More than £175m VC investment secured by Northern scaleups in Q1

Wing Chan and Shiran Zheng, co-founders of Sourceful

More than £175m of venture capital investment has been injected into the North’s fast growth businesses in Q1 2022.

That’s according to KPMG’s latest Venture Pulse Survey which revealed the North saw 65 deals taking place in January through to March, with the largest type of financing deal in the North being early-stage VC.

Some of the most significant investments in the North West in Q1 include Chester-based Oxbury, a commercial bank focusing on agriculture who raised £31 million, Manchester-based Sourceful, operators of a supply chain and sourcing platform, who raised almost £16m, and Relative Insight, developers of a comparative text analysis platform from Lancaster, who raised £5m.

Nationally fast-growth businesses in the UK continue to attract huge volumes of VC investment, despite the uncertain geopolitical and macroeconomic environment.

UK scaleups saw 745 deals completed in the first three months of this year, raising over £6.9bn, including the $1 billion megadeal for Checkout.com.

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.

Warren Middleton, lead partner for KPMG’s Emerging Giant Centre of Excellence said:  “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.”

He added: “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.”

The latest figures come after KPMG launched its search for the UK’s next top tech innovator.

KPMG is looking for North West scaleups 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.

Nisha Sharma, M&A director at KPMG in the North West, said: “We are still seeing a fantastic range of businesses attract huge investments here in the North West. From digital banks to innovative ESG-focused disruptors, businesses in the North West are leading the way on new ideas to challenge the norm.

“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 North West scaleup who fits the bill, they should be applying to our competition as a platform to demonstrate the uniqueness of their proposition. Who knows, we might find another unicorn.”

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