Venture capital (VC)-backed companies in the UK raised more than US$1,007 billion across 90 deals in Q3 2015 – a year-on-year leap in value of 29%, but slightly down on the previous quarter - according to Venture Pulse, the quarterly global report on VC trends published jointly by KPMG Enterprise and CB Insights.
The figures mean the UK continues to account for approximately one-third of all venture capital activity in Europe, with key transactions during Q3 2015 including the $320m Series A investment in biotech firm Immunocore; the $70m Series C investment in food-delivery company Deliveroo; and $60m Series C investment in travel operator Secret Escapes.
Jonathan Boyers, partner, KPMG Enterprise, commented: “While internet and mobile technologies continue to dominate VC deals across the globe, here in the UK, healthcare is becoming the key industry to watch. With major advances in biotech, medical devices and medical IT, healthcare has become one of our strongest hotbeds of innovation. Couple this with our world class universities and research base, and it comes as no surprise that the sector is garnering significant investor attention.
“The $320m raised by Immunocore in July was the largest ever private fundraising by a European biotech company, and globally, the second largest biotech financing on record. While this has set the benchmark for now, I have no doubts that we will see further big ticket deals in the healthcare sector come down the line.”
Europe leads the way in seed funding
Europe saw a total of $3.5 billion in financing across 313 deals, compared to Q2’s $3.2bn across 309 deals. Among the major global markets, Europe had the highest share of deals at the seed stage – accounting for 40% of all deals – which should suggest a positive outlook for the future as these companies mature.
Tech continues to dominate the European VC investment landscape, with Internet and mobile deals accounting for 65% of all deals to European VC-backed companies in Q3 2015. However, Patrick Imbach, Head of KPMG’s High Growth Technology Group, points to another fast-growing sector that has caught the eye of investors. Patrick explains: “The size and scale of the UK and European Fintech market makes it another industry ripe for disruption. From payment processing, lending to insurance, we expect VC interest in these areas to only gain momentum over the next few quarters.”
Anand Sanwal, CEO of CB Insights, concluded: "Despite the chatter about an overheated market, the appetite for investment into fast-growing private start-up companies remains insatiable. Q3 2015 marks another dot com level high for funding and this has become the new normal, it seems. Investor FOMO – fear of missing out – continues to be a key driver of mega-financings and doesn’t look to abate any time soon."
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Katy Broomhead, Senior PR Manager, KPMG
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 Q2 2015 saw a total of 99 deals totalling $1,130 involving UK-based VC-backed businesses
 A unicorn refers to a start-up company with a private market valuation over $1 billion