Promising start to the year in the tech investment space as £635m injected into the space
Investment in UK technology companies saw a year-on-year increase on 18% in the first quarter of 2015, according to figures compiled by Ascendant Corporate Finance.
The research reveals that £635 million was invested in the UK and Irish technology sector in the first three months of the year – along with the total number of companies being backed increasing by 53% across the same period.
There were 133 deals with values of £.5 million of higher recorded. In March alone there were 53 such deals completed. This is the highest figure recorded in the report since November 2000.
The repot also discusses anecdotal evidence of concerns about a new technology bubble being formed in the UK. However, it falls short claiming that this is the case.
“The simple growth of the market is neither a sufficient nor necessary reason for a bubble. Institutional syndication is still running at just under 40% of deals which is the level it has been for 6 years – no change there,” a section of the report reads.
On the structure of the funding of technology companies in the UK and Ireland the report contains the following paragraph:
“Just over 1/3 of companies raise less than £1m and only just a little over 10% receive rounds of over £10m. Despite the growing level of activity over the last 3 years there has been little movement in this structure. The data suggests that the much “discussed” funding gap is less obvious than many commentators have stated.
“Capital would appear to be available at all levels of the market but naturally reducing at higher amounts. However in real life, these simple statistics do not emphasise the trials of companies’ when raising larger amounts of capital – whilst it is available it is far from easy to access.”
The busiest investors in the sector were Scottish Investment Bank, Enterprise Ireland, Index Ventures, MMC and Par Equity. Private investors participated in almost half (48%) of the deals – while 78% of deals involved more than one investor.
Key findings from the report
· In Q1 2015, £635m was invested in 133 deals of over £0.5m by 152 investors
· The busiest investors were Scottish Investment Bank, Enterprise Ireland, Index Ventures, MMC and Par Equity
· 78% of deals involved more than one investor
· Private investors participated in 48% of deals
· Crowdfunding platforms financed 8% of deals
· US investors participated in 5% of deals, European investors in 8% and Corporate Investors in 11%
· 72 Internet Services companies raised £378m
· 34 Software companies received £140m
· 13 Cleantech companies £85m
· 6 Semiconductor companies £16m
· Another 8 companies who could not be simply categorised, together raised over £16m
· The 10 biggest deals (with disclosed values) received 50% of funds invested, were: World Remit (£65m), Farfetch (£58m), Transferwise (£38m), Blippar (£30m), Green Biologics (£28m), Worldstores (£25m), Ratesetter (£20m), Shazam (£20m), GreenRoad (£17m) and Deliveroo (£17m).
· The most active regions were London and Scotland which were responsible for 50% and 17% of deals respectively
· London’s share of the UK/Irish tech investment amounted 77% of the funds invested in the UK and Ireland
· On a city by city basis, 64 London tech companies received VC, 13 in Edinburgh and 10 in Dublin. All other cities or towns had 5 deals or less deals