Cause for optimism for UK's venture capital market, says GlobalData
Start-ups can look to a promising outlook for the UK's venture capital market, according to GlobalData - the analytics group.
In the first half of this year, small firms have secured US$7.7 billion in venture capital (VC) funding across 586 deals, the database showed - a 2.8% year-on-year (YoY) increase in value despite there being a 17.8% drop in the number of deals.
READ MORE: Bristol's Empirical Ventures looking to invest in UK's most innovative deeptech start-ups
In the first half of 2023, there were 725 VC deals worth US$7.5 billion.
"The decrease in VC deal volume has not affected the overall funding value, indicating that while VC firms are exercising caution, they are still willing to make significant investments in promising startups," said Aurojyoti Bose, lead analyst at GlobalData.
"This trend is also evident in other major markets, where total funding value has increased despite a drop in the number of deals," he added.
The upbeat mood has been evident across the south west and south east regions this year. In April, Bristol-based Empirical Ventures revealed it was aiming to build a £10 million fund to invest in UK early-stage deep science start-ups.
It has already invested in 18 companies across various technologies, including startups like BaseImmune, Anaphite, CheMastery, Wase, Ensilicated Technologies, and QV Bioelectronics.
Two months earlier, Giant Ventures launched two new funds totalling US$250 million to invest in technology founders.
A US$100 million seed fund will back 25 early-stage companies, while a US$150 million climate-focused growth fund fills a major Series B funding gap - providing capital to climate technology companies, it said.
GlobalData also revealed that apart from being the top European market, the UK is also a key global market for VC funding. The UK accounted for 7.3% share of the total number of VC funding deals announced globally during the first half this year.
Bose noted: "The improvement in terms of value registered in the UK could be attributed to announcement of some big-ticket deals during H1 2024.
"In fact, the UK was also among the very few countries that witnessed the announcement of some billion-dollar VC deals during the review period."
Some of the notable VC funding deals announced in the UK during H1 2024 include US$1.05 billion worth of funding raised by Wayve Technologies and US$1 billion raised by Abound.
"The steady growth in VC funding value despite fewer deals highlights investor confidence. Significant investments in promising startups reflect cautious optimism," concluded Bose.
"GlobalData anticipates sustained or increased funding, especially in innovative sectors, solidifying the UK’s position as a key global venture capital hub despite potential fluctuations in deal volume."
