Cyber Exchange launches report detailing the strong growth and investment across the UK cyber ecosystem
A new report explores how government and industry are working together to grow the sector and drive investment across all cyber companies in every nation and region of the UK.
Key takeaways from Growing UK Cyber: Cyber Exchange Report 2022 include:
- UK cyber security start-ups are now worth $30bn, with 78% of total value created by start-ups founded after 2021 and university spinouts accounting for 18% total value.
- The UK cyber ecosystem grew faster than top global ecosystems. The combined enterprise value of HQʼd and founded start-ups has grown 7.6x since 2017, faster than the US, China, the EU and Israel. Work to do though, the UK Cyber ecosystem remains 24x smaller than the US, and 4x smaller than Israel.
- UK cyber security start-ups raised more than $600M in 2022 YTD, a record. Record investment had been driven by an increase in late stage and mega rounds, while early-stage funding is at its lowest since 2016. Foreign investors are driving mid to late stage rounds, contributing more than 67% funding in 2022 YTD
- The ecosystem is becoming more geographically distributed, as UK regions outside of London host some of the of the most promising cyber security start-ups.
- University spinouts represent 18% of the combined enterprise value of the UK cyber security ecosystem.
As the significance of cyber security has grown, we have seen the UK cyber sector grow rapidly, with DCMS measuring the growth of the sector every year in its Cyber Security Sectoral Analysis. In the latest analysis, there were an estimated 1,838 cyber companies operating in the UK, with the sector generating £10.1bn in revenue and employing over 52,700 people.
This growth drives economic prosperity, whilst in turn strengthening our National Security capability, pulling through leading-edge technology, and fostering new talent. This is a virtuous circle. Cyber security has long since been a strategic focus for UK Government, with the publication of the third National Cyber Strategy in 2021 renewing that commitment whilst developing a whole-of-society approach to strengthening resilience.
This strategic long-term approach has gone some way to ensuring the UK remains a leading cyber nation alongside allies like the US, EU and Israel.
But how do we stay there? Increasingly we see nations investing and developing their own Cyber security ecosystems. Beyond 2022 we must ensure that the UK is the best place to start and base a cyber company, to ensure we continue to develop the technology and talent to meet the cyber threats of the future.
This Cyber Exchange Report explores how government and industry are working together to help cyber security companies to grow, drive investment in new companies and develop talent across every nation and region of the UK.
To view the full report click here.
Julian David, Chief Executive Officer, techUK said:
"This report outlines significant success in both investment and innovation across the UK cyber security eco-system, highlighting how the sector plays a growing role for both National Security and economic prosperity.
"As we move beyond 2022, with heightened threats from both nation state actors and cyber criminals, as well as a more uncertain economic outlook, Government and industry must look to build on these strong foundations by delivering the National Cyber Strategy, ensuring that the UK is the best place to start and base a cyber security company and maintaining the UK’s position as a global leader in cyber security."
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