The Global Financial Crisis helped spawn the creation of London’s tech start-up ecosystem, which was dubbed “Silicon Roundabout” as a joke in 2008.

Since then, more than 35,000 tech businesses have been created in the UK, according to a recent report from Tech Nation and Dealroom.co.

Despite challenging macroeconomic conditions, the UK venture capital market has the foundation to emerge strongly from the coronavirus crisis, the report argues.

The UK venture market is unlikely in 2020 to come close to reaching its 2019 record funding of $14.2 billion, but despite an economic slowdown the region has already closed on $5.3 billion in VC investing since the start of the year. This amount is more than half of $9.8 billion in venture capital the country received in 2018.

In the first five months of 2020, London-based tech companies raised $4 billion in venture capital, which is more than Paris, Stockholm, Berlin and Tel Aviv combined. 

Fintech grabbed the biggest percentage of London’s VC funding during the year so far. The sector received 39 percent of all venture dollars in the capital city. Enterprise software sector captured about a fifth of all VC dollars invested in London from January through May.

While UK VCs have record levels of dry powder available for deployment in 2020 and beyond, 64 percent of this year’s VC funding came from investors based in North America, Asia and the rest of Europe. The report argues that a high percentage of foreign investment implies that UK’s VC landscape is diversified for resilience. 

Despite some positive signs, a recent survey of 200 VC-backed UK companies found that 40 percent of start-ups assess their cash runway at less than a year and 68 percent of respondents expect their 2020 revenues to drop by more than 25 percent compared to the forecast prior to the pandemic.

About 24 percent of UK’s start-ups will be positively impacted by the pandemic, the report estimates. These include 1,731 companies in digital health, food delivery, gaming and dating sectors.  

Many of the most successful UK-based VC-backed companies were created during or right after the last financial crisis. These companies include TransferWise, a money transfer service for expats, which has raised $360 million and was valued at $3.5 billion in May 2019, and Farfetch an online luxury fashion marketplace, which went public in September 2018 at a market capitalization of $5.8 billion.  

The current downturn may similarly create leading companies.