"Funding Collapse sends investment in start-ups to six year low"
The Times today covering the shocking stats that VenturePath uncovered, with our partner Beauhurst. Great quotes from supporters Michael Moore CEO, BVCA and Julian David CEO, techUK.
* UK VC funding at Series A is -44% from last year, and worsening
* Q3 24 is down a staggering 57% from Q2, itself down from Q1
* 9 in 10 seed funded startups cannot access Series A VC funding, the next 'rung on the funding ladder'
* Just 32 future scaleup companies across the whole of the UK were able to access their first VC funding round in Q3...a 6 year low
* Half a billion less capital is going in to UK scaleups at Series A, than just 2 years ago!
As the UK scaleup funding gap widens, we are losing ground against other countries, at both startup stage (a position the UK worked hard to achieve, since 2011), and for scaleup support. OECD data: 13th in the world for scaleup support, and that's before Series A funding access dried up.
I get that its confusing. Another report (BBB, Nations & Regions) released this week spoke of positive trends in private investment, stating "The data for Q2 2024 shows that investment value has continued to grow".
Great, I love to see optimistic data. But under analysis that bundles venture with private equity (later stage), where a few megadeals skew the numbers. Otherwise the exact opposite is true.
Our independent research here, for the UK ScaleUp Investment Mission, is laser beam focussed on Series A. The funding round where companies move from the c.1m startups launched each year, through the 2,179 that access seed funding, into the rarefied category of being recognised as future scaleups, attracting Series A funding (£2-10m). The UK venture landscape is currently funding just 248 pa of these companies, and declining.
We've been sharing this urgent call for support with the new Government since the day after the election. I've personally met with several Ministers, and spoke to all the relevant Government departments.
I will shamelessly repeat loudly what is at stake.
UK scaleup funding at Series A has nearly halved in a year, and continues to decline steeply, more than halving in the last quarter. VenturePath developed The UK ScaleUp Investment Mission to convene the scaleup support ecosystem and £7bn of funders to help address this problem, to improve nationwide access to VC investment, and create more venture-backed successes. We have clear support, clear recommendations to reverse this decline in UK scaleup investment, and have made a clear ask of Government for participation in this, to ensure immediate action is taken to create the conditions for success for UK scaleups, ensuring the focus on growth isn't undermined by lack of capital, or equitable access to it.
Government decision makers, we'd love your interest, to progress to action.
HM Treasury: Rt Hon Rachel Reeves Spencer Livermore James Murray & CC Poppy Gustafsson (welcome to the debate).