£241m in investments secured by fast growth businesses
Scaleups in the Midlands have secured more than £241m in venture capital investments in Q3 of 2021.
According to KPMG’s latest Venture Pulse Servey, the finances were raised across 27 deals from July to September and were split between early-stage (37%), later stage (22%), angel (19%%) and seed round (22%).
Significant investments include Birmingham-based Onto, developers of an electric car subscription platform which raised £180m. Easol from Walsall, another developer of business software raised £17m and regenerative medicine platform developers Locate Bio from Nottingham raised £12m.
Stuart Pilgrim, head of TMT M&A at KPMG in the Midlands said: “Businesses across the Midlands have shown great resilience and innovation to not only survive the pandemic but to also attract this much investment.
“It’s clear that tech and tech-enabled businesses are very appealing to investors, and I expect this to continue for the foreseeable, especially as our region is home to lots of high-quality scaleups.”
A record high of more than £6.5bn was invested by VC in UK scaleups this summer.
Following two high quarters in 2021, KMPG’s Venture Pulse report found that UK scaleups continued to attract funding from across the globe, with investors prepared to pay premium prices for strong UK innovators.
Later stage deals involving well established scaleup businesses took the bulk of funding from VC investors, but seed deal value remained steady. More than £290 million was invested in the UK at seed level over Q3 2021, a slight decline from the record levels of investment seen in the first half of the year.
Corporate Venture Capital (CVC) investment in UK innovators also reached a new high of £2.8bn in Q3 2021, a 9% increase in value from Q2 of 2021.
Bina Mehta, Chair of KPMG UK and Head of the firm’s UK Emerging Giants Centre of Excellence said: “The strength of the UK innovation brand is flying high with areas such as artificial intelligence (“AI”), cybersecurity and FinTech attracting interest and finance from greater numbers of new players to the UK market, driving up valuations for our most sought-after innovators.
“Our recent CEO survey found that disruptive technology was cited as the biggest threat to large corporates, so it is unsurprising that in order to accelerate their digital transformation or boost their digital capabilities, many are now partnering with, investing in, or acquiring innovative scale-up businesses.”
