The tech sector attracted almost half of the UK’s total equity investment in 2016 as London continued to dominate the landscape for deals.

High-growth tech businesses won 49 per cent of the UK’s total equity investment, according to figures from the British Business Bank’s third annual Small Business Equity Tracker.

Eight London boroughs feature in the top 11 list of local authority areas for equity investment deals, but regional clusters made inroads into the capital’s share of UK deals, which dropped from 50 per cent to 47 per cent.

Hackney London Borough Council topped the list ahead of Camden, Westminster City and City of London, with the majority of money going into software in all these areas.

Cambridge City Council was the highest-placed area outside London in sixth, with Edinburgh City Council and Manchester City Council ninth and equal-tenth respectively.

Manchester

Manchester was in the top 10

Capital boroughs Tower Hamlets, Islington, Lambeth and Southwark also featured in the top 11.

“This research provides the most accurate and complete view of the state of the small business equity finance market in the UK for growing businesses,” said Keith Morgan, CEO at the British Business Bank.

“While the market here followed the global downward trend in equity investment, there are positive signs of innovative growing businesses receiving significant investment in clusters across the UK.

“Regional disparities continue, however, and that’s something we’re working hard to address. We launched our £400m Northern Powerhouse Investment Fund earlier this year, and this is already providing funding to fund managers who are investing in local businesses.

“We will be introducing similar initiatives for the Midlands and Cornwall and the Isles of Scilly over the coming months.”

There was a total of £1.9bn in equity investment made in London last year, representing a drop in total investment value of one per cent. There was a 22 per cent decline in the number of deals that went through in the capital.

Top 10 UK local authority areas for equity investment deals in 2016

  1. Hackney London Borough Council (software)
  2. Camden London Borough Council (software)
  3. Westminster City Council (software)
  4. City of London (software)
  5. Tower Hamlets London Borough Council (business and professional services)
  6. Cambridge City Council (software)
  7. Islington London Borough Council (software)
  8. Lambeth London Borough Council (software)
  9. Edinburgh City Council (business and professional services)
  10. Southwark London Borough Council (business and professional services); and Manchester City Council (software)