The number of new tech companies formed in the UK hit a five-year high in the first quarter of 2024, with more than half of those businesses based in London.
Data from RSM UK shows that high interest rates and low consumer confidence have done little to deter tech entrepreneurs.
In total, 13,801 new tech companies were incorporated, up 11% year-on-year and the highest figure since 2019. That included 7,253 in London, up 16%.
Artificial intelligence has likely played a large part in the surge. In January the Evening Standard revealed that more than 500 new companies with “AI” in their names were registered in the UK in the final three months of 2023 alone.
Ben Bilsland, partner and head of technology industry at RSM UK, said: “2024 got off to a great start with the largest number of UK tech incorporations in five years. UK tech continues to go from strength to strength, despite ongoing macro-economic uncertainty in the UK and overseas. A key factor is the strength in depth of the UK’s tech sector. Our advice to tech entrepreneurs is to engage with tech businesses around them to collaborate, innovate and grow together.
“ “High rates of borrowing and uncertainty around inflation can have a detrimental impact on the risk appetite and patience of investors. As interest rates stabilise, inflation slows, and business confidence improves, this bodes well for further growth in the sector. The development of innovative technologies requires a significant amount of investment and time, so an increase in both of these factors to enable the creation of new products will be hugely welcomed by UK tech companies looking to grow.”
