6:28 PM 17th February 2021
North Scaleups Finish 2020 With Flurry Of VC Deals
North businesses attracted £102 million in Venture Capital (VC) investment in Q4 of 2020, according to KPMG’s Global Venture Pulse Survey.
The £102 million was raised across 47 deals in the region, representing 12% of all UK deals by volume during the quarter, though only 3% of all UK deal value.
£102m invested in North’s fast growth businesses in Q4 2020
North makes up 12% of all UK deals in Q4, and nearly 3% of all UK deal value
Significant North West investments include the Accelerated Digital Ventures’ backing of Manchester-based Push Doctor and Deepbridge Capital’s investment in Liverpool-based vTime
The most significant investments in the North West during Q4 were Manchester-based GP video consultancy platform Push Doctor securing nearly £18 million in later stage funding led by Accelerated Digital Ventures and Liverpool-headquartered virtual and augmented reality app developer vTime, which received £11.7 million from investors including Deepbridge Capital.
Nisha Sharma, M&A deal advisory for KPMG in the North West, said: “The North’s ability to produce successful, innovative businesses with strong management teams shone throughout 2020, against the most challenging economic background. Late stage deals continued to drive activity as local investors raised their appetite for scaling businesses against the backdrop of a global pandemic.
“Economic challenges will remain, at least for the first half of 2021, so VC investors will continue to be influenced by how consumer behaviours are changing. However, with Brexit now concluded and a world leading vaccine roll out well underway across the UK, we expect strong investment levels, especially for those that have demonstrated robust and resilient business models through the crisis. Management teams who can show they were able to grow and adapt over recent months will be in a strong position when it comes to fundraising in 2021.’’
The report found that 2020 saw £11.7 billion VC investment made into UK scaleup businesses across 1,969 deals.
The UK was the jewel in the European crown for attracting VC investment during Q4 with six of the top 10 largest European deals involving UK scaleups, including digital health business LumiraDx (£282m), Financial software company Molo (£248m) and Bristol based Graphcore (£161m).
London continued to be the main driver behind the level of investments coming into the UK, with four of the top European rounds in terms of size in Q4 2020 invested in London-based companies including Cazoo (£225.3m) and OneTrust (£217.6m). The value of the average deal for a London scaleup rose over 200% in the final quarter of 2020 to an average of £3.6 million.
Bina Mehta, Head of KPMG’s Emerging Giants practice, added: “As the pandemic caused a shift in consumer behaviour, there were big gains for innovative businesses operating in the IT, Healthcare and Consumer Products and Services (B2C) sectors. As it continues, we expect VC investors to continue to be focussed on healthcare, biotech and consumer businesses, which is good news for the UK where we are world leading in these areas.”