Saturday, July 13, 2024

Late-stage ‘megarounds’ drive UK VC investment growth

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VC investment in the UK is showing signs of recovery, boosted by large late-stage rounds to rise 16% in 2024 and maintain its leading position in Europe.

Data from startup funding tracker Dealroom has shown solid growth in VC investments in the UK, with startups and scaleups raising £7.4bn in the first half of the year.

The UK has been the top destination in Europe for tech investment for some time now, with the most recent data showing it made up around a third of total European VC funding in 2024.

This growth comes off the back of two years of decline in VC investment, suggesting confidence is returning in British enterprise.

Dealroom said British tech companies this year raised more than France and Germany combined and five times more than Switzerland. UK funding figures were heavily dominated by large later-stage rounds.

Notable so-called ‘megarounds’ – venture funding rounds of $100m or more – for UK tech firms this year include Wayve’s £840m Series C and Monzo’s £340m late-stage investment.

It comes as separate data, published today by the British Business Bank, found that the UK has secured third place for VC funding globally when looking across all sectors.

In the state-owned development bank’s annual Small Business Equity Tracker, the UK overtook India as the third largest VC market, accounting for 6% of global investment between 2021 and 2023.

“As has been the case globally, 2023 was a tough year for the UK equity finance market,” said British Business Bank CEO Louis Taylor.

“However, despite the continued challenges of higher interest rates and fewer exit opportunities, it is encouraging that investment now looks to be stabilising at over £2bn per quarter for smaller businesses.”

Research published last week found that in tech specifically, the UK had overtaken China to become the world’s second-highest funded ecosystem behind the US.

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