Corporates have injected £102bn into UK start-ups over the last four years
Figure has risen significantly from the £62bn invested between 2013 and 2016, with the majority of deals mergers & acquisitions
Around £102bn has been invested into the UK start-up community by large organisations since April 2013, according to research from law firm Bond Dickinson.
The research took into account 5,447 mergers & acquisitions (M&As), joint ventures and minority stakes between domestic or international corporates over the last four years. The majority (55%) were M&As, 44% were minority stakes and fewer than 1% were joint ventures.
The figure is a significant increase on the £62bn corporates injected into UK research and development in the four years between 2013 and 2016 and accounts for more than 14% of the £683bn total UK business investment over the period.
The number of large deals between start-ups and corporates increased from 1,326 in the 2013/14 tax year to a peak of 1,536 between 2015 and 2016. It then dropped by 28% to 1,111 in 2016/17.
The announcement comes after business investment declined by 1.5% in 2016. This was the first contraction since 2009 and has continued to lag behind the recovery of GDP in 2017.
David Dale, head of private wealth and entrepreneurs sub-sector at Bond Dickinson, commented:
“Start-ups are often perfectly designed to develop new ideas, but they typically lack the market reach, regulatory pathways and financial muscle to achieve their full potential. Corporates, on the other hand, struggle to turn their R&D investment into innovation from within. The combination of the two is a powerful one.
“However, negotiating partnerships for successful collaborative innovation involves balancing a number of difficult elements. There is a way to make a collaboration work for both parties, but the recent dip in deals is a nudge to ambitious entrepreneurs to assess their business strategy and ensure their company is an attractive option.”
Discover which large organisations offer the best collaboration opportunities for start-ups in our index of Europe’s 25 Corporate Startup Stars.