business

More Than £175m In Investment In Q1 2022 Secure By Northern Scaleups

Image by Markus Winkler from Pixabay

Businesses in the North attracted more than £175 million in Venture Capital (VC) investment in Q1 2022, according to KPMG’s latest Venture Pulse Survey.

The money was raised across 65 deals in the region, with the largest type of financing deal in the North being early-stage VC.

Some of the most significant investments in Yorkshire and the Humber in Q1 include fact checking platform Logically from Brighouse who raised £22.6 million, Radar Healthcare from Leeds who raised £6.4 million and vegan food producers VFC Foods from York who raised £8.2 million.

The latest figures come after KPMG launched its search for the UK’s next top tech innovator. KPMG is looking for scaleups in Yorkshire and the Humber to compete in its annual competition which looks to uncover future tech titans from across the UK who will go on to represent the best of British on a global stage.

The competition is open to scaleup businesses from early-stage to accelerated growth, who are being invited to pitch their innovations and present their growth ambitions to panels of local and global industry experts. Initial heats will be taking place on a regional basis to find a final shortlist of innovators – representing the best innovation from across the UK.

Ben Taylor, head of technology M&A at KPMG in Yorkshire & the Humber, commented:

“We are still seeing a fantastic range of businesses attract huge investments in Yorkshire and the Humber. From healthtech to plant-based food products, businesses in the region are leading the way on new ideas to disrupt the market.

“That’s why we hold our Tech Innovator competition each year, to showcase the incredible, innovative businesses we have in the region. If you know of a scaleup in Yorkshire and the Humber who fits the bill, they should be applying to our competition.”

National picture

Fast-growth businesses in the UK continue to attract huge volumes of Venture Capital (VC) investment, despite the uncertain geopolitical and macroeconomic environment, according to new figures released by KPMG.

UK scaleups saw 745 deals completed in the first three months of this year, raising over £6.9 billion ($9 billion), including the $1 billion megadeal for Checkout.com, according to KPMG’s Global Venture Pulse survey.

The report found that a major convergence of factors has helped to continue to energise the UK’s VC market, including a rise in corporate backed VC, private equity funds looking for better returns, and increasing fundraising focused on earlier stage companies in order to achieve higher returns.

Whilst the bulk of VC investment continues to flow into London (£5.2/$6.8 billion), the rest of the UK saw buoyant levels of VC investment, with over £1.7 billion ($2.2 billion) invested across 334 deals, according to the data compiled by PitchBook. VC investment in UK innovators based outside of London has more than doubled since the pandemic (+59% from £3.3 billion invested in 2019). Standout deals completed in the first quarter of the year included the £142 million raise by Nottingham-based Oakbrook Finance, the £94million Series C raise by Edinburgh games developer Everywhere and the £51 million Series B funding for Cambridge-based biotech Microbiotica.

CVC-affiliated investment into UK scaleup businesses accelerated in the opening quarter of this year, accounting for half of the deals closed in Q122 (£3.4/$4.5billion from 133 deals). With disruptive technology, digitisation and innovation continuing to dominate boardroom priorities following the pandemic, CVC-affiliated investment in fast growth businesses is expected to grow throughout 2022.

Warren Middleton

Warren Middleton, lead partner for KPMG’s Emerging Giant Centre of Excellence commented:

“Despite concerns around the uncertainty in the economy, and with interest rates rising, the UK continues to demonstrate resilience and adaptability in attracting VC investment and is the jewel in the crown for innovation in Europe. Fintech, B2B-focused services and healthtech remain top areas of investment, while interest in cybersecurity and defence-focused solutions grew considerably in the opening months of the year.

“Fintech remains a very hot area of investment as the payments space has continued to grow. Buy-now-pay-later (BNPL) has become very attractive in the eyes of investors – not only direct BNPL companies but also other businesses diversifying into offering BNPL options. Recently, the FCA announced its intent to regulate the space in the near future, which could drive consolidation in the space moving forward.

“The power of our disruptive businesses to deliver impact on a global scale is more important than it’s ever been, and our UK innovators are a real success story. The diversity of the UK scaleup ecosystem and our ability to nurture growing networks in cities up and down the country is playing an increasing role in our success in attracting global VC investment. It’s great to see large investments being made in key hubs such as the Midlands, North and Scotland in addition to the powerhouse of London. Continuing to nurture fast growth businesses is an important part of our levelling up agenda to help regions develop their own infrastructure to support growth, investment and employment.