UK Venture Capital Activity Hits New Low in August, Report Reveals

The UK happens to be the “top” European market and is also one of the key global markets for venture capital (VC) funding, according to an update from GlobalData.

However, it has been “experiencing a subdued funding activity in the recent months with monthly VC funding volume and value for 2022 falling to new lows in August,” reveals GlobalData, a data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that “the total VC funding raised by the UK-based startups fell below $1 billion in August.” It was also “the first month in 2022 that failed to register a triple-digit deal volume.”

The VC funding value “nosedived by 57.6% to $708.3 million in August, while the VC funding deal volume fell by 21.9% to 89 compared to the previous month.”

Aurojyoti Bose, Lead Analyst at GlobalData, comments:

“The month-on-month VC funding trend remained inconsistent in 2022 with some of the months witnessing growth in deal volume and value followed by consecutive months of decline. In fact, August marks the second consecutive month of decline in VC funding activity for the UK.”

August also “saw the announcement of only one deal valued more than or equal to $100 million compared to announcement of four such deals in this value range during the previous month.”

Meanwhile, the cumulative VC funding deal volume “announced during January to August 2022 in the UK was 1,174, whereas the corresponding disclosed funding value stood at $18.7 billion.”

Bose concludes:

“High inflation, changing political scenarios and geopolitical tensions seem to have made investors adopt a cautious approach. Resultantly, we are seeing a drop in the VC funding activity.”

In another update from GlobalData, it was noted that the US, which continues to lead the global venture capital (VC) funding market, has been “experiencing weak investment activity for some months amid the volatile market conditions.”

The data and analytics company also notes that monthly VC fundraising for the US “was at its lowest level in August 2022.” This was the first month this year “when the total VC funding raised by US-based startups fell below $10 billion.”

An analysis of GlobalData’s Financial Deals Database reveals that VC funding value “fell by 29.3% to $9 billion in August with deal volume also falling by 3.3% compared to the previous month.”

Meanwhile, the cumulative VC funding deal volume announced during January to August 2022 “was 7,277 with the corresponding disclosed funding value standing at $146.3 billion.”

Aurojyoti Bose, Lead Analyst at GlobalData, comments:

“Volatile market conditions amid unfavorable macroeconomic scenarios seem to be taking a toll on the investor sentiments with August marking the fifth consecutive month of decline in total VC fundraising by US-based startups.”

In fact, the US is “yet to see a billion-dollar VC funding deal announcement in 2022.”

Meanwhile, the number of deals “valued more than or equal to $100 million also fell from 29 in July 2022 to 16 in August.”

Bose adds:

“The lack of any billion-dollar VC funding deal announcement so far this year and the decline in number of deals valued more than or equal to $100 million is also a testimony of the dent in investors’ appetites for big-ticket deals.”

As covered, 4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, claim to “make timelier and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform.”

GlobalData’s mission is “to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.”

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