🇬🇧 UK VC investment slumps to lowest since Brexit 👇
The amount of venture capital investment in the UK slumped 45 per cent in 2023.
The data was revealed in KPMG’s quarterly Venture Pulse report, which showed that VC investment sank to its lowest levels since 2016, just after the Brexit vote “amidst a backdrop of geopolitical and macroeconomic challenges and a parched exit environment.”
According to the data, the value of VC investment across the UK fell from $36.8bn (£29.1bn) across 3,832 deals in 2022 to $20.3bn (£16bn) across 2,658 deals in 2023.
Businesses based in the capital accounted for five of the 10 largest European fundraises in the final quarter of 2023, including the $1bn (£760m) raised by communications firm DAZN, while the $179.7m (£142m) raise by Manchester-based Castore also made it to the top 10 largest deals in Europe.
Nicole Lowe, UK head of KPMG UK’s emerging giants practice, said: “Fast growth businesses in the UK have been fairly resilient to the global downturn in VC investment, with fundraising levels continuing on a positive trajectory, and above pre-pandemic years.
“Whilst there is a real craving for normalcy and a period of stability this year to help boost the environment for fundraising, it is unlikely that the conditions improve much over the next 12 months.
“With the headwinds remaining challenging, UK businesses looking to raise funds will need to ensure they have really strong business models and management teams in order to attract VC investment.
“Given the global economic climate, VC is shifting from a ‘growth at all costs’ model to prioritising innovative companies with robust unit economics.
“This new focus on strong gross margins and effective customer acquisition strategies underscores a balanced approach in risk management and value creation, favouring sustainable growth and financial stability over rapid cash burn and scale.”
Jon Robinson with the story ✍
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