The amount of money pumped into Britain’s startups slipped in 2018, but fintech and blockchain investment provided a silver lining.
Funding into the UK’s young companies dropped from 2017’s record high of £8.6bn to £7bn last year, according to data published today by Beauhurst.
Deals at seed stage fell 15 per cent to almost the same level as 2014, despite equity crowdfunding, the most popular source of seed funding, reaching a record number of deals.
Fintech and blockchain both recorded all-time highs for the number of rounds achieved in 2018, with blockchain reporting a 75 per cent rise in deals from 2017, while adtech deals almost halved.
Funding for London startups also dropped slightly, but the capital remained on a high overall. London boroughs took eight out of the top 10 spots in the UK, with Westminster, Camden and the City landing in the top three.
Only 16 per cent of 2018’s deals went to female-founded companies, compared to 18 per cent two years earlier. However women experienced less of a decline in investment than men, with a 12 per cent drop year-on-year.
A $200m mega round from Bristol-based startup Graphcore led the artificial intelligence sector's 63 per cent funding boost in 2018, as the amount of money rose while the number of deals fell. Startups using AI in cyber security have raised £227m across 30 deals since 2011, making them the most significant player in the young ecosystem.
"The top-level view [of the data] is worrying at first," said Beauhurst chief executive and co-founder Toby Austin.
"However, this could be interpreted as a 'correction' from the dizzy heights of the previous year. Indeed, £7bn in equity investment is nothing to be sniffed at, particularly when considering that two years ago, the total figure was just £4.1bn."