UK Venture Capital Funding: Q2 2023 Highlights:
PitchBuilder Market Update (Q2 2023):
We're halfway through 2023 and our team has compiled everything you need to know about the start-up fundraising environment in the UK, right now:
What happened over the last 3 months?
- UK VC investment fell to £1.7 billion ($2.0 billion) in Q2 2023, marking a 40% decline from Q1 2023. Deal volume decreased as well, with 327 deals in Q2, down from 402 deals in Q1.
- Major deals included a £500 million ($622.9 million) investment in Abound, and £250 million ($312.5 million) and £100 million ($125 million) investments in eToro and Deel respectively.
- Fintech, software, and healthcare emerged as the sectors attracting the most investment, with £500 million ($622.9 million), £350 million ($425 million), and £250 million ($312.5 million) respectively.
- Top VC firms in Q2 included Atomico, Index Ventures, Accel, Balderton Capital, and General Catalyst.
- Despite the overall decline, the market still witnessed significant deals and fintech continues to be an attractive sector.
How does Q2 compare to Q1 2023?
| Q1 2023: | Q2 2023: | |
| Total VC Investment: | £2.9 billion | £1.7 billion |
| Deal Volume: | 402 deals | 327 deals |
| Largest Deal: |
£1.2 billion ($1.5 billion) in Revolut |
£500 million ($622.9 million) in Abound |
| Top Sectors: |
Fintech (£1.4 billion) Software (£700 million) Ecommerce (£350 million) |
Fintech (£500 million) Software (£350 million) Healthcare (£250 million) |
Our Conclusions:
While Q2 2023 saw a downturn in VC investment in the UK, fintech remains a strong draw for investors. Despite economic challenges, including the global slowdown, Ukraine conflict, rising inflation, and ongoing Brexit uncertainty, the UK's solid history of successful startups and the availability of capital for investment present reasons for future optimism. Government support for the tech sector could also fuel resurgence.
Sources:
- KPMG Venture Pulse Report
- GlobalData
- Beauhurst
- PitchBook
- Preqin
- VentureSource
- Crunchbase
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