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London leads as number of new UK tech companies hits five year high

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London emerged as the leading location, with 7,253 incorporations of tech companies in the first quarter of 2024. (Source: Matt Alexander, PA Wire)

London has continued to prove its popularity as a tech hub after the highest number of UK technology companies were incorporated in the capital during the first quarter of 2024.

The number of UK tech businesses formally registered as limited companies surged by 11 per cent to 13,802 in the first quarter of this year, reaching a five-year peak.

It was a rise of 4.4 per cent on the previous quarter’s 13,218, according to the data from audit, tax and consulting firm RSM UK.

Of these, London emerged as the leading location, with 7,253 incorporations of tech companies in the first quarter of 2024, up 16 per cent from 6,278 in the same period of 2023.

The next-highest number was in the South East, with 1,350 new incorporations.

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.”

Last year, a record-breaking 51,017 new tech companies were incorporated, according to RSM.

However, Bilsland warned: “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.”

He added: “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.”

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