Today's business and finance round up 21st September 2021
✨London start ups on course for record year
21st September 2021
Good morning After leaving European allies disgruntled with its approach to Afghanistan and ticking off France with the Aukus submarine deal, the US has finally shared some good news with its neighbours across the pond. From November UK and EU travellers will be allowed to fly into the US if they are fully vaccinated, and undergo testing and contact tracing.
- London start ups on course for record year
- Energy fallout continues
London start ups on course for record year
What’s going on?
New figures show that London start ups are on track for a record year of investments from venture capital (VC) firms.
According to Dealogic London has attracted more VC investment than anywhere else in Europe and now boasts more unicorns – firms valued at more than $1bn – than France and Germany combined.
Why is this important?
London is a good place to be if you’re a start up looking for cash.
So far this year start ups in the capital have raised more than £13.5bn in investment– more than for the whole of 2020.
The tech sector led the way with a series of mega funding rounds, half of all rounds raised this year were over $100m.
Banking app Revolut received the most funding, raising £577m in July, this brings its valuation to £23bn and it’s now the UK’s largest tech company.
Other top fundraisers include cybersecurity platform Snyk and online event company Hopin who both raised over £200m in March.
The influx of cash has sent company valuations rocketing and the UK now has over 100 unicorns.
Also the investment boom has spread beyond London. Manchester, Cambridge, Oxford, Bristol and Edinburgh have all seen huge increases in VC funding.
Attracting fast growing tech start ups is the thing of government dreams. More funding means more job creation which means more economic growth.
In a post Brexit world the UK is trying hard to position itself as a leading tech centre to rival the likes of Silicon Valley and China. The pandemic has accelerated the move to digital businesses which have proven more resilient than physical counterparts in the past 18 months.
Energy fallout continues
On Monday we reported on the turmoil in the global energy markets. In short, gas prices have jumped 70% in August and over 10% in the past week alone. This led to emergency meetings between the government and energy providers.
Those talks continued yesterday with the Business Secretary, Kwasi Kwarteng, saying that he does "not expect supply emergencies" and described concerns over gas shortages as "alarmist".
He also said that the government wouldn’t be bailing out struggling providers.
But many firms in the industry are on the brink of collapse. Since August five suppliers have gone bust with four more rumoured to go under this week.
Bulb, the UK’s sixth largest supplier, is in talks with its banks to secure extra funding to stay afloat.
All this means that there is major consolidation on the way. At the beginning of the year there were 70 energy suppliers in the UK, but industry experts have said there may be as few as 10 left by the end of 2021.
Back in 2019 the government introduced an energy price cap to protect the millions of households that don’t switch their energy and are on standard variable tariffs.
The cap means suppliers can’t immediately raise prices to reflect the higher wholesale costs. As a result, many operators are now losing out on servicing customers on unprofitable deals.
The issue mainly affects smaller suppliers, as large companies will have hedged their exposure by agreeing prices to buy electricity in advance.
Shares in energy companies fell on the latest turn of events: British Gas owner Centrica dropped 1.1%, National Grid fell 1.1% and price comparison site Moneysupermarket plunged 9% as providers came off their switching panel.
Stat of the day
Netflix became the first streaming service to win the most Emmy Awards in a single year, winning 44 trophies including 11 for the Crown
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