Northern firms start 2021 with record £315m in venture capital investment

Investors based in the City of London are keen to do deals in the North of England

The money was raised across 37 deals in the region, representing nine per cent of all UK deals by volume during the quarter, and 10 per cent of all UK deals value, according to KPMG’s Global Venture Pulse Survey.

The most significant investments in Yorkshire in Q1 were Leeds-based C-Capture, which secured £11m from a group of investors, and Sheffield’s AMT PostPro.

Ben Taylor, head of technology M&A at KPMG in Yorkshire, said: “The North proved its resilience and the strength of its offering against the challenging backdrop of 2020. To see it attract record levels of investment in the first quarter of 2021 off the back of its performance then is credit to the character of businesses here and shows the raw ingredients are there for future success.

“While economic risks still exist, particularly with inflation being a real worry and the gradual withdrawal of government support measures, businesses in the North will be feeling confident of growth in the coming months. Those with strong management teams and well-scoped business plans in place will be best-positioned to attract the fundraising needed to drive growth going forward.”

The report found that more than £5.1bn was invested in UK scaleups in the first three months of 2021, up 21 per cent on the previous quarter.

The UK maintains its title as the jewel in the European crown, with seven out of the 10 largest deals in the region.

Interest and valuations for fintech businesses continued to accelerate in Q1, with £1.9bn raised in venture capital investment.

Three UK based fintechs raised large rounds, including LendInvest (£500m), Checkout.com (£325m), and Rapyd (£217m). With its £11bn valuation, Checkout.com became the most valuable fintech company in Europe in January before Klarna’s raise put it at a £22bn valuation.

Bina Mehta, chair of KPMG UK and head of the KPMG’s Emerging Giants practice, said: “The UK continues to be the powerhouse of Europe when it comes to attracting investment in fast growth innovative companies.

“While the number of deals taking place in the first quarter of the year was down by 23 per cent on Q4 ‘20, it was our ability to grow and nurture large innovative businesses that attracted VC investors from across the globe.”