London VCs lead way for spotting tech unicorns early

London-based venture capital (VC) firms have come out on top for their ability to spot and invest in technology unicorns at an early stage across Europe, the Middle East and Africa.

In an industry often dominated by the US, London-headquartered VC firm LocalGlobe has been identified as the VC backing the most startups at the seed or Series A stage that went on to achieve valuations of $1bn or more.

That’s according to data compiled by startup intelligence company Dealroom, which said using this metric instead of total investment size can make it possible to compare firms on a “level playing field”.

LocalGlobe, which has invested in the likes of fintech giant Wise and insurtech Zego, came out on top at the seed stage, as well as for seed and Series A combined.

Meanwhile, London-based Seedcamp was identified as the second-best at spotting unicorns at the seed stage of investment.

London-based Balderton Capital also featured on the top unicorn hunter list.

US-based VCs Accel and Index Ventures were the first and second most successful at backing future unicorns at the Series A stage.

The data is based on last year’s record levels of VC investment. The firms in Dealroom’s top 10 unicorn investors made a combined 406 investments at the early stage last year.

In 2021, VCs invested $138.6bn in tech companies across EMEA – more than double the amount in 2020.

Separate research has previously shown that last year London tech startups raised a record $25.5bn (£18.55bn), making it the fourth-highest city for VC investment globally.