading the way on the evolution of retail. London is a brilliant place to grow a digital shopping business – with some of the world’s most digitally savvy customers and record levels of growth capital. It is also home to the next generation of physical retail, with both traditional and digital-first brands investing in experiences to delight shoppers. The West End is set for a speedy recovery, with turnover hitting £10 billion within two years.”

Simon Leesley, UK managing director of US online styling service Stitch Fix, added: “We chose London as our first international HQ because of the UK's dynamic, fast-moving retail market - home to high street icons, some of the most exciting up and coming fashion brands and a wealth of industry-leading talent. It's a privilege to play a part in this innovative retail landscape.”

Meanwhile, supporting data from financing giant Klarna  confirmed that global consumer behaviour is in line with rising levels of investment in the sector, with its new study finding UK consumers to be the most digitally savvy across the globe. 

UK consumers are found to be more open to shopping online, with 48% surveyed making online purchases at least once a week. This was higher than any other country globally, with the US (43%), Australia (38%) and Germany (40%) the other markets making up the top five.

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