Venture Capital investing in the UK reaches $1.3bn in the last quarter of 2015, bucking global trends

Madeline Ratcliffe
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Venture Capital firms invested $1.3bn (£910m) in UK companies in the last three months of 2015, capping off a record-breaking year.

In total, UK start-ups received $4.75bn in venture capital funding last year from 400 deals, according to the latest data from KPMG and venture capital database CB Insights.

This bucked the global trend: there was a 30 per cent reduction in venture capital activity in the fourth quarter, down to $27.2bn. It recorded the lowest quarterly activity since the beginning of 2013.

The UK accounted for 43 per cent of all venture capital activity in Europe in the last quarter, with 113 deals.

Tech continued to dominate both the UK and European investment landscape, accounting for two thirds of all deals to European VC-backed companies in Q4.

Some of the biggest fundraising rounds included Deliveroo's $100m Series D investment and the $83m raised by fintech specialist, Ebury Partners.

Patrick Imbach, head of KPMG’s high tech growth team, said tech companies were still dominating the investment scene: “Investment in the UK’s burgeoning technology sector has increased over the course of 2015 to record levels. Not only is this is an indication of the sheer quality of investment opportunities in the UK, but also symptomatic of the fact that valuations here are still perceived to be moderate when compared to the valuations of their sector counterparts in the US and Asia.”

He added that low interest rates and larger companies looking to invest in new technologies will ensure investment in the sector continues.

The reduction in funding in the fourth quarter was especially marked in Asia, where there was a 32 per cent drop in investment from the previous three months, down to $9.7bn.

Ben McDonald, head of KPMG Enterprise in the UK, said: “The slowdown in venture capital funding activity seen globally does provide us with something of a slight reality check. With a number of IPOs falling short of recent private valuations in the US and other investors re-evaluating and writing down some of their investment portfolios, venture capital investor confidence has clearly been rattled.”

​Nevertheless, 2015 was still a strong year with global venture capital funding hitting an all-time high of $128.5bn, up 44 percent on 2014’s total of $89.4bn.

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