By Daniel Lanyon on Friday 2 August 2019
Record totals of VC investment in H1 raise expectations for a bumper year for UK tech funding.
UK venture capital is in rude health. Despite a maelstrom of uncertainty, a changing of the political guard and an increasing likelihood of ‘a no-deal Brexit’ the UK is set for a record year of VC activity, according to a new a report.
The report, from White Star Capital, reveals following a decline to $5.4bn in 2018 from record heights of $5.8bn experienced in 2017, this year is set to hit a new high. The total amount of funding secured by UK technology companies has already hit $4.9bn, accounting for 85 per cent of 2017’s funding and twice the amount of capital secured during the first six months of 2018.
The fintech boom is driving much of this growth and continues to lead the way, attracting 22 per cent of all UK VC deals to date in 2019. Artificial intelligence got 15 per cent of the deals this year and digital health and e-commerce sectors both posting 4 per cent.
The UK also continues to outpace the rest of Europe, with UK venture capital totalling 63 per cent of European-wide deal values during the first six months.
Much of this is being driven by the rise in ‘mega-rounds’ of over $ 100m, with the UK consistently representing more than a third of all of Europe’s mega-rounds.
However, 81 per cent of all mega-rounds in the UK have been led by international investors, perhaps demonstrating a missed opportunity for UK venture capitalists.
With pound low by historical standards, it is cheaper for foreign investors to commit their dollars or euros into Sterling assets.
The report also said that UK founders from the top 10 universities by capital raised have attracted over $23bn, with Cambridge and Oxford the leading producers of entrepreneurs in the UK.
Nicholas Stocks, General Partner at White Star Capital, added: “The UK’s reputation as a global hub for financial services continues to grow and it is maintaining its influence in a number of other large markets, particularly the US. The nation’s future success will rely on regulation that encourages business growth, greater investment in education and research, along with further support for the tech sector.