Steep drop in North West venture capital investment in final quarter of 2024
A total of £74.4m of venture capital (VC) investment was raised by North West businesses in the fourth quarter of 2024, between October and December – down 70% from £251.4m in the previous quarter, according to KPMG’s latest Venture Pulse report.
While overall funding fell, the volume of transactions increased quarter-on-quarter with 28 transactions completed in Q4, up from 26 in Q3.
Businesses in Manchester contributed the largest share of funding raised in 2024, supported by some large investments in life sciences start-ups.
This includes an £80.3m funding round into Manchester-based biotech drug developer F2G in Q3, and £34.1m from an early-stage VC investment into biotech firm Ascend in Q4.
The North West also saw ample investment into its IT businesses with 13 firms raising a total of £25.4m. This comes after the region’s businesses cited AI, cyber security and digital transformation as key focuses for 2025.
The sustained levels of VC investment reflect cautious optimism among business owners, with recent data from KPMG’s KPE Barometer revealing that more than a quarter of the North West’s private business owners see venture capital as a means to finance business diversification this year.
Chris Stott, Manchester Office Senior Partner at KPMG, said: “The North West continues to be a hotbed for venture capital investment.
“Manchester, in particular, is demonstrating its position as the UK’s leading technology hub outside of London through this latest raft of investment.”
He added: “It’s encouraging to see 2024 end on a high note when it comes to the volume of VC deals completed in the North West.
“Despite a slower start to the year, and challenges within the broader economy, the investor community remains active. The quality of scaling businesses in the region is as strong as ever and with investors remaining supportive and standing ready to inject capital into the most innovative companies.”
Nationally, the UK attracted the highest level of VC investment in Europe in 2024, following a strong end to the year.
The UK raised a total of £15.5bn VC investment after funding in Q4 jumped by more than a third from £3.1bn to £4.4bn.
This was driven largely by $1.3bn raised by Greenscale, a London-based AI data centre firm.
A total of 569 businesses made up the £4.4bn investment, including £409m raised by Insider and £303m raised by Lighthouse.
These results come just weeks after KPMG published its first ever KPE Barometer, which revealed that more than 90% of Britain’s private business owners are confident of growth in 2025.
Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, said: “After a difficult Q3, it’s great to see the UK end the year as the top destination in Europe for VC investment.
“The strong rebound in Q4 has boosted optimism among investors looking ahead to the rest of 2025, with AI likely to remain at the forefront of those looking to invest.
“However, the impact of both global and domestic events such as the UK Budget measures and the new US President taking office, could still contribute to a level of investor caution.”
