Record £4.5bn quarter for UK tech investment

Posted on April 26, 2021 by Jonathan Symcox

Money growth

Credit: Micheile Henderson, Unsplash

The UK tech sector saw record investment in the first quarter of the year as economic recovery begins following a year of COVID-19. 

Data from Beauhurst, a database of UK’s high-growth companies, showed a record 465 deals in the sector, worth an unprecedented £4.45 billion. 

As the economy gets back on its feet and some semblance of certainty returns post-lockdown, the UK’s tech sectors are storming ahead. 

FinTech maintained its reign as the most investable startup sector, with 82 deals completed during Q1, totalling £1.89bn – more than double the previous quarterly record of £857m in Q1 2020.  

Investment in UK FinTech hits record levels

Four of the five biggest deals of the quarter were secured by FinTech companies, while around 36% of all pounds invested during the quarter went to FinTechs. 

However artificial intelligence saw the greatest growth in investment activity since Q4 2020, with a 32% rise to 70 deals in Q1, totalling £591m.  

The life sciences and digital security verticals also had healthy quarters, with 49 deals worth £798m, and 29 deals worth £202m, respectively. 

The overall investment scene in the UK also broke records, with an astonishing £5.18bn invested over the course of the quarter across 647 funding rounds secured by 641 companies. 

The previous quarterly records of £3.4bn, invested in Q4 2019, and 571 deals, announced in Q4 2020, were blown out of the water, with respective increases of 52% and 13%. 

Across the country, a number of regions saw record deal numbers in Q1 2021. London saw 313 deals, the South East 76, the North West 52, the East of England 46 and the South West 37.  

During the quarter, 48% of UK deals went to Londonbased companies, 25% to those in the South of England, and 14% to those in the North. Just 5% went to businesses in Scotland, 3% to those in Wales, and 1% to those in Northern Ireland.  

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For the first time in a single quarter, more than £1b was raised by UK companies with at least one female founder. For every pound invested, 22p was secured by female-founded businesses, compared to 13p in every pound invested in Q4 2020, and falling just short of the 23p record from Q3 2016. 

Four female-founded companies secured megadeals in Q1 2021: challenger bank Starling Bank (£272m), R&D intelligence platform Patsnap (£215m), immunotherapy company Vaccitech (£121m) and FinTech aggregator Curve (£70.2m).  

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