The UK is set for a record year of venture capital activity despite the ever-present spectre of uncertainty over Brexit, transatlantic VC firm White Star Capital believes.
UK tech companies have already attracted a massive $4.9bn of venture capital funding in the first half of the year – putting it within touching distance of 2017’s $5.8bn record with six full months of the year to go according to data from CB Insights.
UK VC investment in H1 represented almost two-thirds of European deal value so far this year, much of which was driven by the rise in ‘mega’ rounds of more than $100m.
White Star said that more than 80 per cent of all ‘mega’ rounds in the UK were led by international investors, perhaps demonstrating a missed opportunity for UK venture capitalists.
The burgeoning FinTech sector continuing to lead the way, the report added, with the segment representing more than one in five of all UK VC deals to date in 2019.
Artificial intelligence reached 15 per cent of deals, and the digital health and e-commerce sectors both posted four per cent.
White Star cited the wealth of talent coming out of the UK’s top universities as a key factor in the continued robustness of the UK startup ecosystem.
Half of the founders of the 17 unicorns in the UK attended UK universities, with founder from the top 10 UK universities having attracted more than $23bn of capital.
White Star managing partner Eric Martineau-Fortin said, “From day one, it was crucial for White Star to have a significant presence in the UK, as it has long been the European capital of venture funding.
“In recent years, the UK has subsequently strengthened its position as a global leader in attracting VC investment and this report delivers a vote of confidence in the UK’s fast-growing businesses and the wider ecosystem during a crucial period for the nation.”
Nicholas Stocks, general partner at White Star, added, “The UK’s reputation as a global hub for financial services continues to grow and it is maintaining its influence in a number of other large markets, particularly the US.
“The nation’s future success will rely on regulation that encourages business growth, greater investment in education and research, along with further support for the tech sector.
“Our report addresses how the UK is likely to be affected by leaving the EU, as we consider how the nation can continue to attract major international companies and boost later-stage funding for the most innovative, homegrown firms.
“The key word is ‘talent’ – as nurturing and investing in tomorrow’s entrepreneurs will help to ensure that the UK can consolidate its position on the global stage.”
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