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Equity Venture and Crowd Funding to UK Companies Hits High Note

07 Aug 17

Investment in UK non-listed high-growth companies reached a record high according to Beauhurst research (The Deal: Equity investment in the UK H1 2017). Improbable and FarFetch were the biggest winners each enjoying deals worth above £300m.

The data indicates there were around 750 deals representing £30b in investment funding. Interestingly deal numbers are not increasing with any significance but a few large investments have pushed up the value of funds invested.

Beauhurst’s report highlights that:

  • “The record amount invested was boosted by two of the biggest deals on record, £389m for Improbable and £313 for FarFetch.”
  • “The number of deals involving funds headquartered outside the UK continued to grow, rising by 26.7% from the previous quarter.”
  • “Crowdfunding deal numbers fell by 18.4% from Q1 to Q2, with £48m invested over 71 deals.”

Improbable is developing cloud computing technology supporting large scale virtual reality, with applications for gaming, defence, transportation, health and finance.”

FarFetch is a global online marketplace for independent fashion boutiques as well as major designer brands. The site has clothing for both men and women.”

It’s good news that there was an increase in funding from outside the UK but the drop in Crowdfunding in Q2 is a worry and could reflect post-election caution.

Government Funding Dropped Back

Charts in the report indicate that Government funding was pretty static following a boost in the first half of 2012 when investment reached around £125m up the end of 2015. Since then it has reduced in each half year period to the half year ended 30th June 2017, with around £75m invested in the first half of 2017.

Crowd Funding Remains Static

in the half year covered - the top Crowdfunding investors in term of Deal Numbers were, by a long margin Crowdcube (56 deals) and Seedrs (64 deals) compared to SyndicateRoom at 19 deals (figures based on Beauhurst methodology). However Crowedcube invested more than double what Seedrs invested at £23m compared to £9.3m.

Crowdfunding investments in total reached around £150m as compared to Private Equity/Venture Capital investment at around £270m.

Seed Deals More Frequent

As would be expected, there were far more deals done with Seed companies, 46% of deals and 13% of the funding, while Growth companies represented 17% of deals and 61% of the funding. Around 170 deals were for funding of less than £500k.

Where is the Money Going?

More deals went to the South West (38) than went to Scotland (33) but London far exceeded everywhere else with 356 deals – that’s an average of two per day, followed by the South East (57) and the East of England (44).  

The report is packed with valuable and interesting data, all easy to digest as most if it is presented as graphs and charts - download the full report here.

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Linda Eziquiel is a Fellow of the Institute for Independent Business and a Principal Consultant at RandDTax (specialists in Research and Development tax credits) – UK co. reg. no. 08160439.

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