New research says that ‘South West is stepping out from London’s shadow’ for investors

Financial Services | Funding | South West
Kay Drury

Research into venture capital investment throughout 2018 shows that the South West is stepping out from under London’s shadow when it comes to the eye of the investor, according to KPMG’s Venture Pulse survey.

It revealed that last year, a significant injection of £364 million went into new businesses in the South West across 21 different organisations.

The majority of the funds, £307 million, went to businesses in Bristol, with most going towards tech companies – $200 million went to Graphcore, £35 million to Ultrahaptics while $40 million went to KETS Quantam Security Ltd.

Kay Drury, a Partner at KPMG Bristol said that the size of the investments indicated that Bristol was becoming a hub of scale-up businesses largely due to its burgeoning tech industry: “Over the past decade, Bristol has established itself as an engine of start-up creativity. We can now see that the start-ups have moved onto the next level, having proved their product to the market as well as their financial model.”

“Investors who traditionally focus on London are now well aware of the South West and this is helping local businesses to secure the attention and investment they need to grow.”

From a UK wide perspective, KPMG’s Venture Pulse survey showed that despite ongoing uncertainty around Brexit, the UK continued to attract significant levels of venture capital.

Against a total investment in Europe of $24.4 billion in 2018, $7.7 billion went to the UK. An amount 1.5 times the level invested in fast growth businesses in Germany, and 2.6 times the level of investment seen by the start-up ecosystem in France.

Commenting on the findings Patrick Imbach, Head of KPMG’s innovative startup practice comments: “For years now, the true implications of Brexit have remained open questions however, the venture ecosystem would appear to have been unaffected so far. Global VC investors continue to be attracted to good quality UK businesses, and are particularly focused on larger and later stage deals.

“Like the rest of Europe, the UK has seen a decline in the number of completed financings towards the end of 2018, indicating that as the deadline approaches, investors are starting to grow more cautious, waiting to see whether a plan materialises.

“Concern around competing for talent will dominate conversations being had by entrepreneurs across the UK and could impact the growth of innovation and our start-up sector as we face what is likely to be a challenging year ahead.”

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