Venture capital cash falls in the north

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A total of £226.5m of venture capital was invested into Northern businesses during 2018, a 30 per cent fall from the previous year, new data shows.

The latest Venture Pulse report published by KPMG identified the figure which was spread across 100 deals, represetning a 30 per cent year-on-year drop from £327.33m in 2017.

In total £7,7m was invested across the year in the UK by global and domestic VCs, a four per cent fall in comparison to the previous year.

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 per cent drop compared to the UK average of 25 per cent.

The overall reduction in northern investment was felt most keenly in Yorkshire where VC interest fell by 69 per cent to £40.4m.

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.”