What Brexit: Venture capital investment in UK startups is up and the future "optimistic"

 
Lynsey Barber
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VC investment in the UK remains "robust" (Source: Getty)

Britain has apparently shaken off the Brexit vote, with fresh figures revealing a rise in investment from venture capitalists.

It helps ease concerns that leaving the EU will make the UK an unattractive place to invest and potentially torpedo the technology sector.

More than $1bn (£804m) was ploughed into startups in the first quarter of 2017 after falling below that mark at the end of 2016, according to KPMG's quarterly Venture Pulse report.

Read more: The UK's tech entrepreneurs have finally recovered from the Brexit shock

Investors plumped for bigger later-stage deals, however, with the number of deals falling 10 per cent to 196, as they looked for less risky businesses.

“UK VC investment activity is at robust levels and this should be a cause for optimism in 2017," said KPMG's co-head of tech growth Patrick Imbach.

"It’s clear that, despite a dynamic political and economic environment, capital remains available for those UK startups that are able to articulate and demonstrate their value proposition."

Globally, VC investment surged 13 per cent to $27bn and deal volume fell indicating a similar cautious feeling, while in Europe the $3.4bn in investment was largely flat on the previous quarter and deal volume was also down.

Biotech and life sciences in particular were attractive in the UK, while Currencycloud landing £20m from investors such as Google, and Funding Circle's £82m raise were both stand-out deals to kick off the year.

Read more: Three crucial things UK tech wants after Article 50 is triggered

"We’ve seen very strong fundraising from Currencycloud, Funding Circle and Atlas Genetics. Tech giants are also clearly confident in post-Brexit Britain with Apple and Snap having chosen London for their international headquarters," said Imbach.

The reports also noted increasing interest from US VCs looking for more bang for their buck.

"The foreign exchange rate post-Brexit encouraged an increase in US VC participation, and this trend has continued to grow," it said.

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