The news: The UK now has 100 tech firms valued above $1 billion and is only the third country to cross this milestone, following the US and China, per a Tech Nation report.
Data zoom-in: For context, the UK has more tech unicorns than Germany (42), France (22), and the Netherlands (18) combined. The number of tech unicorns in the UK grew exponentially: In 2017, there were just 44 unicorns; this year, 13 unicorns have already been formed, more than the seven for all of 2020.
How did the UK reach this milestone? A nurturing regulatory environment created fertile pastures that encouraged large fintech raises, leading unicorns to multiply.
The UK ranks No. 1 in open banking adoption in Europe, giving fintechs standardized access to a wealth of user bank account data, which helps develop their services and attract investors. In addition, the Financial Conduct Authority is known to be accommodative of industry changes; for example, it recently extended the anti-money laundering requirements deadline for crypto trading.
As a result, fintech startups constituted the largest share of the 100 tech unicorns, at 34%, leading other subsectors, including healthtech, travel and transport tech, foodtech, and gaming.
In 2021 alone, in the UK:
The bigger picture: Fintechs are driving unicorn record-setting across the world.
Fintechs tied with internet software and services for the biggest share of unicorns globally, at 15%. Payments startups have done especially well, with Stripe and Checkout.com being the highest-valued unicorns of any sector in the US and UK, respectively, while BNPL Klarna is, in fact, the highest-valued private company in all of Europe, per CB Insights Complete List of Unicorn Companies.
Future unicorns-to-be extend beyond payments to include open banking providers and neobanks. For example: