Fast-growth businesses in the UK continue to attract huge volumes of Venture Capital (VC) investment, despite the uncertain geopolitical and macroeconomic environment, according to new figures released by KPMG.
UK scaleups saw 745 deals completed in the first three months of this year, raising over £6.9 billion ($9 billion), including the $1 billion megadeal for Checkout.com, according to KPMG’s Global Venture Pulse survey.
The report found that a major convergence of factors has helped to continue to energise the UK’s VC market, including a rise in corporate backed VC, private equity funds looking for better returns, and increasing fundraising focused on earlier stage companies in order to achieve higher returns.
Whilst the bulk of VC investment continues to flow into London (£5.2/$6.8 billion), the rest of the UK saw buoyant levels of VC investment, with over £1.7 billion ($2.2 billion) invested across 334 deals, according to the data compiled by PitchBook. VC investment in UK innovators based outside of London has more than doubled since the pandemic (+59% from £3.3 billion invested in 2019). Standout deals completed in the first quarter of the year included the £142 million raise by Nottingham-based Oakbrook Finance, the £94million Series C raise by Edinburgh games developer Everywhere and the £51 million Series B funding for Cambridge-based biotech Microbiotica.
CVC-affiliated investment into UK scaleup businesses accelerated in the opening quarter of this year, accounting for half of the deals closed in Q122 (£3.4/$4.5billion from 133 deals). With disruptive technology, digitisation and innovation continuing to dominate boardroom priorities following the pandemic, CVC-affiliated investment in fast growth businesses is expected to grow throughout 2022.
