Venture capital investment in UK start-ups soars in 2017

After a late 2016 slump, venture capital (VC) investment into UK start-ups rose significantly in the first quarter of the new year, according to KPMG’s quarterly Venture Pulse report.

In total, more than £804m was injected into UK companies in Q1 2017 and although the number of deals dropped by 10% to 196, they were generally larger, later-stage deals. The biotech and life sciences sectors proved particularly attractive to investors in the UK.

The news is thought to be a sign that the UK’s enterprise space remains attractive to investors despite concerns that leaving the European Union would be damaging for the technology sector. In a recent blog post for Startups.co.uk, Forward Partners founder Nic Brisbourne advised founders to “keep calm and carry on” in the face of Brexit uncertainty.

Funding Circle secured two of the biggest rounds of the year so far, landing £80m just one week after it secured £40m from the government-owned British Business Bank. Currencycloud also closed a major £20m Series D in March.

There was a 13% surge in global VC investment to $27bn, while investment in Europe remained at a similar level to the previous quarter at $3.4bn. Deal volume declined in both cases.

Patrick Imbach, co-head of tech growth at KPMG, commented: “UK VC investment activity is at robust levels and this should be a cause for optimism in 2017.

“We’ve seen very strong fundraising from Currencycloud, Funding Circle and Atlas Genetics. Tech giants are also clearly confident in post-Brexit Britain with Apple and Snap having chosen London for their international headquarters.

“The foreign exchange rate post-Brexit encouraged an increase in US VC participation, and this trend has continued to grow.”