VC firms invest $200m in UK tech start-ups after Brexit vote

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Global venture capital firms have made dozens of investments in Britain’s start-up technology companies in recent weeks, despite the UK voting to leave the EU, according to a new report out today.
Data collected this month by the investment database Pitchbook for London & Partners, the promotional body for the London Mayor’s office, shows UK tech companies have attracted $200m of funding across 42 deals since the EU referendum.

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However, the figures highlight a significant slowdown from the same period last year, when twice as many deals were completed with $338m of venture capital investment flowing into UK tech start-ups.
Darktrace, a UK cyber security firm, attracted the most money of any UK start-up in the month after the UK voted to leave the EU, raising $65m from investors including the US private equity firm KKR. The fundraising valued Darktrace at more than $400m.
The report, which focused on venture capital investments, rather than mergers and acquisitions, did not include last week’s announcement that Japan’s SoftBank had agreed to buy Britain’s biggest technology company, Arm Holdings, for £24.3bn.
“This is further proof that London leads the way when it comes to technology and, because of its diversity and entrepreneurial spirit, continues to attract investment from across the globe,” said London mayor Sadiq Khan. “This investment in the capital shows that London is open for business, open for new ideas and will continue to welcome the best talent from around the world.”
Eileen Burbidge, a partner at the venture capital firm Passion Capital, said London “remains the biggest tech centre in Europe and continues to attract the best talent and companies from all over the world”.
“These are attractive factors for any investor and there will be plenty of opportunities for investment in the coming months and years ahead,” Ms Burbidge added.
But Mr Khan and Ms Burbidge’s optimism stands in stark contrast to a recent survey of more than 1,200 people working in UK tech. It found that nearly three-quarters of industry leaders thought the business environment would get worse, not better, after the Brexit vote.
Tech City UK, the government-backed body that promotes the country’s tech sector, surveyed 1,205 people working in tech between June 27 and July 5, with nearly two-thirds of respondents either company founders or chief executives.
Just over one-third of respondents said it was “business as usual” after the Brexit vote, but nearly a quarter said they expected to scale back their planned growth ambitions as a result of the decision to leave the EU.
The UK tech community had been strongly in favour of remaining in the EU, according to polls conducted before the referendum, with several start-ups saying they would quit London if the UK voted to leave the bloc.
Many entrepreneurs and investors have said after the vote that they are concerned about attracting talent to London, where many software engineers are non-UK citizens.
Others have voiced concerns that raising money could also be affected by the fluctuations of the pound, which has plummeted since the Brexit vote, while financial technology firms in particular are concerned about accessing the single market after the UK leaves the EU.

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