By Lisa Walls-Hester on Monday 1 August 2016
Beauhurst has released its latest report, The Deal, H1 2016, which provides a review of investment in UK startups and high-growth companies.
Beauhurst tracks the UK’s private high-growth companies and its latest report covers companies which have raised equity finance to fuel their growth. By tracking equity fundraising activity across the UK it provides information on emerging trends and patterns from the perspective of investors and the businesses themselves.
The full report can be found here, but some of its major findings are:
The picture is somewhat bleak for equity investment in the UK’s high-growth businesses. Deal numbers and investment amounts are both significantly down in the last six months compared to the previous period.
The report said: “This is the first half that we’ve seen crowdfunding figures fall and private equity numbers are at their lowest level since the first half of 2013.”
The quarterly picture is more acute, with deal numbers falling 10 percent and investment falling by 29 percent in the second quarter of 2016.
In H1/16, as ever, the majority of deals were done at the seed stage, while the most money was invested at the growth stage. The amount of investment at the seed stage as a proportion of all investment has been steadily increasing. In H1/16 seed stage investment accounted for 17 percent of the total amount invested, compared with 11 percent a year previously.
In the first half of 2016, crowdfunding platforms continued to be the dominant players in terms of the number of fundraisings facilitated. Crowdcube facilitated the most transactions directly from the crowd to the companies through their platform.
Private Equity and Venture Capital was the most active investor type in the first half of 2016, despite falling deal numbers in raw terms. PE / VC funds were responsible for 201 announced deals, down from a high of 269 in H1/14.
Crowdfunding was the second most active investor type in H1/16 but saw its deal numbers fall for the first time. After ten consecutive halves of growth in deal numbers, the 158 deals completed by crowdfunding platforms in H1/16 fell 17 percent compared with the preceding period.
Although fewer individual investments are being made, the average deal size is growing. Deals of over £10m was the only investment bracket to increase in frequency, whilst investments under £250k declined by almost a third.