AI is driving a VC investment boom
The UK has landed some of the biggest megadeals in history, but it must double down on tech investment to keep its crown, says Nicole Lowe
The UK is currently riding on the crest of a wave of near-record-breaking levels of venture capital investment and I’m delighted that it shows no sign of coming to an end.
We are the shining star when it comes to investors from across the globe, even landing some of the biggest single megadeals in history.
This year has already seen billions of pounds poured into the country, making it by far the best-performing market in Europe and leading the way for those looking to make larger bets on smaller start-ups.
Success must not breed complacency
However, we have to do everything we can to guarantee that this success doesn’t transition into complacency. It’s crucial we remain at the forefront of innovation, especially in tech, allowing businesses of all shapes and sizes to reap the benefits and welcome the potential wave of future investment.
One of the key elements of this ongoing success has been and will continue to be AI, which is something that I don’t expect to see changing anytime soon.
We’re now seeing really strong AI native businesses, you could say the crème de la crème, shining through in the space.
Our data shows us that AI start-ups are driving this boom in the UK, a pattern that we think is here to stay and has also been reflected in KPMG’s most recent Tech Innovator in the UK competition. Applications were dominated by AI companies with the eventual winner being Scottish-based Zelim, which uses AI to save lives when people fall overboard at sea.
Looking ahead, we anticipate that the entire UK will remain attractive not only as a home for exciting, innovative firms such as Zelim but also for those looking to invest in similar opportunities.
This is why it is no surprise that this year has seen a boom in venture capital investment, reaching levels rarely seen before in this country, helping maintain our position as number one in Europe and set strong foundations for the rest of the year.
Recently, AI firm Nscale raised £1.48bn with another £1.1bn for autonomous driving firm Wayve. These are known as megadeals, a phenomenon that is on the rise in the UK and one that shows no signs of going away anytime soon.
Deals like these are perfect examples of us as a nation continuing to punch above our weight when it comes to attracting investors despite the uncertainty we are seeing at home and across the globe.
Now, as we bid to remain an exciting option as a country, we need to back the very best ideas all while acknowledging ongoing talent challenges being faced and tackling them head on.
If we succeed in this, innovators will break through, succeed and help the UK to cement its place as the best destination for global investment for many years to come.
Nicole Lowe is KPMG’s UK head of emerging giants