Venture capital investment plummets in North - KPMG report

Simon Austin's picture
by Simon Austin

Venture capital funding fell by 69% in Yorkshire and by 30% in the North West in 2018, according to the Venture Pulse report by KPMG.

Businesses in the North West received VC investment worth £122.2m, down from £173.4m in 2017 - the same 30% drop as for the North as a whole.

The worst performing region was Yorkshire, where VC investment plummeted 69% to £40.4m. In contrast, North East businesses saw a 151% rise from £25.5m to £64m. There was a 4% fall across the UK from just over £8bn to £7.8bn.

Northern businesses received £226.55m in venture capital investment in 2018 across 100 deals, according to the report, down from £327.33m in 2017.

Despite the total value of investment falling at a significantly higher rate than the UK average, the North performed better in terms of maintaining deal quantity – a 14% drop compared to the UK average of 25%.

Graham Pearce, KPMG’s head of technology in the North, said: “The North remains a fertile and active market for venture capital but investors appear to be keeping their powder dry as they wait for trading conditions to become clearer, particularly given the risks when working with early stage businesses.

“Our report indicates that there is still a healthy appetite from seed through to later stage investment, particularly with IT and healthcare businesses, as northern research hubs continue to perform highly.

“As such, the region should strengthen its resolve to prosper in 2019 even if investors remain shy in the first half of the year.”

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