This decline reflects the challenging environment for VC funding in the UK
The UK venture capital (VC) funding landscape has experienced a noticeable decline in deal activity during the first five months of 2023 compared to the same period in the previous year. According to data from GlobalData, a leading data and analytics company, the total volume of VC deals in the UK fell by 28.7 per cent, dropping from 819 deals in January-May 2022 to 584 deals in January-May 2023. The corresponding value of these deals also witnessed a significant decline, falling by 51.6 per cent from $US13 billion to $US6.3 billion during the same period.
Aurojyoti Bose, Lead Analyst at GlobalData, highlighted that this decline in deal activity reflects the challenging environment for VC funding in the UK, influenced by various factors including the ongoing Russia-Ukraine war, economic uncertainties, rising interest rates, inflation, and looming recession fears.
Despite the decline, an analysis of GlobalData’s Financial Deals Database reveals that the UK maintains its position as the top European market for VC funding activity. Furthermore, it continues to rank among the top five global markets for VC funding activity in terms of both deal volume and value.
During January to May 2023, the UK accounted for a 6.4 per cent share of the total number of VC funding deals announced worldwide, while its share in terms of corresponding funding value stood at 6 per cent.
Several notable VC funding deals were announced in the UK during this period. These included Abound’s successful fundraising of $US602 million, Buildier.ai’s $US250 million raise, eToro’s $US250 million worth of funding, Oxbotica securing $US140 million, and Raylo Group’s fundraising of $US136 million.
While the VC funding landscape in the UK has experienced a slowdown, the country’s position as a key player in the global VC market remains strong. As the economic and geopolitical landscape continues to evolve, industry observers will be closely monitoring the recovery and growth of the UK’s venture capital sector.
