The UK British Business Bank has posted its Small Business Equity Tracker for 2024. The numbers aren’t so great compared to 2022, as investments in UK smaller firms tanked by 48% to £8.8 billion. The number of deals declined as well by 25% to 2152.
On a brighter note, the UK is now number three in the world for venture capital, following the US and then China. The UK pushed out India to capture the third spot. The report states that between 2021 and 2023, UK companies raised £72 billion in VC investment, behind the US and China.
Additionally, the UK’s global share of venture funding has moved higher when looking at 2014-2016 at 3.4% and 2021 to 2023 at 5.8%.
Regarding Fintech, the UK now attracts 11.3% of global Fintech investment.
Of course, the UK is a far smaller country by population when compared to the US, China, and India, so the country is punching above its weight.
Louis Taylor, CEO of the British Business Bank, says that in spite of the economic challenges, he is encouraged by indications that equity markets for smaller firms are stabilising.
Christine Hockley, Managing Director, Funds at British Patient Capital, echoed Taylor’s sentiment that the data shows that the UK venture capital industry is now beginning to stabilize.
“Over the last decade there has been strong performance and improvement in the funding of UK fintech and software. Now there is a real opportunity in the years ahead to also address other sectors where performance has lagged. British Patient Capital is a catalyst for investment and innovation in life sciences and Deeptech, where a lack of access to finance and long term patient capital continues to hold back some companies from scaling up. By committing capital to fund managers who specialise across sectors including life sciences and Deeptech through our core programme as well as investing in companies like Manchester-based medical device company Phagenesis through our £425m Future Fund: Breakthrough programme, we are backing innovative British start-ups that will be the global leaders of tomorrow.”
Hockley believes there is opportunity for startup clusers around UK Universities.
“Today only 9% of deals in the UK back university spinouts. At British Patient Capital, university spinouts account for 16% of the deals we have supported. We understand there is huge potential in the future for this to increase as more investors support the commercialisation of academic research and innovation.”
