The sale this week of London-based Magic Pony Technology to Twitter Inc has provided another shot in the arm for the capital’s tech scene and should encourage further interest from international investors predicts RSM.
‘The sale of Magic Pony to Twitter for a reported $150m is the latest in a series of big ticket acquisitions of UK tech firms by the Silicon Valley behemoths. This follows on from Microsoft’s acquisition of Swiftkey in February and Apple’s purchase of VocalIQ in October last year.
‘This is fantastic news for the shareholders and their venture capital backers and should provide real encouragement to other London-based tech businesses looking to expand.
‘Many tech start-ups face the challenge of securing early stage investment, but the good news is that angel investors, venture capitalists and private equity houses are all lining up to find the next big thing.
‘American investors are particularly attracted to the UK tech scene, drawn in part by the UK’s favourable corporate tax rates and reliefs. Last year, venture capital investment into Britain’s technology sector from Silicon Valley topped $2.2bn, more than any other European nation.
‘With investor support, firms are able to scale up quickly and expand internationally at an accelerated pace – both of which are key to surviving and thriving in the competitive digital arena.
‘Although the outcome of the imminent EU referendum could of course affect investor sentiment, overall we remain very bullish about the outlook for the UK’s digital economy.’
RSM’s new report on the digital tech sector On the heels of unicorns is now available to download from the RSM website.