£635 Million Invested In GB Start-Ups in First QTR 2015

Recent figures released by Ascendant Corporate Finance have shown that during Q1 of 2015, there has been a year-on-year increase of 18% of investment in UK technology companies. The report states that 133 of the investment deals that took place were each worth a value of £.5 million or higher. March saw the highest number of such deals taking place, with the report stating that it saw 53 deals, the highest amount for nearly 15 years.

Deeper analysis of the figures shows that £635 million was invested into Great Britain’s tech sector. This staggering amount was invested in just the first three months of 2015. The report shows that the amount of backing received by companies has also increased, by 53%, during the same three months.

When quantified by region, the region that received the most action was London, where 64 tech firms received venture capital investment, which accounts for 77% of the funds invested in the GB technology sector. Scotland was the next region to receive the most deals, with 13 being conducted in Edinburgh. Dublin received 10 deals, whilst all other GB cities or towns accounted for 5 deals or less.

The report addressed concerns of a new technology bubble being developed: “The simple growth of the market is neither a sufficient nor necessary reason for a bubble.  Institutional syndication is still running at just under 40% of deals which is the level it has been for 6 years – no change there”.

When addressing the structure of funding of technology companies, the report commented that there had not been much movement, even though activity levels had been growing. It stated that “just over 1/3 of companies raise less than £1m and only just a little over 10% receive rounds of over £10m.”

Many have commented on the issues of a funding gap between the different levels of tech companies in the UK, however, Ascendant Corporate Finance’s report advises the funding gap is not as noticeable as others have suggested: “Capital would appear to be available at all levels of the market but naturally reducing at higher amounts.” However, the report recognises that, despite what statistics suggest, the reality of securing large amounts of capital is “far from easy to access.”

Summary of the report’s key findings:

– Scottish Investment Bank, Enterprise Ireland, Index Ventures, MMC and Par Equity were the busiest investors during Q1 of 2015.

– 5% of deals involved US investors, 8% European and 11% Corporate Investors.

– 48% of deals were participated in by private investors, with 78% of deals involving more than one investor.

– 8% of deals were financed by crowd funding platforms.

– Breakdown of funds raised: £378 million by 72 internet services companies, £140 million by 34 Software companies, £85 million by 13 Cleantech companies and £16 million by 6 Semiconductor companies, and £16 million was raised by an additional 8 companies, which the report does not categorise.

Of the deals that have been disclosed, the 10 largest were:

  • World Remit (£65m)
  • Farfetch (£58m)
  • Transferwise (£38m)
  • Blippar (£30m)
  • Green Biologics (£28m)
  • Worldstores (£25m)
  • Ratesetter (£20m)
  • Shazam (£20m)
  • GreenRoad (£17m)
  • Deliveroo (£17m)