(Victoria Jones/PA)
(Picture: PA Wire)London’s top-10 listed tech firms lost a combined £20 billion in value since the beginning of last year, an Evening Standard analysis has found, as soaring inflation, rising interest rates and stagnant economic growth took their toll on tech sector valuations.
Takeaway app Just Eat was among the hardest-hit of the UK’s tech stocks, losing around £4.8 billion from its market value, while rival Deliveroo lost around £1.9 billion and cybersecurity business Darktrace lost just shy of £2 billion.
The roughly 20% drop in value of the UK’s top-10 biggest tech stocks stands in stark contrast to the FTSE 100 as a whole, which has fallen little more than 1% since January 2022. However, the fall is more modest compared to the sharper drops for their bigger US counterparts, with the Nasdaq-100 technology sector index down 36% over the same period.
A number of firms have been forced to slash the size of their workforce in a bid to cut costs and stay afloat, with online car retailer Cazoo sacking 750 staff in the summer and crypto unicorn Blockchain.com firing 150 workers. There have been around 5,000 layoffs at London tech firms since the start of the pandemic, according to tracking website laypoffs.fyi.
Lan Yue, founder and COO of crypto exchange BIT, said: “There’s no doubt that it was the end to loose money that set the house of cards falling.
“For European firms, the pain may have only just begun. Inflation in the UK and across the Eurozone is still heading in the wrong direction and the ECB is way behind the hawkish Fed.
“Fintech is also on its knees. Average deal prices are down by a third and there are now more donkeys than unicorns. Venture capitalists - who ploughed $150 billion into the sector in 2021 - are now putting their hard-won cash anywhere but.”
Plummeting valuations may be even more pronounced for London’s private tech companies. Payments company Checkout.com slashed its internal valuation to $11 billion last month, the Financial Times reported – well below the $40 billion valuation it had secured from investors in January. A similar-sized fall across London’s top-10 biggest private fintechs would lead to a combined £72 billion being wiped from their value.
